We don’t know how much GM CEO Mary Barra made in 2018 yet, but looking at her compensation for 2017, she made a whopping 295 times more than the median GM employee.
The Detroit News began to compile the compensation of Michigan’s top executives in a Monday report. Since GM has not filed its documents the federal government requires after the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act passed, we can only use 2017 number so far. Last year, Barra made just shy of $22 million. The average GM employee makes $74,487 annually.
The disparity has opened arguments into ensuring regular workers receive fair wages and how governments and companies need to ensure the pay gap continues to close. GM, however, may not be the best example. A $75,000 annual salary is rather healthy. Lear is a better example, where the CEO made almost $10 million last year, while the average worker made $10,000, or a ratio of 987:1.
Of the top executives in Michigan, Barra was the highest compensated of them all. Ford’s CEO, Jim Hackett, made $17.7 million in 2018. Ford has already filed its executive pay documents for 2018. Fiat Chrysler Automobiles is not required to file the documents since the company is headquartered globally in Italy.
While some use the information to bolster arguments for higher wages, others disagree. Edwin Locke, professor emeritus at the University of Maryland’s Robert H. Smith School of Business, said in the report that a good CEO is “priceless.” If an organization taps an unqualified CEO, he or she could take the entire operation down with them. That leaves zero jobs and no wages for workers. High salaries are one way to attract good talent to top positions inside of companies.
Locke added there’s no “objectively correct” ratio between a CEO and an average worker.
Subscribe to GM Authority for more Mary Barra news and around-the-clock GM news coverage.
Source: The Detroit News
Comments
A good CEO is priceless? Toyota and Subie CEOs must be rejects then, making only $3M, $1M respectively?
These manufacturers are not closing plants in the USA, nor did they need a bailout to survive; and they produce cars that are generally viewed as high quality and having high value.
It’s all related, too much money does things to people, Barra is an example of a CEO of a company out of touch with its own products and employees in the quest for more and more money.
Part of it is the American corporate culture. Profit is everything. GM is like McDonalds, a few people at the top are filthy rich, the worker making the product is poor, the quality of the product is lacking, but loud marketing keeps the masses coming.
This guy gets it. We used to be a GM family, but the General just isn’t competitive enough. Not a single product is best-in-class.
Megatron: Actually, the Volt/ELR/Voltec were best of class, even in a class by themselves. But Mary killed them anyway. So in the end, you turn out to be correct.
The worker making the product at GM is definitely not poor.
magirus you are about as sharp as a bowling ball….smh
I agree GM is probably not a good example at all. Many people would love to work for a company where the average salary is $74k.
I would also say that nobody in their right mind (or anyone qualified or capable) would take on the high stakes high stress job of CEO in charge of thousands of peoples livelihoods for no extra pay.
I agree that $22million is excessive, but it wouldn’t be worth taking on that kind of stress for a couple hundred thousand.
Money is out there if you take the time to get the education, experience or learn a good skill. But yet so many sit and complain that it is not them making the money but yet what have they done to improve their place?
Giving someone more money top stock shelves at Walmart is not the same as someone learning a skill and using it.
Stop worrying about that others make and improve yourself.
The people making lots of money have often spent the time in school, Spent many hours of over time on the job. Often one or two marriages. Moves to several countries overseas to live. Along the way getting kicked and stressed to near health damaging conditions. Some deal with it better than others.
We all come into this world just the same and what you make of it is up to you.
Odds are if you are not happy with what you have now more will not fix it anyways.
With the high demand for good drug free workers today now is a good time to get ahead.
Or you can just run for the house and make a good living doing nothing.
Everyone wants to be a millionaire but they all want to not work for it and continue to shop at Walmart.
How naive. If you think that the best and brightest and hardest working automatically rise to the top you are sadly mistaken. To think that someone born in inner city Detroit and someone born into privledge have the same odds of success, you are sadly mistaken. Real world: there are people who get their positions because daddy was a big shot in the company or because someone thought it would be politically correct to fast track someone to the top position over people exponentially more qualified.
Regarding Machete Mary, I am sure she is going to get a nice bonus for cutting 15000 jobs.
You underestimate what can be done.
I worked in the hood for a good while as I worked my way through school.
My paperboy who was of color was a smart kid and got a scholarship to Harvard. How he stayed out of trouble and got good grades. He avoided the gangs and trouble even when it caused him trouble for doing do. He wanted out.
Much of the neighborhood was filled with Cambodia refugees who that showed up with nothing much than the clothing on their backs. Their strong family units and discipline got their kids to do well in school and most went on to collage and are now doctors and lawyers in the city here.
Often it comes down to just how bad you want something. If you are willing not to take the easy way out you make your own luck.
I myself came from humble means and today I am doing well. What makes me mad is I could have done even better if I had worked harder.
