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Ex-GM CEO Gets Millions Post-Bailout

Posted: Jul 15, 2009 11:00 a.m.

We should all hope to be fired by Barack Obama.

The President insisted that former General Motors CEO Rick Wagoner step aside as a condition of bailing out the troubled company in March, but apparently, Wagoner made out fairly well in the deal.  The AP reports, "Wagoner will retire Aug. 1 with a pension and benefit package the automaker valued at more than $10 million."  The package includes "$1.64 million in benefits annually for each of the next five years, plus an annual pension of $74,030 for the rest of his life, according to company documents filed Tuesday with the U.S. Securities and Exchange Commission."

The Los Angeles Times comments, "It's good unemployment, if you can get it."  In addition to the severance payments, "The automaker will still cover him under a liability insurance policy, and he'll receive a life insurance policy currently valued at $2.6 million."  The total value of the pay and benefits, however, is "significantly lower than what he would have received had he retired prior to the bailout."

The Detroit News notes, "Wagoner, a 32-year veteran of GM, had a pension with total retirement benefits of about $20 million, according to a March regulatory filing. In all, Wagoner will take a more than 60 percent cut to the current value of his retirement benefits."  That cut is similar to what other retired GM executives have seen.  "GM pension recipients who receive a total yearly payment of $100,000 or less will lose 10 percent of their payout. But former executives who collect a higher pension are seeing pension payouts reduced by two-thirds."

But the figure is certain to reignite questions over executive pay.  After all, the Times notes, "He left a company with an essentially hopeless balance sheet, one that ultimately gave it no choice to but file for Chapter 11 bankruptcy protection, which it did in June."

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