General Motors Corp.'s chief executive saw his 2005 compensation almost halved from a year earlier, the company disclosed on Friday, on the same day he promised shareholders to turn around GM's North American operations and apologized for accounting errors.
CEO Rick Wagoner made $5.5 million in 2005, down from $10.1 million in 2004, GM said in a filing with the U.S. Securities and Exchange Commission that also revealed pay cuts for other top executives.
In a letter to shareholders, Wagoner called GM's 2005 loss of $10.6 billion unsustainable, but said the automaker has enough cash and time to see itself through a turnaround.
Wagoner also said the company will focus on increasing transparency in its accounting. A recent spate of accounting errors prompted the automaker to restate earnings going back several years.
Credibility is paramount, for GM as a company and for me personally, Wagoner said in the letter. While I will not offer excuses, I do apologize on behalf of our management team, and assure you that we will strive to deserve your trust.
GM is under investigation by the SEC for issues ranging from accounting for sales of precious metals to the way it booked credits from suppliers.
The recent discovery of prior-year accounting errors has been extremely disappointing and embarrassing to all of us, the letter said. We are moving aggressively to strengthen our internal accounting resources.
GM, which has been struggling with high labor costs, is in the middle of a sweeping restructuring, as it slashes 30,000 jobs and closes a dozen plants. The automaker also halved its dividend earlier this year and cut top executive pay.
Wagoner's 2005 compensation included a salary of $2.2 million, stock options of about $2.9 million and personal use of company aircraft, security services, financial counseling services, and the company's vehicle program, according to the filing.
Chief Financial Officer John Devine made $3.9 million in total compensation, down from $6.4 million in 2004. His pay included a salary of about $1.5 million, stock compensation and other expenses.
Vice chairman and chief of product development, Bob Lutz, received annual compensation of about $3 million, down from $6.5 million a year earlier. Lutz's pay included a salary of about $1.5 million, stock compensation and other expenses.
None of these executives received a bonus, and all three saw their base salaries unchanged.