Chrysler executive bonuses

[1TONY1]

I'm sure these guys deserve these million plus bonuses.....bull**** !! The decision was made Feb 2007 .... still


As Detroit's crumbling auto industry asks Congress for a bailout, Chrysler is in the awkward position of paying about $30 million in retention bonuses to keep top executives while the company cuts thousands of jobs.

Chrysler leaders get millions | Freep.com | Detroit Free Press

 

[Mopar488]

That is the very reason this country is in the shape it is in. They are trying to justify the bonuses to retain the talent until the new buyer is found. It does not make sense for the companies to be crying for bailouts, cutting jobs, and then paying bonuses. Iacocca took $1 in salary when he was building Chrysler back up. I guess people have different priorities now. What a shame.

 

[GTSnake]

This is one of those incidences where the domestic OE's can learn a few things from the Asian OE's. Do the CEO's of Toyota, Honda, Nissan make as much as their US counterparts?

In the US, it's what the market can bear. So over the years executive compensation has just gotten way out of hand.

 

[GR8_ASP]

Not that I agree with the bonuses but it should be noted that they were initiated by Daimler after the news that they were selling Chrysler and felt that senior management would bolt as quickly as possible with an imminent sale. They required a 2 year stay in order to collect the final 75% as well. They were not by Chrysler or Cerberus. So if you want to place blame at least point it to the correct entity and country.

If you want to bash at least learn enough to bash correctly.

 

[Bobpantax]

I do not have any problem with the concept of retention bonuses as long as they are also conditioned on some objective measure of financial performance.

As for these:

Those promised the largest retention bonuses:
• Frank Ewasyshyn, executive vice president, manufacturing, $1.89 million.
• Frank Klegon, executive vice president, product development, $1.8 million.
• Rae, $1.66 million.
• Simon Boag, president, Mopar/global service and parts, $1.65 million.
• Steven Landry, executive vice president, North American sales, $1.63 million.
• Michael Manley, executive vice president, international sales, marketing and business development, $1.53 million.

In view of the state of the industry and other industries, where would they go if they quit? I think that the government should ask them, and others, who are contractually entitled to the bonuses, to voluntarily either reduce and/or defer part or all of the bonus as a condition of any government assistance. From what the article says, if Chrysler went into bankruptcy, they might not get paid anyway.

I also think that part of the money they give up should go to the SRT Engineering team. They deserve it for their Ring accomplishment. I know. I am dreaming. But SRT, from my point of view, is the one bright star in the whole operation. They have accomplished great things with minimal investment.

 

[Sellshomesdrivesviper]

These bonuses are small and insignificant and have nothing to do with the current times or the present company. The retention bonuses were in place for obvious reasons when it was previous sold.

Now it would be real nice to see the current bonuses, but since it's a private company, they don't have to show the public, unless they want "our" gov't money and they sure do.
Stay tuned, as congress loves to find out want everyone makes in all these public, televised hearings.

 

[Bobpantax]

These bonuses are small and insignificant and have nothing to do with the current times or the present company. The retention bonuses were in place for obvious reasons when it was previous sold.

Now it would be real nice to see the current bonuses, but since it's a private company, they don't have to show the public, unless they want "our" gov't money and they sure do.
Stay tuned, as congress loves to find out want everyone makes in all these public, televised hearings.

They are small in the context of the overall dollars but symbolically huge from a political point of view. I expect Congress to ask that those who are entitled to receive the retention bonuses agree to at least defer same as a condition of financial assistance. I am going to see if I can find the terms of the last Chrysler bailout on line to see what they did then. If I do, i will post same.

 

[1TONY1]

Not that I agree with the bonuses but it should be noted that they were initiated by Daimler after the news that they were selling Chrysler and felt that senior management would bolt as quickly as possible with an imminent sale. They required a 2 year stay in order to collect the final 75% as well. They were not by Chrysler or Cerberus. So if you want to place blame at least point it to the correct entity and country.

If you want to bash at least learn enough to bash correctly.

I posted it was originated Feb. 2007. I assumed everyone could figure out from the article the whys....hell, even you figured it out Cerberus is probably as guilty as Dailmler IMO and Chrysler "is" whomever currently owns the company at any given time. You don't think Cerberus knew about them ? Maybe even prompted the contract ? Who is paying out the cash....is it Daimler ?????

