UAW wants limits on carmakers' executive pay

[Omaha Steve]

Source: Reuters

WASHINGTON (Reuters) - The Big Three U.S. automakers should tell Congress they will limit corporate pay, bonuses and severance packages in return for government loans, the president of the United Auto Workers union said on Sunday.

On CNN's "Late Edition," UAW President Ron Gettelfinger said carmakers only need a loan to tide them over a tough period and insisted high union wages were not the key cause of waning sales at General Motors Corp, Ford Motor Co and Chrysler LLC.

"They need to establish that executive compensation is something that they're willing to curtail, as well as bonuses and 'golden parachutes' on exiting the business," Gettelfinger said. "They can also give the government an equity stake in the business."

The automakers received a rough ride from lawmakers earlier in November after flying to Washington in corporate jets asking for help. House and Senate Democratic leaders, in a letter to GM, Ford and Chrysler executives, said the companies must submit a "credible restructuring plan" by December 2.

Read more: http://www.reuters.com/article/ousiv/idUSTRE4AT24M20081130

[lligrd]

1. I Second That nt

[LiberalEsto]

2. Third! nt

[Joe Bacon]

44. split the Directors 50/50 between Labor and Stockholders!

Capping executive pay isnt enough! Split the board of directors 50/50 between stockholders and labor!

[tbyg52]

3. Word. nt

[TheDebbieDee]

4. Screw executive pay limits! Put limits on their BONUSES!

Bonuses are how executives have been getting rewarded for screwing over Union Auto Workers Members in the past.

[TommyO]

18. Did you bother to read the first sentence?

Limiting bonuses was included.

[TheDebbieDee]

23. What are you? The reading gestapo or something?

Chill out, dude.

[TommyO]

32. Just pointing out the fact that you didn't bother to read before commenting

[Sarah Ibarruri]

36. Absolutely. I think all executives of corporations in the U.S. should limit or forego their bonuses

At least all those corps getting bailouts.

[aquart]

Yep.

[sasquatch]

5. K&R

:kick:

[ayeshahaqqiqa]

6. Executive pay tied to pay of the lowest paid worker

and no bonuses unless EVERYONE gets a bonus.

[DS1]

7. there should be limits on executives

[valerief]

24. Badda boom badda bing! You got that right! nt

[Amonester]

8. K&R

The executives also should have thought about the "green" cars long ago...

'cuz if they had, they wouldn't be in a begging-millionaires mode like they R now.

uh, wait! methinks they're all holding stocks in the big oil bidness of robbing everybody

[Waiting For Everyman]

9. K&R

We should tax the hell out of all excessive compensation to discourage it. And I'd include upper management in that. There's too big a gap between the top and the bottom, and it's from keeping the bottom artificially low - that's what's killing us - too many don't have enough to spend in the economy.

[Hawkeye-X]

10. Executive pay should be NO MORE than 10% of the maximum UAW pay.

And their stocks are off-limits until the Big Three shows a profit and incentive to build HYBRID/ELECTRIC cars.

Hawkeye-X

[LiberalFighter]

16. When they are offered stock options it should be required

that options are bought within 12 months and at the price the day they take the options.

[lelgt60]

11. The problem with the automakers isn't executive pay...it's the executives

I don't want ANY loan guarantees unless the entire boards and entire top tier of executives resign. We need to put in people who have a different ethic: treat everyone who is necessary to make a successful business fairly,and with respect - investors, employees, customers. The existing group has failed all three and has proven they have no ability to lead properly.

I just don't understand why this demand isn't #1. Without changing the top layer of management we probably won't be saving anybody's jobs.

Oh...and obviously, no person is worth more than 100 times monetarily what any other person is worth, so, after replacing management, yes - cap total compensation at somewhere between 10 and 100 times the lowest paid full-time worker's total compensation.

[Bette Noir]

17. Hear, hear.

If the execs were any good, the companies wouldn't be in the fix they're in now. It's no one's fault but the execs, that the American car industry abandoned the economy car segment to Japanese manufacturers. No, the American automakers preferred to make big, expensive cars that cost hundreds of dollars to gas up during the gas price spike a few months ago.

A smart industry would have done as much to court the vast market for affordable cars, as well as the testosterone-challenged big-car buyers.

[NJCher]

49. yeah but these assholes have been out of it for 30 years!

Want to know how I know? Because I used to work in the industry. I was the first female executive ever hired by any of the big three back in the mid-seventies. I sought the job simply because I wanted to figure out what the hell their problem was. Why couldn't they build a decent car?!?

I could write a book about my experiences in that industry.

When all is said and done, however, the bottom line is that their problem is group think. That and the fact that it's not an industry that values intelligence. They're more into "testosterone."

