General Motors (NYSE:GM) shared good news for Chief Executive Officer Mary Barra Monday when the auto company said in an e-mailed statement that Barra may receive total compensation this year of $14.4 million, $10 million more than the amount GM disclosed in January. Bloomberg highlighted the news after the bell Monday and explained that the extra $10 million that Barra may receive as part of a long-term compensation package is dependent on the automaker’s performance in the future. GM also said Monday that the portion is subject to shareholder approval at the company’s annual shareholder meeting in June.
Barra took over the reigns at GM on January 15 after former CEO Dan Akerson stepped down, marking the first time a female has steered the ship at a global carmaker. Following her appointment, the Detroit-based automaker said that Barra, 52, would earn $1.6 million in salary and $2.8 million as part of the company’s short-term incentive plan, as reported by Bloomberg, but GM was subsequently criticized for paying her only a fraction of what Akerson received. Though GM noted back in January that Barra was likely to receive additional compensation as part of the new long-term incentive plan, onlookers still blasted the company for its alleged sexism, and Elizabeth MacDonald wrote via Foxbusiness.com, “Why does GM think Barra’s value as its CEO is currently worth 52 percent less than Akerson’s?”
Those criticisms led GM to further disclose its plans for Barra’s long-term compensation Monday, and resulted in the company reporting that the chief executive may receive $10 million more than previously disclosed if GM performs up to par. GM released an explanation of the new breakdown in its e-mailed statement, “The company released the full figures ahead of its proxy filing in April to correct misperceptions created by comparisons that used only a portion of Barra’s overall compensation.”
So things are decidedly looking up for Barra — as long as she can guide GM to the same degree of success Akerson had managed to before his retirement. Bloomberg reports that the former CEO will remain at CEO as a senior adviser, making him eligible to receive a pay package worth as much as $4.68 million this year, but he’s still only expected to stay in the position less than a year.
Nonetheless, GM’s statement was still interesting Monday as it illuminated the current challenges major companies are continuing to navigate, even as they make significant breakthroughs and set the precedent for followers in the future. GM was recognized in January as the first global auto company to appoint a female CEO, but the praise didn’t last long once media outlets learned what the company was initially planning on paying her, before disclosing long-term compensation figures.
Still, compensation for leaders of different automakers does vary widely, and it’s not necessarily fair to point fingers at GM right off the bat, especially considering a company’s performance has long determined how much the CEO will be paid. That means we’ll have to wait and see how GM fares to learn what Barra will really be making.