Big Three CEOs To Take $1 A Year Salaries If Their Companies Get Bailed Out (POLL)

Now that Americans have footed the bill for more than a trillion dollars in bailouts, Congress is finally starting to clamp down on executive pay as a condition for a bailout.

AP reports, "Some members of Congress have urged the Big Three executives to take major pay cuts as part of the deal. Chrysler Chief Executive Robert Nardelli said he would work for $1 a year, and a similar commitment is expected from GM CEO Rick Wagoner. Ford plans to include a pay cut for Ford CEO Alan Mulally, although the size of the cut was not immediately available."

Just this morning, Ford's CEO said he would take $1 a year in pay if Ford got bailed out. Chrysler and GM's CEOs joined the salary-reduction pledge as well.

Ford Motor Co. will tell Congress that it plans to return to a pretax profit or break even in 2011 when its CEO appears before two legislative committees this week.

Also, CEO Alan Mulally said he'll work for $1 per year if the automaker has to take any government loan money.

The plan Ford is presenting to Congress this week also says it will cancel all management employees' 2009 bonuses and will not pay any merit increases for its North American salaried employees next year.

Other cost-cutting actions include a plan to sell Ford's five corporate aircraft, the company said.

Take our poll and tell us if you think this a good policy for all bailed out companies:

Quick Poll

Should CEOs Who Are Getting Bailed Out Forfeit A Salary?

YES

NO

Comments

[1Greensix]

They will still use the company jets, company limos, company resorts, company credit cards, etc. Let them go under. Why should I support a company that builds an inferior product. I wouldn't buy GM, Ford or Dodge product under ANY circumstances. My Corvette is a money anchor. One thing after another breaks, wears out, or falls apart for no reason. What a piece of American crap! I'll never buy anything but Toyota or Honda again.

[insanityfollows]

These look like the most unhappy men on the planet. They all look like someone just told them that their cookies just got taken away.

On a side note, these compensation issues are the evolutionary result of the takeover/merger madness of the late eighties and nineties. It all started with RJR/Nabisco, and almost immediately after that, these excessive salaries and companies being driven by shareholders' returns driven by profit margins, rather than bona fide business practices and the performance of the company. All of us are working with smaller staffs or shrinking staffs, because keeping costs down keeps the profit margins higher, which produces higher returns on shares, which causes people to buy more shares, and it just keeps spiraling up. Or did. I think maybe this vicious cycle has finally been busted. I hope so, anyway.

[rdy4change]

If I were Queen for a day, I would have these CEOs and their predecesors for the last 20 years start paying up for their own bailout, with their own money, the money that they made running companies to the ground. The way I see it, it was a defective product (their services) so I want my money back (as a taxpayer and shareholder - not that I'm part of the latter). Return the extremely high salaries and bonuses. Gosh, wonder how much that would amount to.

[Robertx5]

Offering to take a pay cut to a nominal $1 is just pandering to the public and media, much as driving to the capital from Michigan instead of flying is.
Either they are up to the job of running the companies in question, in which case they deserve reasonable remuneration.or they are not and should leave.
As for the furore concerning flying down to Washington in corporate jets, it seems a perfectly sensible thing to do. Likely there is a team of you, needing to finalise details of your presentation. Hanging round at an airport waiting for a commercial flight, discussing company policy within earshot of other passengers does not strike me as efficient, wise or cost effective use of a senior executive's time.
P.S. my definition of reasonable remuneration is not many millions of dollars.

[IronMikeHouston]

This $1/year salary is all BS. How many shares of stock (free) will they receive in addition to their $1 salary. I see nothing wrong with commercial flying. Why shouldn't they discuss policies at the airport like must business travelers? What fringing secrets could they possibly have.

[win2kpro]

First of all, I am not associated with any of the big 3 automakers in any way. I don't own any stock in GM, Ford or Chrysler, or any manufacturers that supply components to them. I don't have any relatives (that I know of) that are employed by these companies or any of their suppliers.

I believe one point many people are missing is; if the Government doesn't provide the loans they are requesting, when they shut down or start laying off employees this will simply exacerbate the mortgage crisis. It's a "catch 22" situation, we are damned if we do provide the loans, and damned if we don't.

It may be cheaper to make the loan and try to keep them in business than to add an additional load on home foreclosures.

[flymic]

Obviously they'll take $1 dollar salary... this is an investment in Goodwill because they know they'll get a $20 million bonus

[amyeom]

ding ding ding! eggZaactly.

[Acid Monkey]

$1/pa salary? I'm assuming that they'll forfeit their million dollar bonuses at the end of the year as well? What about the other perks and benefits they may be getting?

[PaleMail]

You are absolutely correct, the devil is in the details. Bonuses, deferred salary, post-retirement income guarantees, stock options, private-jet travel, expense accounts, etc., etc. all figure in the compensation package and often much hidden from shareholders and taxman. But in the world of executive suites the unwritten understanding is you scratch my back, I'll scratch yours.

[Bec01]

What the heck took them so long to decide do this? What a bunch of crooks.