You really hit on the problem with the last line of your post:

A smart industry would have done as much to court the vast market for affordable cars, as well as the testosterone-challenged big-car buyers.




Cher

[JDPriestly]

42. Good point. After all, the executives of Toyota and Honda

are able to make cars that can compete. I'm sure we can find more capable leadership right here in our own country.

[sandyj999]

12. Without A Doubt this is what needs to take place.

At least the loan wouldn't be quite so hard to take. No one needs as much money as they are paid. And no one is worth it in my opinion.

[LiberalFighter]

13. During normal times there should also be limits on executive pay.

Bob Selden at Management Issues has this: Link

Any good pay scheme should have four components:

1. Base salary. Needs to be in line with industry standards, appropriate to the role and to be seen as "fair and equitable" both within and external to the organisation.

This should be the major component of the package. For CEOs, it would be limited to 20 times the rate of the lowest paid worker within the organisation.

2. Share of company profits. Needs to be calculated on net profit prior to distribution to shareholders.

This should be the second highest component of the salary package for CEOs and senior executives. Once again, it would be limited to 20 times the share of profit received by the lowest paid worker (Yes, that's right, everyone should share in the profits). Profit share would be approved by shareholders through their reps, the Board.

3. Team performance rewards. Based on a pre-determined set of criteria and relative to the top team's performance.

This should be the third ranked level of salary package component. Limited to 20 times the bonus reward for the lowest paid organisational team performance. Up to a maximum of 20% of average individual profit share (as in point 2).

4. Individual performance reward. Based on the achievement of pre-set goals.

This should be the least component of salary package. Limited to 20% of base salary.

What gets rewarded, gets done. This approach to remuneration, rewards; teamwork, a sense of community, a drive for performance, and above all a sense of "we are in this together" – all stakeholders working for the betterment (and rewards) of the organisation.



I first saw this when Du'er Ichingcarpenter posted it Nov 21, 2008.

[AlbertCat]

22. Didn't there used to be laws...

....before the 1920's limiting exec pay AND even the amount of profit a company could make....and a limit on how big a company could get before it was broken up?

Wasn't the repealing of those types of laws a factor in the Roaring 20's and then of course the Great Depression?

My history on this is way fuzzy.....

[LiberalFighter]

29. I am not aware of any such laws. BUT...

there were laws against certain types of mergers that eliminated competition.

[AZ Criminal JD]

31. Your history certainly is fuzzy.

There were no such laws.

[bemildred]

14. Better yet, just get rid of them.

Elect a leader once a year. Workplace democracy, an idea whose time has come.

[defendandprotect]

20. Even a more STERLING idea --!!

[SammyWinstonJack]

62. !!

:thumbsup:

[liberal N proud]

15. I do as well.

There is no reason for those bastards to sit there and do nothing drawings that kind of pay while the ones necessary for production pay the price.

They should only get paid if the company makes a profit.

[JDPriestly]

45. The executives that appeared before Congress did not seem to

have a clue. I was shocked that they had no numbers, no facts, nothing. No lawyer would ever appear before a judge so unprepared. On second thought, I saw a lawyer do that. He was royally sanctioned -- ordered to pay a big penalty for his unprofessional behavior.

You just do not appear before Congress without preparation, especially not if you are there to ask for money.

[defendandprotect]

19. Now there is a STERLING idea -- Pres of Toyota makes less than $1-mill ...

RESULT ... better cars --

[valerief]

25. How in heavens name does the Toyota prez get by on just 1 mil a year?

Why, that doesn't even pay for a personal luxury jet!

:sarcasm:

[harun]

57. He doesn't have to spend as much on maintenance of his vehicles

(sorry had to say it, couldn't hold back)

[valerief]

58. That's why I buy Toyotas!!! nt

[Acadia Blue]

21. No F.........G executive or CEO should make more that the president

of the USA in total compensation. Let the pigs save and invest and make money in the market they so love.
These pigs are what are destroying the middle class. All the money is flowing up.

[valerief]

26. I don't think anyone in Congress or the Exec branch or Justice should be given

health insurance either. Let 'em pay for it themselves like Americans have to.

[lelgt60]

27. Watch it...you'll might end up getting the prez's pay raised

Of course if he does a good job, maybe he should get a bonus. Only trouble is, who'd decide?

[valerief]

30. Raise the damn pay and give us all universal health insurance.

It's not like the prez gets double-digit millions in salary a year the way the dysfunctional corporate CEOs do.

[SammyWinstonJack]

63. !!

:applause:

[WoodyM]

28. Why are these same demands

not being made of the financial institutions that the government (us taxpayers) are bailing out. Did they not make bad decisions and go for the profit now as the auto industry is being accused of?

