Losses sustained as a result of General Motors’ ignition switch recall will cut into the automaker’s executive bonuses for last year, Bloomberg reports.
The executive pay cuts will happen despite UAW members profit sharing payments rising to as much as $9,000 from $7,500 the year prior. GM said it doesn’t normally count large one-time charges like recall or restructuring related costs when calculating hourly worker’s profit sharing payments, as the amount is meant to reflect the performance of the business.
The report goes on to say that recall-related costs won’t affect the profit-sharing bonuses of “most” of GM’s white-collar workers, either, as those amounts are based solely on a combination of regional and global sales results. Executive bonuses will be the only ones to take a hit, according to consultant Maryann Keller.
“The optics of not reflecting the recall costs into executive bonuses would be really bad,” Keller told Bloomberg in an interview.
“Where does the responsibility sit? Ultimately it rests with the senior executives. The rank and file hourly person should not be penalized for something that had nothing to do with the nature of their job,” she said.
GM declined to comment on non-union profit sharing bonuses.
Comments
Got to give the UAW the bonuses as there is a contract due this year and you need them happy.
Unfortunately it doesn’t affect the bonuses of the managers who were in charge at the time of the fiasco.
Well decided! The top brass who are responsible for the business decisions should get their salaries cut, too. Even Mary Barra, who arrived after the fiasco, gets her pay hit, but she is open minded and accepts that penalty, as long as the others below her take hits, too. I wish someone would publish how much each VP and top officer is getting hit as a lesson for big business in the U.S.
Well this is a matter of doing what appears right.
Not taking the money is the right thing to show the Public after the bail out and recall. Not taking the money and giving the UAW their cut will hopefully work to help make things go better at contract time this summer. It is a show of good faith. You treat us right and make us profitable you will get rewarded. It is the way it should work.
Many of the people found at fault for the ignition are generally gone at this point. Retired or fired. Those here were generally out of the loop or had no idea due to the poor communication. But not taking the money is the right thing to do in the public eye. To win the public back it will take things like this.
The PR people will need to work to get this word out as the media will generally ignore anything positive about GM or anything they do right. If it does not bleed it will never lead in the media.