Henderson GM Consultant, Whitacre Paid $9 Million

Some surprises in General Motors’ SEC 8-K filing.

by on Feb.19, 2010

Why is this man smiling? Perhaps a $9 million pay package might help.

Though he initially took on CEO duties without pay, General Motors boss Ed Whitacre, Jr. won’t be going hungry.  Even if his tastes run toward prime Kobe beef, rather than Texas longhorn, Whitacre should be able to come up with the cash considering he’ll now be getting a pay package worth $9 million, the automaker announced late today in an 8-K filing with the Securities and Exchange Commission.

Few expected Whitacre to continue to volunteer his time as GM’s chief executive.  But the SEC filing did contain one big surprise: news that former CEO Fritz Henderson, ousted in a scuffle with Whitacre, late last November, has returned as a company “consultant.”

The month-to-month agreement, which could run through December 31, 2010, provides the former GM executive with $59,090 a month – “reasonable” expenses.

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For that sum, Henderson will put in 20 hours a month consulting on international operations – an area he specialized in before returning to the U.S., several years ago — and he will meet at least once a month with Whitacre or one of the new CEO’s representatives.

If the $59,090 a month isn't enough, former CEO Fritz Henderson now can put in for "reasonable" expenses as a new GM consultant.

Considering the sharp salary cap put in place late last year, by the Obama Administration, which now holds a controlling stake in GM, that’s a significant pay increase, at least on an hourly basis. (But he also took home substantial stock and other compensation that boosted his total 2009 takeaway to $5.5 million, including $950,000 in cash.)

As for Whitacre, who was first named GM Chairman, by the White House, when GM emerged from bankruptcy last July, he’ll get a total of $9 million.  But only $1.7 million of that will be in the form of a salary.

Whitacre, the Texan and former chief executive at AT&T, will get another $5.3 million in GM stock, which will be payable over a three-year period starting in 2012.  He will get another $2 million in restricted stock.

At the moment, GM is operating as a privately-held company, but it plans to stage an Initial Public Offering, possibly as early as the end of this year.  Whitacre has cautioned, however, that he won’t approve an IPO until the company can maximize the value of any new shares it intends to offer, which suggests that GM will likely wait until 2011, when it hopes to have a better track record with which to entice investors.

Whitacre’s pay package was approved by the same government overseers who demanded a pay cut for Henderson and other senior GM executives last year.

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2 Responses to “Henderson GM Consultant, Whitacre Paid $9 Million”

  1. Larry says:

    The Henderson consultant deal has the appearances of being a remanipulation of a severance package with a new name.

    • tdb says:

      Now, wait a sec, Larry, are you saying that a $3,000/hour fee for someone with the international experience of a Fritz Henderson isn’t justified…?