Iacocca Given 8.1% Raise as Chrysler Earnings Dive

Chrysler Corp. Chairman Lee A. Iacocca was the only Big Three auto maker chief executive who got a raise in 1989, pulling in $4 million, or 8.1% more than he collected in 1988, the company’s proxy statement said Friday.

Earnings last year for the nation’s No. 3 auto maker were down 65.8% from the year before.

Iacocca’s compensation in 1989 salary and stock and in bonuses earned from the year before topped the $2.5 million received by General Motors Corp. Chairman Roger B. Smith. It was less, however, than the $6.6 million awarded to Ford Motor Co. Chairman Donald E. Petersen, who retired March 1.

Earlier this week, after GM and Ford issued their proxy statements, the United Auto Workers union called the executives’ compensation levels for 1989 a “disease.”

The union’s offices were closed for the Good Friday holiday.

Last year’s proxy statements in reference to 1988 showed that Iacocca and Smith collected $3.7 million each and Petersen got $10.5 million, mostly in stock.

Iacocca would have received more for 1989 had the company not withheld bonuses because of low corporate earnings. The Chrysler-UAW contract calls on executives to forgo cash bonuses in years when earnings don’t reach the threshold for profit-sharing checks for union-represented workers.

In 1989, Chrysler earned $359 million, far below the $1.05 billion in profit the company reported for 1988. GM and Ford made enough money to give their eligible workers profit-sharing checks of $50 and $1,025 apiece respectively.

Chrysler’s proxy statement said Iacocca’s $889,151 salary for 1989 was increased by $525,000 in cash compensation paid last year from 1988 earnings. The colorful executive also was awarded $2.6 million worth of stock.

Other top Chrysler executives’ compensations contained in the proxy statement included: Vice Chairman Gerald Greenwald, $1.1 million; Chrysler Motors Chairman Ben Bidwell, $976,709; Chrysler Motors President Robert A. Lutz, $951,436; and Executive Vice President Robert S. Miller Jr., $874,266.

Although none of the executives will be receiving bonuses based on 1989 earnings, the board has set aside $22 million from corporate earnings for compensation later.

The two issues up for shareholder votes at Chrysler’s annual meeting would change the number of votes each shareholder could cast in elections for directors and require that each director hold at east 2,000 shares of Chrysler common or preferred stock.

The board opposes both motions.