My take on it more so than just bonuses in todays market is that NO ONE deserves that high of a bonus...same applies to say...college football coaches that get canned. The people going into these contracts are the ones that should be shot. Of course the correct term for a coach is "buy-out"

 

[Steve 00RT/10]

These bonuses are small and insignificant and have nothing to do with the current times or the present company. The retention bonuses were in place for obvious reasons when it was previous sold.

Now it would be real nice to see the current bonuses, but since it's a private company, they don't have to show the public, unless they want "our" gov't money and they sure do.
Stay tuned, as congress loves to find out want everyone makes in all these public, televised hearings.

One needs to put even these 'small' bonuses in context. The piddliest (sp) bonus listed above by Bob...$1.53M......is more than a majority of Americans earn over their ENTIRE working life. To ask these same Americans to pay this slush money with their tax dollars (Monopoly money for now) for failure is disgusting and wrong. All the execs in line for this are far from paupers. They should accept not a dime.

Steve

 

[Chuck 98 RT/10]

They are small in the context of the overall dollars but symbolically huge from a political point of view.

100% agree.

And those "small bonuses" would be more than enough to "bailout" thousands of small businesses going under every day. Unfortunately small businesses aren't gonna see a dime of all that bailout money. It is criminal what the government and big business is doing to the rest of us right now. And I say that as a Republican, conservative and capitalist.

 

[Chuck 98 RT/10]

My take on it more so than just bonuses in todays market is that NO ONE deserves that high of a bonus...same applies to say...college football coaches that get canned. The people going into these contracts are the ones that should be shot. Of course the correct term for a coach is "buy-out"

[sarcasm alert]

Woah there Tony. Don't go poking at football or our education system. No expense too great for the children y'know. Besides, college football pays for itself.

/sarc

 

[GR8_ASP]

DAIMLER initiated the retention bonuses WHEN placing Chrysler up for sale.

"You don't think Cerberus knew about them ? Maybe even prompted the contract?"
How the hell would Cerberus be involved before they even knew it was for sale?

"My take on it more so than just bonuses in todays market is that NO ONE deserves that high of a bonus"
You yourself said that you knew this took place in Feb of 2007. Why would you place the decision into todays time frame?

How do you know how things are or were paid. Do you know if that was included in the purchase agreement, making it Daimler's actual payment. NO! But you have to blast companies and countries just because you assume something. Sorry but your assumptions have no basis in fact.

The facts are that sale of a company with an ongoing exodus of the management team would decrease the value of the sale immensely. That is why Daimler paid the retention bonuses. If the top management had left, and note many a layer or two down did leave as the job market in 2007 was good, what would have been the loss to Daimler? More than 30M you bet.

If you want to go fight excessive pay go fight those at the top of the list. Oprah and the legions of athletes, entertainers and CEO's of financial companies. No automotive CEO in history has come close to their annual salaries ever. Even Bob Eaton (the ##@@$$#*^%$#) received at maximum 1/4 of Oprah's annual salary and was not able to cash in when it held that value as it had a minimum retention period for the stock payment. And "buy-out" is for someone who has a contract and the contract provider opts to buy them out, presumably for less than the value of the contract. Want to eliminate them then get contracts eliminated or get the contract values reduced. The contract holder is just trying to maximize their return, and usually done through a interested third party.

 

[Canyon707]

I consider it internal terrorism.

 

[GR8_ASP]

Is Germany "internal?" That be where the decisions AND money flowed from.

 

[Bobpantax]

From another source:

The Chrysler Corporation Loan Guarantee Act of 1979 was signed into
law January 7, 1980, and established a loan guarantee board with the
authority to issue up to $1.5 billion in government loan guarantees for
the Chrysler Corp., a failing company, over the next three years. This
assured private creditors that the government would assume the losses if
Chrysler failed. The loans were to be repaid by the end of 1990(CQ
Almanac 1979).
A number of strings were attached to the bill. To receive the loan
guarantees, Chrysler was required to:
· "Win concessions from the companys workers, plus $500 million in new
credit from U.S. banks; $125 million in new loans from foreign banks and
other creditors; $250 million in aid from state and local governments;
$180 million in aid or credit from dealers and suppliers.
· Sell off $350 million of company assets or other equity.
· Develop an energy-saving plan.
· Issue $162.5 million of new common stock to its employees.
· Make another $100 million of new common stock available for sale to its
employees. Any worker purchase of such stock would count against the
required wage concessions." (CQ Almanac 1979, P. 292).

