General Motors will now determine how much executives receive in incentive packages based on earnings, global market share and quality, the Automotive News reports. The changes were implemented after the U.S. government sold its remaining share in the automaker in December.
In February, details were released on CEO Mary Barra’s planned compensation for 2014, foreshadowing the compensation plan in place for other high-ranking executives. She would receive a combined $4.4 million from a salary of $1.6 million and short-term stock incentives of $2.8 million and an additional $10 million if the company meets certain goals.
“We believe that linking pay to the achievement of both short- and long-term goals is an important cornerstone of employee engagement,” GM said in a proxy filing with the U.S. Securities and Exchange Commission.
Long term compensation through to 2016 will be determined on performance measures such as global market share and invested capital. AN says payouts under both long and short term measures will range from 0 to 200 percent of targets. GM also said in the proxy filing that 25 percent of long-term incentive pay for 2014 will be awarded in the way of restricted stock units that will vest over a three-year period.
According to AN, the changes are designed to better link individual business performance to stock holders’ interests, maintain a line of sight between company performance and individual rewards, support good corporate governance objectives and compensation practices, mitigate business risk and enhance GM’s ability to attract, retain and reward talent.
With the approval of the revised incentive plan, GM will now require employees at the senior executive and higher levels to own stock in the company. They will have five years to acquire and hold GM securities under the program.