[JDPriestly]

46. Because Paulson and Obama and Pelosi rushed the Paulson

bail-out through Congress without much thought.

[kleec]

33. Now

finally someone talking sense! Yes.

[unkachuck]

34. how about a big, fat, K&R....n/t

[W_HAMILTON]

35. Executive pay should be a set percentage above average worker pay.

Then we'll see if those assholes are so cost-cutting happy.

Also, if the idiots run a company into the ground, they should NOT be allowed to have any sort of severance pay or "golden parachutes," unless the average worker gets the same sort of bonuses. Why do we reward failure?

As I've said time and time again, you don't have to go to college to cut workers. You don't have to work for decades to cut costs. Anyone can do that. At some point, there are only so many costs you can cut, and it comes down to whether or not you are innovative enough to bring in sales revenue, rather than simply cutting costs. That's why so many of these executives are failures today. They don't really know how to run successful businesses. And when they fail, they take it out on the little guy by cutting their hours and laying them off, and when even that doesn't work, these idiotic executives get rewarded by huge bonuses to leave the company they just about bankrupted.

It angers me.

[ColbertWatcher]

37. well said. n/t

[meowomon]

52. I am angry too

Instead of making innovative new cars that use less energy and new technology, they put all their profits in their own pocket and the pockets of the shareholders. The workers got diddly and America got gas guzzling, energy wasting behemoths that no body other than farmers or other manual labor workers need to own. Jerks driving around in their shiny new Dodge Rams or Hummers without having to haul anything other than their fat lazy redneck asses around are a disgrace to this planet.

[amandabeech]

66. Ford and even Chevrolet are trying to change, actually.

Ford is selling full hybrid Ford Escape and Mercury Mariner hybrids. Many people in the U.S. LOVE SUVs, so Ford is giving them small ones that get great gas mileage. The Mazda Tribute is essentially the same vehicle.

Ford will also offer a full hybrid version of its Fusion mid-size sedan. The line is supposed to start up this month and the cars are supposed to be in the dealer show rooms in January.

In addition, Ford plans to bring its European small cars here. That's what they're going to use their share of the "re-tooling $25 loan" for. The re-tooling program is part of the 2007 energy bill.

GM has a number of partial hybrid vehicles (like the Honda hybrid) here, and will bring out the Volt in 2010. The Volt's wheels will be turned by electric motors, and the "engine" is really an electrical generator that could be tweaked to run on just about any liquid fuel, like straight cellulosic ethanol when that becomes available, and it is pluggable. The Volt is totally different from anything on the road today, and it may be the wave of the future.

The 2007 UAW contract with each of the Big 3 included many, many concessions, including setting up a trust, funded by each of the Big 3, and administered by the UAW to pay out ALL retiree health benefits after 2010. That means that the Big 3 will have no further liability after 2010

The UAW has agreed to consider additional cuts in order to keep the Big 3 alive.

I appreciate your comments, and several years ago, I would have agreed.

But I see real progress here, and I'm not ready to throw in the towel and let them go down when they seem to be doing what they needed to.

Their backs are against the wall, and I think that they have heard
the "Change" message loud and clear.

[LiberalFighter]

54. Failure rewarded....

One thing for sure. There has never been a factory worker, store clerk, office worker or other non administrative job that was rewarded because they were a failure at their job. At least beyond their regular wages.

[ColbertWatcher]

38. The only ones who want the CEOs pay to stay the same are the CEOs.

There are more of us who want their pay to be reasonable than there are CEOs.

Thank you for posting this.

Kick and rec.

[harmonicon]

39. Fuck, yeah!!!

UAW worker rule!!! The best workers in the world. However, BIg 3 management is about the worst in the world. I (or you) could do a better job.

[JDPriestly]

40. It's about time.

If corporations have so much money that they can afford to pay their executives astronomical salaries and bonuses and stock options, they should first pay a bigger share of taxes.

By proportionately imposing taxes on companies to correspond to the amounts they pay their executives, we could solve a lot of problems. If the corporations are making enough money to pay these salaries to their executives, they should increase shareholder dividends across the board, reinvest and hire more people and pay higher taxes. Executive salaries are obscene. And, if pay raises for ordinary working people are inflationary, so are pay raises for executives.

[Robeson]

41. Works for me.

[KakistocracyHater]

43. I'll say it again, the pay of those at the top

by law should be anchored to the pay at the bottom/average, this would give the execs strong incentives to pursue success & a livable wage for the workers. It can & should be a flexible but permanent tie, 30% to 40%-at most-more than the average worker's salary.