 

[GR8_ASP]

Bob, enough with the internet searches. Some of us received the reduced wages in the period and received the ESOP payment as a result. My mortgage at the time was 50% of my gross income and it was only a 57k house! Workers could not profit from the stock purchase plan. Only higher management could. As the wages in the period were about 2/3's of the market wage the ESOP payment did not cover even 1 years worth of lost wages. But it was directionally correct.

My Chief Engineer at the time purchased 200k worth of Chrysler stock and retired in the mid 1980's a wealthy man. This seems to be in contrast to your comments against executive compensation, though at least these were with associated risks.

 

[Bobpantax]

Regardless of what my own views might be, I think that Congress probably already has dusted off the 1979 Chrysler bailout model; is in the process of tweaking it; and, will use it again. Because of the public perception and the consequent political implications, I will be very surprised if Congress does not require that any unpaid bonuses, regardless of who did what, when, be voluntarily deferred, reduced and/or eliminated as a condition of the financial assistance.

 

[Chuck 98 RT/10]

No automotive CEO in history has come close to their annual salaries ever.

Salary no, but add 10M - 30M in annual bonuses and they are right up there with the Oprah's, athletes and Hollywood.

 

[GR8_ASP]

You know they have been available in every annual report (except this year for Chrysler). So why not checks FACTS first before stating numbers. Your guesses are at least an order of magnitude off.

And for Oprah, her annual compensation is more than the senior management teams of all of the US automakers combined compensation. What was it something like 240M last year that Oprah made for a talk show!

 

[PatentLaw]

Chrysler is obviously better off then GM. I say the executives have earned their cut for the time being. As said before, these deals were cut wayyyyyy before the crisis. If everyone is for "freedom of contract" and "let the marketplace decide" and "Let GM fail", then why not be consistent and honor the commitments to these individuals? That is what the marketplace decided last year.

 

[Chuck 98 RT/10]

You know they have been available in every annual report (except this year for Chrysler). So why not checks FACTS first before stating numbers. Your guesses are at least an order of magnitude off.

And for Oprah, her annual compensation is more than the senior management teams of all of the US automakers combined compensation. What was it something like 240M last year that Oprah made for a talk show!

GM's Rick Wagoner made 14M in 2007. Ford's Alan Mulally got 28M for four months work in 2006. That's what they got from their companies, I don't know how much they made from personal investments. And while their company salaries and bonuses don't match Oprah it certainly puts them in the elite club with "legions of athletes and entertainers." But really, to argue the difference between these mega millionaires is kinda silly. I'm no fan of Oprah and gang either.

 

[DFW GTS]

And for Oprah, her annual compensation is more than the senior management teams of all of the US automakers combined compensation. What was it something like 240M last year that Oprah made for a talk show!

And how much revenue did Oprah generate for that talk show? If she had been replaced how much would the drop in revunue have been for that talk show? Since you are making the comparison, if the senior management of all of the US automakers had been replaced, how much do you suppose their revenue would have dropped?

I'm not at all a fan of Oprah but when debating a person's salary you have to consider that person's relative value to the company for which they work.

 

[Nine Ball]

Bonuses should only be paid as rewards for success, period. I'm in the oil/gas industry and our bonuses are calculated at the END of each year, and are dependent on group initiatives, company goals being reached, and individual goals being reached.

Hard to say anything related to the auto industry has been a success in 2008.

 

[GTSnake]

Ok, you guys in the oil business should not be talking...... You guys have made enough money for all of us combined.

But yes, I agree that bonuses should be merit based. Not entitled.

 

[Bobpantax]

Did anyopne read Romney's OpEd piece? He said that the government should let them file Chapter 11 proceedings and explained why.