Did New GM CEO Mary Barra Get Fair Pay at $1.6 Million?

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New General Motors Co. (NYSE: GM) CEO Mary Barra will get a base salary of $1.6 million. She can make about three times that in total bonuses and other compensation, according to a filing with the U.S. Securities and Exchange Commission. While she becomes a millionaire, is the pay package fair?

GM’s filing, which included new President Dan Ammann, said:

On January 13, 2014 the Executive Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) approved new compensation arrangements for Ms. Barra and Mr. Ammann. Ms. Barra’s annual cash base salary as Chief Executive Officer will be $1.6 million, and she will participate in the benefit plans currently available to executive officers as described in the Company’s Registration Statement on Form S-1, filed August 18, 2010 and subsequently amended, and as set forth as exhibits to various periodic filings by the Company (the “Benefit Plans”). As additional 2014 compensation she will be eligible to receive $2.8 million under the Company’s 2009 Short-Term Incentive Plan, as amended (the “STIP”). Mr. Ammann’s annual cash base salary as President will be $900 thousand, and he also will participate in the Benefit Plans. As additional 2014 compensation he will be eligible to receive $1.125 million under the STIP.

GM’s retiring CEO made much more last year, and Ford Motor Co. (NYSE: F) CEO Alan Mulally has been one of the highest paid CEOs in America. The GM board would argue that Barra is new, and as a CEO completely untested.

Former GM CEO Daniel F. Akerson made $11.1 million in 2012. He made $7.7 million the year before, and $2.5 million in 2010. While GM was already at the start of its turnaround, the GM board rewarded him for finishing it. GM’s shares actually did poorly from when they began to trade again in November 2010, one of the final signals the company had put its Chapter 11 behind it, through the end of 2012. Shares were down 15% during that period. By comparison, the S&P 500 was up 20%. GM’s board clearly put the turnaround itself over Wall Street’s reaction.

Mulally benefited from the belief in may circles that his performance at Ford made him one of the finest CEOs of the past decade. (Good enough, apparently, that he was a front-runner to take over the top job at Microsoft.) Mulally made $78 million between 2010 and 2012. He may have been helped by the fact that the Ford family continues to dominate the board. Mulally did save their fortune.

The only reasonable evaluation about Barra’s compensation will come two or three years from now, as analysts can look back. In the meantime, Ford needs to at least hold its own in the United State, make up for lost ground in China, the world’s largest car market, and solve the problem of hundreds of millions of dollars in losses in Europe.