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GM execs' bonuses shrink
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April 20, 1999: 12:58 p.m. ET
Smith, other top managers get smaller incentive pay due to lower earnings
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NEW YORK (CNNfn) - General Motors Chairman John Smith and other top company executives didn't do as well in their 1998 pay envelopes as they did in 1997, according to a proxy statement filed Tuesday with the Securities and Exchange Commission.
Smith and two other members of top management -- Vice Chairman Harry Pearce and President Richard Wagoner -- saw their bonuses slashed by the vehicle maker because of its lower earnings per share during 1998. But the executives nearly made up the difference with higher base pay and long-term compensation.
Smith's bonus was reduced to $1.08 million for 1998 from $2.45 million in 1997.
"Although we considered his (Smith's) individual performance to be outstanding, we nevertheless consented to management's recommendation that 1998 annual incentive compensation for senior management be reduced to reflect the year-to-year earnings performance," General Motors' Executive Compensation Committee said in the proxy.
Due in large part to a strike during the summer, GM's 1998 earnings fell to $2.82 billion, or $4.18 a diluted share, from $6.28 billion, or $8.62.
Smith's base salary rose to $1.95 million from $1.75 million.. And he saw a boost in long-term incentive compensation to $1.6 million from $1.04 million. "The final award for Mr. Smith was paid above target, but below the maximum payout level," the committee said.
Not including stock options, Smith's 1998 total compensation fell about 11 percent to $4.79 million from $5.39 million in 1997.
As announced last week, Ford (F) Chairman Alexander Trotman received a total of $69 million in compensation in 1998. Trotman retired Jan. 1.
Both Pearce and Wagoner had lower 1998 bonuses of $475,000. Pearce's 1997 bonus was $1.07 million, while Wagoner's was $1.02 million. Both men received base salary raises -- Pearce to $1.16 million from $950,000 and Wagoner to $1.09 million from $925,000.
With increases in long-term compensation and other income, both Pearce and Wagoner had only slight decreases in earnings excluding stock options. Pearce's 1998 total compensation fell to $2.54 million from $2.61 million, while Wagoner's dropped to $2.46 million from $2.49 million.
The proxy statement was filed in advance of the company's shareholder meeting, scheduled for June 7 in Wilmington, Del.
GM shares were down 7/8 to 89-1/8 in midday trading Tuesday
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