DETROIT (AP) – The man who has been General Motors Corp.’s CEO for more than eight years received a pay package last year worth $14.9 million despite a $30.9 billion annual loss, a share price below $2 and a balance sheet propped up by government loans.

But don’t get too angry just yet. Roughly $11.9 million of Chairman and CEO Rick Wagoner’s compensation was in stock and options that have plummeted in value to $682,000.

GM, which has lost $82 billion over the last three years, disclosed the figures in its annual report filed Thursday with the Securities and Exchange Commission.

The report also said GM’s auditors have serious doubts about the company’s ability to keep operating, and it may have to seek bankruptcy protection if it can’t execute its turnaround plan.

Wagoner’s total compensation last year was 5.5 percent less than his $15.7 million package in 2007.

He received no cash incentive compensation last year, but his salary increased 35 percent from $1.6 million in 2007 because it was restored to its level before 2006, when he agreed to reduce his salary for two years as part of the company’s restructuring efforts.

This year, Wagoner agreed to accept a salary of $1 as part of GM’s request for government help. The Detroit-based company has received $13.4 billion in federal loans and is seeking up to $30 billion as it tries to weather the worst auto sales downturn in 27 years.

Wagoner, 55, received $2.1 million in salary last year, $836,000 in other compensation, and stock and options that GM valued at $11.9 million when they were granted in March 2008.

But 1 million options that had been valued at more than $7.1 million are now worthless because GM shares are trading well below the $23.13 price at which Wagoner could buy the shares. Other shares granted as part of long-term incentive programs also lost most of their value.

GM’s stock price, which plunged 87 percent in 2008 from its level of $24.89 at the end of 2007, fell 34 cents, or 15.5 percent, to $1.86 Thursday.

An additional 4.7 million options that Wagoner received in earlier years also are worthless unless GM’s stock price rises above the exercise price before the options expire. Hundreds of thousands of Wagoner’s options, with exercise prices as high as $75.50, are set to expire each year through 2018.

Wagoner’s compensation is fair because he received nothing based on his performance, said James E. Schrager, clinical professor of entrepreneurship and strategy at the University of Chicago Graduate School of Business.

Schrager, a Wagoner critic who says the CEO moved to slowly to shed unprofitable brands, restructure debt and cut labor costs, said Wagoner’s $2.1 million cash salary is reasonable considering the size and complexity of GM.

“I’ve never had a beef with what he’s made,” Schrager said. “But I have major concern about his failure or success at the company. Is he the right guy to run GM at this time?”

David Cole, chairman of the Center for Automotive Research in Ann Arbor, noted that Wagoner is the CEO, but he now has another boss: the government.

“If they don’t think it’s a smart thing to do, he won’t do it,” Cole said.

Wagoner’s other compensation included $160,000 for personal use of corporate aircraft, $270,000 for personal security, $11,500 for use of company vehicles, and $12,000 for financial and estate planning.

Use of the aircraft drew the ire of many in Congress late last year when Wagoner and his counterparts at Chrysler LLC and Ford Motor Co. flew to Washington on separate corporate jets to seek government loans. When GM signed its government loan agreement Dec. 31, it agreed to get rid of the private aircraft that it had been leasing.

Wagoner, Chief Operating Officer Fritz Henderson and Chief Financial Officer Ray Young now fly first-class on commercial airlines. Other senior leadership executives fly business class for international travel and coach for domestic flights, GM said in its annual report.

The Associated Press calculations of total pay include executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.



Associated Press Writer Ken Thomas in Washington, D.C., and AP Auto Writer Kimberly S. Johnson in Detroit contributed to this report.

AP-ES-03-05-09 1807EST


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