General Motors Chair and CEO Mary Barra got a raise and remains the highest paid CEO of the Detroit Three automakers.
In fact, all of GM’s top officers saw big increases in compensation last year.
But the median pay for all GM employees declined in 2021 compared with 2020, largely due to parts shortages disrupting production and resulting in some workers losing hours or being temporarily laid off.
In its annual executive compensation report that GM filed to the U.S. Securities and Exchange Commission on Friday, GM reported that Barra made a total compensation of $29,136,780 in 2021 for running the company and chairing the board of directors. For 2020, Barra took home $23.7 million in total compensation and $21.6 million in 2019
GM listed its global workforce as 157,000, of which, 98,000 employees are in the U.S.
Chips shortage impact
Public companies are required to disclose compensation figures as part of the 2010 Dodd-Frank Act.
In the filing, GM lists Barra’s 2021 base salary as $2.1 million, up from $1,995,000 in 2020.
This is the third consecutive year Barra topped her crosstown rivals at Ford Motor Co. and Stellantis.
Last month, Ford Motor Co. filed documents that showed its CEO Jim Farley received total compensation of $22.8 million in 2021 for running the company. Stellantis CEO Carlos Tavares made $21 million in 2021.
Meanwhile, the ratio of Barra’s total compensation to the median of all GM employees’ total compensation is 420 to 1.
The median pay for GM’s global employees in 2021 was $69,433, according to GM. In 2020, GM reported the figure as $71,682. Neither includes the compensation of a fully vested pension, said GM spokesman David Caldwell.
Caldwell said the reason that the median employee salary was lower in 2021 compared with 2020 is because more plant employees had downtime due to a variety of reasons, including the global shortage of semiconductor chip parts, which continues to disrupt new car production.
Median employee pay can include salary or hourly wage, bonus, company contributions to 401(k), overtime and profit sharing. The amount does not include health care and other benefits.
Top leaders pay
Barra’s 2021 compensation broke down as follows:
- $2.1 million in salary
- $14.6 million in stock awards
- $4 million in option awards
- Nearly $7.6 million in incentive plan compensation
- $873,075 in other payments
Beyond the lucrative salary, GM also spent $413,368 last year for personal travel, security, company vehicle programs, executive physical and financial counseling for Barra.
GM has said 90% of Barra’s and other executives’ compensation is “at risk,” meaning it depends on GM’s financial performance and meeting other goals and objectives.
In GM’s filing, it also listed the 2021 total compensation of other key GM officers:
- President Mark Reuss: $12,535,747, up from $9,963,402 in 2020.
- CFO Paul Jacobson: $9,578,648, up from $5,179,672 for 2020.
- President of North America Steve Carlisle: $8,980,204, up from $6,289,463 in 2020.
- Executive Vice President of Global Product Development, Purchasing and Supply Chain Doug Parks: $8,835,477, up from $6,733,708.
EVs tied to pay
GM lists total executive compensation as including salary and “short-term incentive plan” targets. Those include: discretionary bonus, stock and option awards, non-equity incentive plan compensation (which is performance-based bonus), pension value, and other compensation, such as air travel, company vehicle programs, security, financial counseling, executive physicals, and employer contributions to savings plans such as a 401(k) match and life insurance.
Earlier in the week when GM announced its first-quarter earnings results, Barra told investors that GM would now tie executive compensation to its EV targets.
“By announcing this change to the compensation package, the GM Board is essentially signaling to the market that GM is seriously committed to the shift to EVs,” said Steve Melnyk, a business professor at Michigan State University in East Lansing.
It also appeases socially conscious investors, said Morningstar Auto Analyst David Whiston.
“The compensation change is another way to signal how serious GM is to its commitment of an all-zero emissions vehicle future in light vehicles by 2035,” Whiston wrote in an email to the Detroit Free Press. “It’s the type of thing that (socially conscious) investors will like to see and it helps GM avoid a criticism of someone pointing out what some would otherwise see as an inconsistency between words and compensation.”
The EV targets will be part of GM’s Long Term Incentive Plan which provides bonus compensation to executives. Business performance targets comprise 75% of plan and stock options make up the other 25%, said GM spokesman Caldwell.
“The new EV targets are within the business performance category,” Caldwell said.
Within that 75%, the EV targets will account for about 15%, he said.