The government's pay czar is taking a close look at the compensation packages of some executives at General Motors Co., according to a new report.
Employees with Promark Global Advisors, a GM unit that manages the company's pension money, earn up to $3 million a year, the New York Times reported. Although their earnings fail to come close to those working for stand-alone investment banks, Kenneth M. Feinberg, the special master overseeing executive pay among bailed-out companies, has said he will insist that bonuses be commensurate with value and industry practice.
"The pay czar will look at these financial people inside G.M. very similar to the people at the banks," Alan M. Levine, a partner in the executive compensation and employment benefit practice at the law firm Morrison Cohen, told the paper. "But he's got to understand that the company needs to remain competitive and retain talent."
General Motors is due to file a report with the Treasury Department today detailing its compensation policies for its top executives, as are other leading recipients of bailout funding.
According to sources within General Motors, the Promark employees facing review are among the company's top 25 earners, and have done well in comparison to other GM executives who rely heavily on stock options and other stock-based pay.
Promark says its executives are compensated on the basis of individual performance and the returns on the investments the unit manages.
This type of compensation package may make it difficult for Feinberg to unwind the contracts. Experts told the Times that Promark may be able to argue that its executives are the equivalent of proprietary traders at banks. Such employees are exempt from Treasury compensation oversight so long as they earn their salary by commission and manage money for clients.
Employees with Promark Global Advisors, a GM unit that manages the company's pension money, earn up to $3 million a year, the New York Times reported. Although their earnings fail to come close to those working for stand-alone investment banks, Kenneth M. Feinberg, the special master overseeing executive pay among bailed-out companies, has said he will insist that bonuses be commensurate with value and industry practice.
"The pay czar will look at these financial people inside G.M. very similar to the people at the banks," Alan M. Levine, a partner in the executive compensation and employment benefit practice at the law firm Morrison Cohen, told the paper. "But he's got to understand that the company needs to remain competitive and retain talent."
General Motors is due to file a report with the Treasury Department today detailing its compensation policies for its top executives, as are other leading recipients of bailout funding.
According to sources within General Motors, the Promark employees facing review are among the company's top 25 earners, and have done well in comparison to other GM executives who rely heavily on stock options and other stock-based pay.
Promark says its executives are compensated on the basis of individual performance and the returns on the investments the unit manages.
This type of compensation package may make it difficult for Feinberg to unwind the contracts. Experts told the Times that Promark may be able to argue that its executives are the equivalent of proprietary traders at banks. Such employees are exempt from Treasury compensation oversight so long as they earn their salary by commission and manage money for clients.
published August 14, 2009, 0 Comments
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