Who could have written this script? Fritz Henderson has been rehired, this time as a consultant at $59,000 a month (which comes to around $3,000 an hour for the 20 hours his monthly contract requires). His boss, Ed Whitacre (right), the one who had fired him, will be getting a $9 million pay package. That’s about $4,500 an hour.
Fritz is probably worth the money (his rate is pretty typical for top executive ranks in U.S. corporations); Ed surely is not. In any case, it’s another bad story coming to light about GM. One of our regular commenters, randy, had this to say:
So the government makes them hire a board chairman who knows nothing about the car business, who then forces out Fritz and takes his job as CEO too, all while retaining the product guy [Bob Lutz] who got them into trouble in the first place, and now wants Fritz to tell them what to do.
One of GM’s PR people, Renee Rashid-Merem, defended the arrangement this way: “Ed is a long-serving veteran CEO and chairman, and while his package is higher than Fritz’s, it is significantly lower than that of our peer companies.” The whole arrangement is disgusting, and these jerks should be paid nothing. As I said last week, “They should be working for $1 a year.” Not $4,500 an hour.
Henderson (right) at least has a lifetime of GM experience, knowledge, and contacts that could serve the company well. Whitacre has said, “I don’t know anything about cars.” But he sure knows how to line his pockets. In his tenure at AT&T, he made millions and turned in a very middling performance.
Alan Mulally, former Boeing CEO, came to Ford with a $3 million pay package, but has turned the company around while keeping it out of bankruptcy. Insiders at GM have been outraged by the Henderson rehiring and by the lack of any real transformation at the company. Scroll down for comments here.
Worst of all, we are stuck with these guys, as the government reportedly pulled in Whitacre on the advice of Steven Rattner, the former Car Czar. The Obama administration, I think, was right to take over GM, but made a major misstep in how it handled the management issues.
We are all going to suffer from that bonehead play.
How can the government, as majority stockholder, set GM on a new course? What should it do now that it has given away most of its leverage?