On Tuesday August 4th, 2015, General Motors granted stock options to to 300 executives. The options are the first granted by the automaker since it emerged from bankruptcy as a new entity in 2009.
According to a GM regulatory filing, the grants are part of GM’s 2014 long-term incentive plan, which it announced previously. The following five executives came away with the most options:
| Employee | Position | Stock Options Granted |
|---|---|---|
| Mary Barra | CEO | 2.6 million |
| Dan Ammann | President | 976,139 |
| Mark Reuss | Head of global product development, purchasing and supply chain | 829,719 |
| Chuck Stevens | CFO | 623,645 |
| Karl-Thomas Neumann | President of GM Europe, chairman of Opel board | 585,684 |
The options can only be exercised by executives after they vest and only if certain performance objectives are met, as per the terms of the award and incentive plan. In addition, GM’s stock price must be higher than $31.32, Tuesday’s closing price on the NYSE.
“The grant will be made to senior leaders of the company to maintain the leadership consistency needed to achieve the company’s short- and long-term goals,” GM said in the filing. “As a condition of accepting the grant, each recipient will be required to execute an award agreement containing non-compete and non-solicitation covenants.”
GM’s launching of the stock options is notable given that its competitors offer the options and it hasn’t done so for roughly six years, since emerging from bankruptcy. As such, they assist in keeping executive talent at the company. A spokesman said the non-compete and non-solicitation clauses also will help GM retain its top executive talent.
The stock options function in the following way:
- Executives only benefit from the options is GM’s stock price grows past the $31.32.
- Once the options have vested, GM executives can exercise their option to buy company shares with their own funds at the $31.32 price and either hold the shares or buy and sell the shares, thereby netting the gained difference between the sell and buy prices.
- 40 percent of the options will vest on February 15, 2017. The rest will vest upon the company achieving performance targets. The performance stock options will vest in three annual amounts starting February 15, 2018 if the company’s total shareholder return equals or is greater than the average performance of a peer group of automakers that GM is tracking.
Comment
Only half the job done in remaking this company after bankruptcy and the chiefs are rewarding themselves with millions of dollars through stock options . Isn’t this COOL or what ?? Frankly , hope this comes back to bite them big time for the union rank and file have been WAGE SQUEEZED for years now and enough is enough ! These are the people that are building the vehicles that make the wheels turn and the ultimate company profit . They must be a part of whatever rewards are handed out , they come first , not LAST !!!