GM's Wagoner payout contrasts with abandoned liabilities.
Publication:
Wednesday, 15 July, 2009 - 00:00
chiefofficersnet
Rick Wagoner may be presented as having fallen on his sword to secure the rescue of General Motors from terminal insolvency. But he's walking away with more money than much of the world' s population would earn in several lifetimes. It seems that the price of failure is a generous pay-off.
Let's get this straight: you run a company and fail to make the decisions that will ensure its survival in an increasingly competitive environment; you ask the government for millions of dollars to stave off insolvency - and you spend that then go back for more; you surrender to the inevitable and leave suppliers and employees at the mercy of the liquidation process; you lose all shareholder value.
And then you walk away with a pension for life of almost USD75,000 - plus a lump sum of USD8.2 million.
An estimated 20% of the world's population live on less than one US dollar per day, and have a life expectancy of around 62 years. That's roughly 225,000 per person in lifetime earnings. Or Wagoner is leaving with a lump sum equivalent to 38 people's lifetime earnings plus a pension that would keep more than 200 of those people for a year.
The money, of course, comes from GM's severely depleted coffers which have left suppliers facing their own severe insolvency.
Seems that the safest place when GM fell was standing at the top.