[Chardin]

Many of us asked Congress to refuse these bailouts on our behalf. Many of us
demanded that there be strict conditions including no free rides for
the irresponsible profligate spenders and financiers. Did congress listen to us? No.
Let the CEO s in addition to taking their green back home, divvy up the spoils
they have enjoyed over the last 5 years that drove their companies into moral and financial bankruptcy and share those spoils with their laborers who have lost their jobs and pensions.
Then force them to re tool their factories to produce ONLY fuel efficient engines.
THEN we might think they are sincere and deserving of our hard earned tax dollars.

We don't think they are now.
These Big 3 are big piggish SUV s that knew exactly what they were doing and did it anyway.
Why should we pay them...eve­n $1.

[lgg]

hmmm, if i ran a company into the ground i think i would be out of a job. The top level management of these companies and banks for that matter all get to keep theirs...d­ouble standard.

I say 1 dollar is too low. they should have to work for minimum wage and have to collect the check every month so that they can see what the average American has to live on. maybe next time they'll be better stewards of their privilege.

[NoMoreFreepers]

Whoa lookit the mugs on those two on the right....a picture paints a thousand words!

Foresaking their HUGE salaries for the good of the company isn't a happy thought is it.

Welcome to reality boys. Time to roll up your sleeves and go without just like the rest of us schmoes do every day of our lives!

[aweissnet]

Is it possible to notify our local congressman, senators, etc., that we don't buy a deal with this facade? Maybe THEY (hahaha) don't know how many bennies are given in lieu of salary. Cuz, you know, they never got such privileges.

They think they have us sufficiently fooled, and complacent.

Don't y'all think we need to begin to speak up???? Did we protest at the bank bailout?

We need to show them we're not mindless sheep, and share our knowledge ... since they are showing signs of being mindless sheep.

Please .... we need to do something. Do your part.

[CologneCitizen]

I thought America is a free country where you either succeed or you fail. With all these multi billion bailouts I have lost confidence America is a just country. If you are bankrupt so start from scratch. What about homeowners losíng their house because they didn't do the math ? What about people who are in no debt because they spend their money wisely and now see their tax money go to losers and frauds ? It is not hard to see there is something seriously wrong. It proves the wealth of the wealthiest is protected in high places. The rest is told they líve in the greatest country on earth, just try again, America hates whimps.

[aweissnet]

Yeah, like college students who took out loans, now don't have jobs, and can't re-pay.

Like people who weren't earning enough money, made bad decisions on credit to pay their rent and food bills.

So, yeah, let's protect those who had all sorts of other options besides criminal and destructive behavior and continue to ignore those truly in hardship.

In fact, certain posters like to feel they're all "deadbeats" anyway.

But those banking dudes and automaker big dudes are perfectly ok. Cuz they're rich.

[gmlaster]

The government should not only make this a short-term loan with extremely stringent terms, but one of the conditions for granting this loan should be the forfeiture of the salaries of the CEO's and any management staff who's made over $1M in the last year. They should also have to sell their yachts, airplanes and company stock and put the proceeds into a kitty to help pay the salaries and pensions of their workers. They should have to do this before they're allowed to fire or lay off a single employee. Confiscating some of their millions would go a long way toward paying their bills.

We may have to bail these companies out, but it's time to send a serious message to these companies that the days of endless corporate welfare are over. The government did a welfare-to-work program in the 90's to weed the deadbeats out of the welfare system. They need to apply the same concept to corporate welfare whores like the airlines and banks who keep coming back for help they either don't really need, or help they require because they mismanaged their companies.

[ibsteve2u]

Why is it that all of the talking heads on TV ramble on and on about the cost-disadvantage the Big Three faces in autoworker wages and benefits when compared to foreign-owned plants - but they NEVER make any effort to compare salaries and benefits between white-collar workers at the Big Three and their counterparts at foreign-owned plants in the U.S. and overseas?

Not to mention, I daresay a comparison of C-level executive salaries, benefits, perks, and stock options would be...enlig­htening?

And, gee...let'­s not forget the bogeyman of American industry: Somebody should compare what stockholders get in dividends between U.S. and foreign-owned companies.

Wall Street has played a huge role in destroying American industry by demanding ever-higher returns, and so forcing many jobs overseas. Are they being practical, or just greedy - at the cost of our nation's economy?

[fussygorilla]

ibsteve,

I agree with what you said EXCEPT "wall street has played a huge role in destroying American industry". American manufacturers have destroyed Ameican industry because they just cannot compete. They build junk cars, inefficient, low quality, uneconomical cars as compared with the Japanese. Also, American workers just don't do a good job and are overpaid like their bosses.

I suggest American car makers just close down factories for good. They cannot do the job.

[aweissnet]

Wall Street has played a huge role in destroying a lot of business, the economy, your 401K and a whole lot else. You know, the earnings frenzy. Earnings! Earnings! And Morningstar et al.

Well, they could have increased earnings, while sales dropped, or expenses soared, if those highly-paid execs took a willing pay cut for the quarter, but that wasn't EVEN an option.

So, first you have the problem of the "Corporation," and then you have Wall Street. A disastrous combo.