It's difficult to imagine a more poorly run corporation than General Motors these days. The company reported a $2.5 billion loss in the third quarter and warned that it could run out of cash in 2009. GM's share price is down 78 percent this year.
A lot of people at GM are feeling a lot of pain these days. GM has been shedding jobs left and right and announced it will lay off 3,600 workers beginning early next year.
One person who is not feeling the pain, though, is GM Chief Executive Rick Wagoner.
This year, Wagoner will pull down a salary of $2.2 million, in addition to other CEO perks. And last year, Wagoner's total compensation was $14.4 million. That works out to $39,452.05 per day, including weekends. (Note that in 2007, GM lost a staggering $38.7 billion).
And now, Wagoner has the gall to push for a government bailout for his company. In other words, Wagoner is a firm believer in the "capitalist" system when it comes to defending his obscene pay. But he apparently has no qualms about asking for billions of our tax dollars to help fix his sinking company.
Perhaps the most troubling aspect of all this is that GM's woes are entirely self-inflicted and the result of poor management over the years. While Toyota was perfecting hybrid technology for its now wildly popular Prius, GM was betting the farm on clunky gas-guzzling SUVs. Now that the latter are out of favor, thanks to sky-high gas prices, GM is on the ropes, because it was too short-sighted and stupid to have a "Plan B."
Actually, I guess GM does have a Plan B---stick out its hand and beg for the government to give it billions of our tax dollars.
So in the end, all of us will wind up paying for this fiasco. GM's workers, who're being laid off by the thousands will suffer the brunt of the pain. We taxpayers will also likely suffer. In fact, just about everyone is going to suffer, in the end. That is, except for the people directly responsible for GM's mess: the over-paid GM executives like Wagoner whose short-sightedness and poor decisions led to the fiasco at GM in the first place.
What's even more astonishing about this story is that Wagoner's fat paychecks dwarf the pay of Toyota's executives (who have traditionally earned only a small fraction of what their Detroit CEO counterparts earn).
Although Japanese CEO pay is not publicly disclosed, it is estimated to be only a fraction of what U.S. automaker CEOs make. For example, the estimated pay of Toyota's CEO in 2005 was under $1 million.
In fact, in recent years, U.S. CEOs have made vastly more than what their counterparts make in other nations. For example, in 2005, a typical Japanese executive made 11 times what a typical Japanese worker earned. In the U.S., the average CEO pulled down a staggering 475 times what the typical American worker earned.