Ex-GM CEO Rick Wagoner Gets $8.2m Pay-Off
Back when TTAC was a voice in the wilderness on GM’s C11, I asked Bob
Lutz if his pension was bankruptcy-proof. Maximum Bob scoffed and joked
that he’d check with his accountant. Well, I guess he didn’t; the Car
Czar recently revealed that hard times had forced him to sell one of his
personal jets. After losing his shirt on GM stock options. The fact that
MB’s working for New GM also indicates that he forgot to get while the
getting was good. He should have had a word with his boss, Rick Wagoner.
The ex-GM CEO, the man who wiped billions from the company’s worth and
faceplanted the American automaker, made sure his financial future
didn’t depend on anything as trivial as success.
Sure, Wagoner was due to collect $22.1 million for time served. But even
though his contract was with Old GM, Red Ink Rick’s riches were
[somehow] assigned to New GM. Which means Wagoner’s getting an $8.2
million dollar thank you. Oh and a $74,030 annual pension. Oh and a
chance to cash-in his $2.57 million life insurance policy. And
unspecified perks (cars for life, travel, etc.). Bodyguards? The Detroit
News tells us “General Motors Co. officials declined comment.”
The Detroit News »
Wagoner to collect $8.2 million retirement package from GM
Robert Snell / The Detroit News
The old General Motors Corp. has reached a retirement agreement with
former chairman and CEO Rick Wagoner that will pay the ousted leader
almost $8.2 million plus a $74,030 annual pension.
The payout package was outlined in a regulatory filing late Tuesday
afternoon with the U.S. Securities and Exchange Commission.
That's far less than what Wagoner was originally due before GM last
month outlined drastic cuts in pensions for some former high-level
executive retirees. GM disclosed the cuts during a conference call to
retirees last month.
GM white-collar pension recipients who receive a total yearly payment of
$100,000 or less will lose 10 percent of their annual payout. But former
executives who collect a higher annual pension will see distributions
reduced by two-thirds.
Wagoner, a 32-year veteran of GM, had a pension with total accrued
benefits of $22.1 million as of Dec. 31. The retirement package was to
be paid in five annual pension payments of $4,523,400, with the first
monthly installment due upon his retirement.
Under an arrangement reached between Wagoner, 56, and the old GM, he
will get $1,636,105 for five years and $74,030 a year for the rest of
Wagoner, who was fired in late March by President Barack Obama, remains
on the payroll at a $1 a year and will officially retire Aug. 1.
He also will receive personal umbrella liability insurance coverage
until Jan. 1, 2010 -- which is consistent with what other executives are
receiving from the old GM. He also will get an existing life insurance
policy or its cash value of $2.57 million.
General Motors Co. officials declined comment.
The retirement agreement was assigned to the new GM in conjunction with
an asset sale approved last week by a U.S. Bankruptcy judge.
GM also disclosed the identities of additional members of the old GM
board of directors.
The old GM -- now known as Motors Liquidation Co. -- is headed by
President and CEO Al Koch, who is vice chairman and managing director of
restructuring firm AlixPartners. Koch is handling the sale and
liquidation of the old company's assets, such as the Pontiac, Hummer,
Saab and Saturn brands.
On the board, he is joined by James Selzer, who is vice president and
treasurer of the old GM. Selzer also is a director in the corporate
turnaround and restructuring practice of AlixPartners.
Koch and Selzer will be paid $835 an hour and $555 an hour,
respectively, filings show.
Their affiliated firm, APServices LLC, is entitled to a $13 million
"success fee" since U.S. Bankruptcy Judge Robert Gerber approved the GM
asset sale. The company also may be paid an undetermined fee by old GM,
according to the regulatory filing. The financial terms of the fee are
being discussed and are subject to approval by the bankruptcy court.
Earlier this month, the old GM elected five new directors who will serve
on the company's board. They are Stephen Case, who founded AOL but is no
longer associated with the company, former Chrysler Group President
James Holden, Alan Johnson, Alan M. Jacobs and Wendell Adair.
The directors will be paid a $50,000 annual retainer, plus $3,000 per
The old GM will file periodic reports with the SEC outlining liquidation
payments, expenses and other data. And once old GM is liquidated -- a
process Koch said could take two or three years -- a final report will
be publicly filed.