Late Friday night we posted an article questioning news-website reports that Rick Wagoner got a cut in his base salary. To make things short, Automotive News published an article via Reuters saying that GM’s CEO Rick Wagoner got a 25% cut in his base salary for 2007. We checked around several news sites and to our surprise, we found variations not only in concern of Wagoner’s 2006 total salary but also in whether he got a raise or not. You can check our full article here.
Sunday morning we sat down and riffled through GM’s 121 page-long SEC Fillings. A coffee and a few cigarettes later we found what we were looking for: As you can see on page 24 (or 26 in the PDF), GM notes, “Messer. Wagoner, Henderson, and Lutz recently reviewed this matter and in support of the continued GMNA Turnaround Olan, again decided that beginning March 1, 2007, they will continue voluntary salary reductions. The Committee agreed with this approach. Mr Wagoner’s salary will be $1.65 million. 25 percent less than his January 2006 base salary of $2.2 million.”
Confused? Well, let us straighten things out. Wagoner’s base salary in January 1, 2006, was $2.2 million. However, in February of the same year, Wagoner agreed to a 50% cut -actually, it was a 42% reduction as he got a $1.28 million “pay check” for 2006. As of March 1, 2007, Wagoner’s base salary is $1.65 million. Therefore, compared to what he should have received as a base salary according to his contract, Wagoner’s getting 25% less but, compared to last year’s paycheck, he’s actually getting 28,9% more! In other words, GM agreed to restore 50% of the cut he received in February 2006.
Obviously, Reuters and subsequently Automotive News who citied the first as the source, neglected to check out Wagoner’s cut in February 2006.Thumbs up to Bloomberg for being the only site we checked that got all the facts right.
Data: Automotive News, Reuters, Bloomberg, Detroit Free Press, Detroit News, GM (GM Excel file)