I’m a senior executive at my company with many years spent earning a degree and many hours invested to the development and growth of a successful business, and I make very good money that I am well pleased with and to see where I came from I have made quite a little accomplishment and “made” something of myself. But I don’t see where one given person’s time is worth millions more than another. NOBODY’S time is worth 295 more times than the next I believe. Could Mary fasten wheels on an assembly line all day? Could she keep the lights operating at the plant? No. She has employees with skills that know how to do this. Is their skill really 295 times less important? In my experience, the man who keeps our fleet running is the one person we can’t do without here, I make about 14% more than him……..he needs a raise because if he goes, we’re sunk! I can tell you from experience that a good skilled person with care for their work is way more important than me sitting here writing this in between authorizing this and signing that.
She only has to deal with tens of thousands of workers. Hundreds of unions, hundreds of countries, tens of thousands of government regulations, global material cost, hundred of thousands of investors, numerous competitors, dealing with her own family issues, OSHA, more suppliers than you can count the media and a number of other things that would give most a breakdown by the end of the week.
Her responsibilities often exceed 295 times of the guy bolting on the wheel.
Mary Barra only cares about Mary Barra. She us just a PR figurehead flashing that fake smile and hogging every photo op she can. I would be surprised if there was a week that she did not work over 50 hours a week. Dealing with unions, global operations, safety, media, etc are taken care of by the grunts further down the food chain. And if Barra is fired for her incompetence, she’ll get a nice 100 million golden parachute.
@ scott3: For all that, she has her underdogs checking that and reporting to her …
The bottom line it is her ass on the line. It is her place to coordinate , gather and make the calls.
The bottom line it is her ass on the line. It is her place to coordinate , gather and make the calls.
She has made the tough calls the past leaders failed to do and lead GM into failure.
It should not have taken bankruptcy to kill Saturn.
The bottom line is she does not give a cheap. The company does well, shell rob the coffers. Of it fails she gets a golden parachute.
There’s a lot more to building a car than the physical activity of building a car. Governments (Countries, State, local), regulations, unions, suppliers, etc… I wouldn’t want her job for the money.
Agreed, executives are still employees of the company. A successful doctor can make ten times your average worker, a top executive into the hundreds to a thousand times average worker wages? No different than having the keys to the bank and robbing it.
Mary Barra needs to go. Any new CEO should reverse the inane and inept decision to cease Cruze production.
I don’t know if you’ve been looking at car sales, but Accord, Civic, Camry, etc… sales are all diving. These are the leaders in the market. Now imagine the sales of the 2nd and 3rd tier players. Could GM keep building a vehicle less and less people are buying – sure. But the last time they did that and the auto market went south they went bankrupt. It’s better to sell one thing with a profit than 10 things with none.
How about the income of professional sports players and movie stars, etc.
Just look at what Russell Wilson just got.
Look at what LA is paying Lebron….
If they can get it more power to em so I will not hold it against anyone who can get it as long as no laws are broken and I am not directly paying for it.
That’s because people are stupid enough to spend big bucks for a ticket to watch or someone run with a ball in there hands.
At least these people entertain others. They are not destroying jobs or communities. In fact, many actually give back to the communities in which they play.
I’m sorry. Mary is head of a car company. She’s not curing cancer. Nobody is worth that much!
Yep, as my GM coworkers and I often say, We just make cars! We are not finding cures for disease or changing Western civilization here.
I mean no disrespect to the workers at GM. Even if Mary Barra is doing a great job, is ANYONE worth getting paid $10,576.92 an hour?
so far she is keeping GM alive and well and keeping thousands of workers employed. remember what happened to GM when the unions had the upper hand they went bankrupt. if all GM employees had bought a cruze the plant may have still been open. I toured the cruze plant and could not believe how many non GM cars were in the parking lots
Your first sentence can apply to all Fortune 500 companies. In fact I would venture to say that many are creating jobs not destroying them.
Interesting article, but somewhat confusing. The writer uses the term Average GM Employee in his headline, then uses the term median GM employee in the opening paragraph, then lists an Average GM employee’s salary. So, perhaps you should update the article and publish what the median salary is for a GM employee!! Bet that will be a VERY interesting number!!
That’s GM Authority’s “lead staff writer” for you.
So she is being paid about 21M too much for basically being a Wall Street pleaser. How quaint.
wall street is where the GM workers pensions are held so wall street better do well
This topic is a great stone for someone that has an ax to grind .
I will always contrast this with Lee Iacocca in the early 80’s who worked for $1 a year and just took stock for compensation instead. Try telling the thousands of GM employees who lost their jobs why it’s justified you make this much.
I would have no problem with 295x if it were tied to sales, margins and stock performance.
And a vision for future-GM that was well under way, enacted, instead of playing catch-up.
