Iacocca Takes $6-Million Pay Cut : But Chrysler Chief Still Makes $17.8 Million for Year
Chrysler Corp. Chairman Lee A. Iacocca suffered a $6-million pay cut in 1987 but still earned $17.89 million in salary, bonuses and stock options, a statement to shareholders showed on Tuesday.
The reduction occurred because Iacocca did not exercise as many stock options in 1987 as he did in 1986, when he earned a total of $23.6 million to become the highest paid U.S. executive that year.
Iacocca, who accepted a symbolic salary of $1 in 1980 when the company was close to bankruptcy, earned far more in 1987 than his counterparts at Ford Motor and General Motors.
The figures were contained in Chrysler’s proxy statement, mailed Tuesday to shareholders.
Iacocca’s earnings were part of the $85.2 million in compensation that executives of the No. 3 auto maker took home last year.
Chrysler released the figures the day after it opened early contract talks with the United Auto Workers, and union Vice President Mark Stepp blasted the earnings as “an incredible rip-off.”
Exercised Options
Stepp, who leads union negotiators in the talks, said in a statement with UAW President Owen Bieber that the executives’ earnings “blatantly contradict the message they try to send UAW members in their factories and offices.”
Iacocca’s 1987 earnings of $17.9 million included nearly $13.5 million from exercising stock purchase options granted earlier in the decade, when Chrysler was recovering from near ruin and its stock was worth a fraction of its present value.
Iacocca also received $765,890 in salary, $725,000 in cash bonuses, $249,000 in stock bonuses and a stock grant worth nearly $2.7 million when it was issued Dec. 8.
In 1986, Iacocca took home $20.6 million, including $9.3 million on exercised stock options. Proxy statements released and compiled later in the year showed he was the nation’s highest-paid executive.
Chrysler’s No. 2 executive, Gerald Greenwald, received nearly $6.6 million in 1987, including $560,000 in salary and nearly $5.3 million from exercising stock options. Greenwald is chairman of Chrysler Motors Corp., the company’s auto making subsidiary.
In all, Chrysler paid out $85.2 million to 2,035 executives in 1987: $77.9 million in cash, more than $1 million in stock bonuses and nearly $6.3 million in retirement bonuses, Chrysler spokesman John Guiniven said.
