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``Auto executives are way underpaid`` says GM vice chairman

17th of February 2010

In a statement that might cause rage amongst the American tax payers, Bob Lutz, Vice Chairman of General Motors, claims that the auto executives are ``way, way, way underpaid``. He is talking about the exact auto executives that have a six or even seven figure salary yearly to run a company that went bankrupt and had to be bailed out by the government.

At the NADA (National Automobile Dealers Association) annual convention, Bob Lutz of General Motors stated ``What you see is what you get, and it ain`t a lot``. He continued by saying that ``All I know is, right now, we are given our responsibility. And given the rigors of the job and demands and the accountability, I would say we are being paid way, way, way below market``.

This statement came in a time when the Treasury Department of the United States is reviewing the pay packages of the top 25 senior executives` at General Motors. Ken Feinberg, the man appointed by the U.S. Treasury Department to oversee the compensation of top executives at companies which have received federal bailout assistance, said last autumn that the salaries for GM`s top 25 executives would be diminished by 31%, while total compensation will drop 20.4%. Thus, only one executive will earn more than 500.000 U.S. dollars, excepting the CEO.

The vice chairman of General Motors also stated that ``Right Now, there is not a problem, but over time, clearly a company that under compensates senior executives is going to have a retention or recruiting problem``. He finished by saying that ``You can not go through Chapter 11 and come out the other side and expect to have all of the same perks and comps as you did before. We just hope it does not stay this way too long``.

If you look at things this way, Bob Lutz of General Motors does have a point here. The drop in payments may have a negative affect on the ability to recruit talented executives of General Motors. Still, you can not leave aside the fact that, as a company, General Motors is performing way under the expectations.