Like Romney’s dad @ AMC, took $250k salary as CEO, and made his money off stock performance. Or Bezos, whose salary was $88k in ‘18 – money comes from Amazon expansion (minus the divorce, but, well …). Or Steve Jobs’ $1 a year salary. Think he did ok…
Good on Mary if she makes a killing based on 21st century new GM. And it’s likely she works round the clock – plenty of stress from all sides.
Just rather see it tied to performance than salary and options.
How about Lee Iacocca in the early 80’s when he saved Chrysler and only took $1 a year and stock instead. If I recall he took it from under $4 to the mid 40’s by the late 80’s
I guarantee you Barra does not work around the clock and there are tens of thousands of gm employees that work more hours and harder than her.
Last CEO that was worth what he was being paid was Alan Mulally of Ford. Under his leadership Ford sailed through some tough times and came out on top. The test as to how good he was: after he left we got the likes of Mark Fields and now Jim Hackett. And Ford is kinda rudderless.
I wonder what GM would be like if he were to take over the helm…..
@ Sukhoi: It seems to me, that this “wonder-guy” just had luck. Maybe he let a monkey throw some darts on a disk where he wrote “buy”, “sell”, “hold” etc. and did what the monkey hit. I do not know even a single manager, who showed consistent performance over many years in his/her career. They just let the engineers and mechanics work and themselves they sit in a comfortable leather-armchair and earn more in a quarter of a year than some employees in their whole life. Warren Buffet said once: Do only buy stocks of companies, which can be lead as well by idiots, because the day will come where exactly this will happen …
Don’t know if Mulally had a monkey or not but I don’t seem to recall Ford declaring bankruptcy. Let’s see, weren’t there some car companies that declared bankruptcy? Refresh my memory please.
mulally sold or leveraged every thing ford owned to get money. that is why their stock is in the $10 range.
Alan too their truck and made them cost more to build and they now suffer lower profits per unit. The Aluminum cost have hurt profitability.
While GM used mixed combo of metals to lose weight and keep profits up with no loss of strength.
Boron steel is good stuff and if the continue to lower the cost of molded carbon fiber it will be the way forward.
Note Ford stock is only 1/4 what GM is.
Such salaries are absurd, perverse and just a shame for a country, where every seventh depends on food stamps. I have no problem, when an entrepreneur earns millions and millions because he/she founded his /her business and carried all related risks with that. But Mrs Barra isn’t an entrepreneur. She is just a top-ranked employee in the function of a CEO. Her risks are limited and when she fails with her management decisions – as many before her – and has to leave GM, she will get again some millions of “compensation” (golden parachute). These guys lost all kind of decency. All that has nothing to do any more with market economy, it’s just robber-knight capitalism.
How much a company pays it’s CEO vs its workers is irrelevant. Granted I think Barra is worthless. GM employs just over 100,000 people in the US, drop her salary to 0, congrats everyone gets $200 dollars. $200 a year for someone who makes $75,000 is chump change. They need to use that 22 million and find someone who can actually lead GM, not Blind Mary.
The average GM employee pay is misleading. Did you know GM has 40,000 plus hourly workers and about 50,000 salary workers in the US. That’s why the pay seems high.
I doubt Honda and Toyota have those ratios.
Ten years ago GM shut down four truck plants because people were not buying trucks. The CEO at the time Wagner said there is a permanent market shift to cars. If machete Mary was CEO then would she have gotten out of the truck business like she wants to get out of the car business now. If so what would GM sell bicycles.
When gas goes up again GM will sell cars again but they will be imported to the US. Just like they did with the Mexican made Blazer. By the way the Blazer was made at two of the plants that GM closed down 10 years ago.
obama’s bailout was to save the union jobs and votes as the salary people lost everything including pensions.
Salaried GM employees, retirees, and surviving spouses which had applicable pension plans in 2009 did not lose their pensions. In 2013 GM stopped contributing to pensions for those salaried employees still working that were on the plan, but they are still pension, or lump sum, eligible. Delphi employees who were ex GM salaried did lose allot of pension benefits during Delphi bankruptcy when the pension guarantee board took over, but Obama did have the ex GM Delphi hourly workers taken back in by GM in 2009 so their pensions were maintained
Update for us regarding Average versus Median earning of GM employee. From Reuters, 04/19/2019,8:00 am.
Barra’s total compensation package was valued at $21.87 million, slightly below the $21.96 million she received in 2017. Barra, GM’s chairman and chief executive, was paid $22.58 million in 2016. GM said Barra’s pay was 281 times that of the median company employee. Fairly large difference between 295 times the median employee pay in 2017 and 281 times that of the median company employee in 2018. Any data on the median salary for a GM employee??
And regarding compensation based on performance; Barra’s pay package included a salary of $2.1 million, unchanged from 2017; stock awards worth almost $11.1 million; options worth more than $3.4 million and a performance award worth almost $4.5 million, according to the proxy.