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.