Also, I still strongly suggest getting rid of all ceo positions in corporations & cfo too; let the board decide the direction of the car co.s

[ItNerd4life]

64. I agree with tying executive pay to lowest paid worker

but 30-40% is too low. I have no problem with 100%. Right now it averages 480%, which is outrageous.

But you can't get rid of CEO, COO, CFO, etc. they are needed legally.

[KakistocracyHater]

65. I want a law passed that makes them outmoded

Did you see what Toyota's ceo pay was compared to the Detroit?

...."In a reflection of Toyota’s team-oriented approach, its executive pay is paltry by U.S. standards. Analyst Ron Tadross at Banc of America Securities estimates the total annual compensation of Toyota’s CEO at under $1 million - about as much as a vice president at GM or Ford Motor Co. makes in a good year."... from here http://management.curiouscatblog.net/2006/09/28/excessive-ceo-pay/

[cstanleytech]

47. I'm all for those limits but I also

think the UAW needs to step up to the plate as well and be willing to take a cut as well, if not then I say let the companies fold.
Yes, I know its harsh but long term if both sides are not willing to make hard concessions then any bailout wont work in the long term and it would just be throwing more good money after bad to try and save them.

[russspeakeasy]

48. How much does the president of the uaw take??

Getfingered reports 50% of his income...the other 50%.??????

[Omaha Steve]

53. My local president gets the highest negotiated wage in our contract plus 10%

I have no argument with that. About AFSCME's McEntee, I have no idea.

http://www.afscme.org/about/740.cfm

Before assuming the presidency of AFSCME, McEntee began his distinguished career as a labor leader in Pennsylvania in 1958. He led the drive to unionize more than 75,000 Pennsylvania public service employees, which at that time was the largest union mobilization in history. He was elected Executive Director at the founding convention of AFSCME Council 13 in Pennsylvania in 1973 and an International Vice President of AFSCME in 1974.

McEntee holds a bachelor’s degree in economics from LaSalle University in Philadelphia. A native of Philadelphia, McEntee and his wife Barbara live in Washington, DC.

[LiberalFighter]

55. Under Barack Obama he will be paying less taxes.

And the UAW president does not take it. The UAW's constitution dictates the wages the officers receive for their job. And the UAW's constitution is voted on at a convention every 4 years when changes are made to it. The Constitutional Convention consists of delegates from every local across the country based on their membership.

[rhett o rick]

50. Sounds good but I think it is way too late. Unions are essentially dead in this country. With the

loss of so many manufacturing jobs to overseas, there is a glut of labor on the market. This will kill the remaining unions. The remaining manufacturers will not pay union wages. I don't think there is a way to make them. The automakers are a good example. They will go bankrupt before they continue paying decent wages. I wish someone that knows economics would explain to me a possible way of turning this around, I don't see any.

[cstanleytech]

51. Well what would you consider a "decent wage"?

Also how would you resolve the cost of living differences there are from state to state?

[rhett o rick]

60. Well I remember the '50 and '60 where a decent wage for 40 hours of work

for one family member would provide a decent standard of living and in some cases enough to send the children to college.

[cstanleytech]

67. And how exactly do we go about forcing companies to pay a wage like that?

[rhett o rick]

68. We can't, that's the point of my post. nm

[LiberalFighter]

56. Unions don't just represent manufactural workers.

[rhett o rick]

59. Yes I totally agree. I was a union member for close to 40 years and I wasn't a direct manufacturing

worker. But if it wasn't for manufacturing, I wouldn't have had a job. We can not survive without industry. Manufacturing workers have no leverage anymore. The auto makers will go bankrupt and cut workers wages. They already have cut them a lot via the two tier pay system. The older workers are selling out the younger workers, but it comes back to bite them. The new contracts give the older workers decent wages but cut drastically the pay for the new younger workers. Then the company starts getting rid of the older workers with the higher pay in favor of the younger workers with lower pay. This is happening at Boeing as I write.

[Naipes]

61. It's not just about the auto industry, it's about jobs and the economy

If the big 3 fail the effect on the economy will be far more devastating than anyone can imagine. It isn't just about the people that make automobiles. It's also about the people that make tires, rubber hoses, computer chips, valves, plastic knobs, carpet and a ton of other things that go into making an automobile. The people that make those items do not work for the big 3 per se, but they too will lose their jobs if the big 3 go under. If you think the economy is in the toilet now, just watch what happens if the big 3 tank.

25 billion is chump-change (3.5%) compared to the 700 billion already given to the financial sector. Economically, the ramifications of failure are far more reaching than people think. So when people say, "they should just be allowed to fail." Be careful of what you wish for...

That being said, the big 3 need to get-it-together and build a product people want to buy. Each CEO should take a page from the Lee Iacocca playbook and work for $1 a year until their company turns around. They can afford it.