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New GM CEO won’t let his pay be cut to $1

General Motors' new chief executive says he will not cut his salary to $1 a year like his predecessor Rick Wagoner.
Image: General Motors CEO Fritz Henderson
General Motors CEO Fritz Henderson's base salary as chief operating officer was cut 30 percent to about $1.3 million this year when GM accepted government loans.Rebecca Cook / Reuters
/ Source: The Associated Press

General Motors Corp.’s new chief executive said Tuesday that he will not reduce his salary to $1 a year like his ousted predecessor, Rick Wagoner.

Fritz Henderson, GM’s former chief operating officer, said at a news conference that his pay will remain unchanged now that he is head of the troubled automaker. His base salary as COO was cut 30 percent to about $1.3 million this year when GM accepted government loans.

Wagoner had agreed to accept a salary of $1 as part of the Detroit automaker’s request for assistance. The company has been staying afloat because of the $13.4 billion GM has received since Dec. 31, and Wagoner stepped down as CEO on Monday as a condition for additional government aid.

Although Henderson isn’t taking a $1 salary, his compensation package in 2008 was significantly less than Wagoner’s, regulatory filings show. In 2008, Henderson received compensation valued at about $8.7 million. That included a base salary of about $1.7 million, stock options and restricted stock that the company valued at $6.6 million when it was granted. He also received $349,000 in other compensation, including $105,000 in security services.

However, the stock awards Henderson received were only worth about $487,000 at the end of 2008, due to the dramatic decline of GM’s share price, and the options to buy 1 million GM shares have little value unless the stock price rebounds.

Wagoner took home a compensation package valued at $14.9 million in 2008. That pay package is also worth a fraction of its stated value, though, due the decline in GM shares.

Shares of GM plunged 76 cents, or 28 percent, to $1.94 on Thursday. The shares were trading around $40 in late 2007.

Henderson took the reins at GM on Monday as President Barack Obama announced that the automaker’s restructuring plans didn’t go far enough. The White House gave the automaker 60 days to get concessions from its union and creditors before it would receive more aid to help it survive. GM is seeking up to $16.6 billion in additional loans.

Henderson said Monday that the automaker could close more plants and offer another round of buyouts to workers, and it was more likely to file for bankruptcy as it seeks to restructure.