Canadians Demand GM and Chrysler Disclose BOD Members’ Pay and Perks
Her neighbors to the south may not recognize the fact (even
parenthetically), but Canada kicked-in as-yet-uncounted billions in
federal funds to keep the Chrysler and GM zombies in a vertical
position. Whatever the final tally, the Motown subsidy was the largest
bailout in Canadian history. In exchange, they received a seat on both
automakers’ Board of Directors. Ottawa and Toronto chose Carol
Stephenson, dean of the Richard Ivey School of Business at the
University of Western Ontario, to bop on down to RenCen to see what’s
shaking. Auburn Hills hosts George Gosbee, of Tristone Capital. OK, so
how much are they getting paid for their time? They ain’t saying,
exactly. And Canadians are not happy. Specifically, the Edmonton Journal:
“Chrysler and GM refuse to disclose their compensation–along with
all other board members–is an outrage and insult to citizens on both
sides of the border.
To be precise, GM admits with comical simplicity only that board
members are paid a “minimum of $200,000? a year plus a “free car,” which
we assume is not a loaded Aveo. Chrysler, incredibly, still declines to
reveal any financial information about board remuneration, citing
It gets worse.
While [Canada's GM rep Carol] Stephenson –– who sits on a number of
other government and corporate boards and will retain her post as dean
–– will receive a base cash payment of $200,000 and a company vehicle,
Chrysler has refused to reveal compensation for its board of directors.
As well, both companies refused news media requests to release details
of salaries for its Canadian CEOs.
Once upon a time, GM CEO Fritz Henderson swore under oath that the New
GM would be transparent in all its dealings. While Fiat’s Sergio
Machionne made no such pledge re: New Chrysler, is it too much to ask
that these taxpayer-supported not-to-say-nationalized automakers open
their books to the people who made it possible for them to have books
which they can open? Apparently so.
Which raises the inevitable question: what else are they hiding?
Force GM, Chrysler to disclose salaries, governments urged
By Grace Macaluso and Anne Jarvis, The Windsor StarJuly 29, 2009
As criticism mounted over the level of compensation for members of the
board of directors at General Motors, pressure grew Wednesday on the
federal and Ontario governments to compel GM and Chrysler Group LLC to
publicly disclose salaries of the automakers’ top brass.
“I think taxpayers have a legitimate reason to ask to see how their
money is being spent,” said Joseph D’Cruz, professor at the University
of Toronto’s Rotman School of Management.
“And the question, all of us as taxpayers are asking –– ‘is our money
being well spent or is it being diverted into excessive compensation for
a few people?’”
Federal and Ontario taxpayers have given Chrysler and GM more than $14
billion to help the ailing companies return to financial health.
American taxpayers, meanwhile, have invested about $80 billion to the
automakers and GMAC Financial Services. As a result, U.S. and Canadian
governments own 72 per cent of Detroit-based GM and 10 per cent of
Auburn Hills-based Chrysler. Ottawa and Ontario have one representative
on the companies’ board of directors –– Carole Stephenson, dean of the
Ivey School of Business at the University of Western Ontario sits on the
GM board, while Calgary businessman George Gosbee is a member of the
While Stephenson –– who sits on a number of other government and
corporate boards and will retain her post as dean –– will receive a base
cash payment of $200,000 and a company vehicle, Chrysler has refused to
reveal compensation for its board of directors. As well, both companies
refused news media requests to release details of salaries for its
GM Canada spokesman Stew Low said “executives, including CEO Arturo
Elias have no golden parachutes, have not had bonuses in 2008 or 2009 or
a raise, have had their pay cut 10 per cent, have had their pension plan
and other benefits cut ... Arturo almost always drives himself –– no
chauffeur –– flies economy or drives to meetings or uses teleconference.”
Chrysler Canada spokeswoman Mary Gauthier said information on CEO
salaries and board compensation was “proprietary.”
“I don’t think it’s reasonable at all,” said D’Cruz. “Basically, once
you’ve accepted very significant amounts of public money as a
corporation you have to operate with a level of accountability and
transparency that is normally expected by publicly funded corporations,
such as universities, hospitals and the government. This company is now
significantly owned by the governments and it can no longer behave as if
it were a private company. I think the provincial and federal
governments should move to require these companies to publish both the
directors’ salaries as well as their senior executives because, in the
public interest, the question is ‘are they being compensated at an
unreasonably high level compared to industry standard.’”
Kevin Gaudet, federal director of the Canadian Taxpayers Federation,
accused the automakers of “taking Canadian taxpayers for a ride.” “GM
and Chrysler have received the single largest corporate bailout in the
history of Canada –– not just by a little, but by a U.S. mile,” said
Gaudet. “Taxpayers expect the firms to jealously guard their money, to
spend it carefully, to invest it wisely and to report on it more fully.
Only with full transparency will this be guaranteed.”
Gaudet, who has an MBA from the Ivey School of Business, also expressed
dismay at Stephenson’s salary, saying it is “ridiculous to compensate a
government representative so generously for what he called a very
Her level of cash compensation was “out of line” with that of other
major corporations, including Ford Motor Co., –– the sole Detroit Three
automaker that has avoided a taxpayer bailout, he added.
In the wake of the global economic crisis, members of Ford’s board of
directors voted in March to give up the 40 per cent cash portion of
their $100,000 in base compensation, said company spokeswoman Marcy
Evans. “The changes the board made were to decrease costs and conserve
cash in response to the difficult global economic climate,” said Evans.
Calls to Sandra Pupatello, Ontario’s minister of economic development
and trade, were not returned Wednesday, while a spokesman for federal
Industry Minister Tony Clement, said Clement would comment today.
Meanwhile, GM spokesman Tom Wilkinson defended Stephenson’s
compensation. “Board members have extensive experience turning around
industries and working with government. Those skills will be very
important in making GM competitive again; they will have a lot of work
and a lot of decisions (to make),” said Wilkinson. “You wouldn’t want to
be cutting corners on the GM board. These are extremely important jobs.
We want the best board we can get.”
Wilkinson also noted that from Jan. 1 until the new board starts next
week, non-employee members of the board of directors received $1 a year
as part of the government loan guarantee.
Ken Lewenza, whose $145,000 annual salary as president of the Canadian
Auto Workers Union is public information, said he was “infuriated” over
the refusal to disclose salaries.
“The federal and Ontario governments have an appointed member on the
boards of directors, and the boards could easily provide the public with
those kinds of answers,” said Lewenza. “In fact, I believe as part of
the terms and conditions of the loans, that full disclosure is
important. That’s what they asked of us. We gave it to them, so it works