General Motors will soon implement changes to its bonus plan for salaried workers, adding new factors to its formula that determines the payouts its white-collar workers receive.
According to a report from the Detroit Free Press, GM will now factor in the performance of electric vehicles, software and services, along with autonomous vehicle programs when determining bonuses for its salaried workers. Previously, the formula was solely based on the automaker’s annual earnings before interest and taxes (EBIT) and free cash flow. Considering that GM has been struggling in areas related to EV, software, and driverless cars, and that its annual earnings are still mostly supported by the sale of internal combustion engine-powered vehicles, workers are concerned that their bonuses may shrink due to the new formula.
More specifically, 60 percent of the new bonus formula will be dependent on EBIT and free cash flow, while the remaining 40 percent will be determined by EV performance, software and services, as well as autonomous driving programs. A GM spokesperson said that the change was made to incentivize performance based on new business needs and to align more closely with the automaker’s goals.
It makes sense that GM would want to encourage better performance in the aforementioned areas. In October 2023, GM abandoned its goal of producing 400,000 EVs in North America by mid-2024, although it still aims to build 200,000 to 300,000 Ultium-based units this year and to have a fully electric lineup by 2035.
As for software quality, GM implemented a stop-sale order for a few of its vehicles over the past few months, including the 2024 Chevy Colorado and 2024 GMC Canyon, along with the Chevy Blazer EV due to software issues. Meanwhile, GM’s Cruise arm is under heavy scrutiny following an incident in which a pedestrian was struck and dragged by one of its self-driving vehicles.
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Comments
I’d be pissed if I worked at gm.
I’d be pissed if I was a stockholder!
Gotta love when almost half your bonus is tied to products that the buying public doesn’t want (or can’t afford)…
Be interesting to know if that formula applies to ALL bonus level salaried employees including senior execs. My experience was there were different bonus formulas depending the level (classification) you were in the company.
Why aren’t their bonuses tied to recall rates, customer satisfaction, and quality?
One thing for sure, Mary won’t be taking a cut.
The UAW workers get profit sharing checks, why shouldn’t management get bonuses?
They get much bigger bonus compare to uaw worker. A supervisor normally get double what worker get. The higher level get the bigger bonuses
Ford already does this.
You are incorrect. UAW get bigger bonus.
Bonuses to salaried is relatively new in the grand scheme of things.
Wait until people quit buying their cars when they only have GM infotainment software crap instead of Apple car play or Google. Mary Barra is going for the money grab. Next she’ll charge you a per mile charge for you to use your tires. GM is a sad company these days.