Payouts Grow for Big 3 Auto Executives
The Big Three auto makers, criticized last year for their executive salaries and bonuses, announced even bigger payouts Friday to their top executives.
The payouts totaled $1.8 million for General Motors Corp. Chairman Roger B. Smith, $1.6 million for retired Ford Motor Co. Chairman Philip Caldwell and nearly $1.2 million for Chrysler Corp. Chairman Lee Iacocca.
GM said that for 1984 it paid Smith $642,000 in salary, $950,000 in bonus and $250,000 in a special “performance plan.”
Caldwell, who retired recently as the first non-family head of Ford, received a 1984 salary of $630,000 and a $950,000 bonus.
Iacocca was paid $570,000 in salary and $625,000 in bonus.
Unlike GM and Ford, Chrysler’s latest figures were for 1983. Its bonus plan was approved by stockholders later than GM’s and Ford’s. The 1984 amounts for Iacocca will not be released until next year.
Iacocca himself was critical last year of Smith and Caldwell’s 1983 compensation. His $625,000 bonus compares with $866,000 for Smith and $900,000 for Caldwell that year.
The disclosures were made in the companies’ yearly compensation announcements for their top five officers.
Wide Criticism
The 1983 bonuses for Smith, Caldwell and their management teams set off a wave of criticism against the U.S. auto industry from unions and the Reagan Administration.
GM and Ford responded by slashing millions from the maximum bonus amounts allowed in their bylaws. But both enjoyed even higher profits in 1984, yielding bigger bonuses.
GM listed no exercising of stock options by Smith. Ford said Caldwell exercised nearly $2.5 million in stock options. Chrysler said Iacocca exercised $4.3 million.
F. James McDonald, GM’s president, received a salary of $563,000 and a bonus of $810,000.
Ford said its former president, Donald Petersen, who has replaced Caldwell as chairman, earned a salary of $487,000 and a bonus of $750,000 for 1984. The executive promoted to replace Petersen as president, Harold Poling, made $390,000 in salary and $700,000 in bonus.
Second to Iacocca at Chrysler, Vice Chairman Gerald Greenwald was paid $402,000 in salary and $475,000 in bonus.
Chrysler turned a $701-million profit that year and tripled that to $2.4 billion in 1984.
GM made a record $4.5 billion in net profits last year, despite costly strikes in the United States, Canada and Europe.
Ford made $2.9 billion, also a company record.
Law Requires Disclosure
The bonus and salary disclosures were made in the company’s proxy statements to shareholders in preparation for their annual meetings later this spring. Federal law requires that the total compensation of the top five officers of each company be published.
Last year’s reports showed that in 1983 Smith made $625,000 in salary and $866,000 in bonus for running the world’s second-largest industrial corporation, for a total of about $1.5 million.
Caldwell, who passed the reins to Petersen on Feb. 1, made a salary of $520,000 for 1983 and a bonus of $900,000, for a total of more than $1.4 million. In addition, Caldwell made millions in stock options.
Petersen made a $413,000 salary and $700,000 bonus for 1983, for more than $1.1 million, as Ford president.
The auto industry made a combined $6.15-billion profit in 1983. In 1984, Big Three profits approached $10 billion.
Labor Reaction
The United Auto Workers union used the 1983 payouts as ammunition in its contract talks with GM and Ford last year. The White House used them to claim that the industry had recovered from its depression of the early 1980s and that quotas on Japanese car imports should be eliminated or relaxed.
Some Cabinet members joined in criticism of the large bonuses.
Japan has announced plans to increase its car shipments to the United States by 25%.
American Motors Corp. released its proxy statement last month and it contained no bonuses. The document said the company won’t turn “significant profits” until it expands its car line into larger, more profitable vehicles. AMC made a $15.5 million profit in 1984, its first profit in five years.
