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GM Holden execs set to take a pay cut

By George Skentzos |

One of the more controversial types of behaviour to come out of the global financial slump has been corporate executives treating themselves to healthy bonuses and pay rises while employees lose their jobs.

At GM Holden however it is certainly a different story, with several executives, including chairman and managing director Mark Reuss, poised to take a pay cut as the car maker continues to grapple with the global economic downturn.

GM Holden has confirmed these cuts would take effect from May 1 and included a 10 per cent reduction for all executives and a seven per cent reduction for all senior staff.

Executives won’t be reimbursed through other means either, with GM Holden also announcing there would be no bonus payments made to executives this year.

“This is a critical time for our company and the automotive industry,” GM Holden spokesman Scott Whiffin said. “We are grappling with some of the worst market conditions in living memory. To survive in this environment we need to make some rapid changes to cut costs and today we’ve announced a number of decisions concerning executive and senior manager salary arrangements.”

Unfortunately this does not translate to job security for the remainder of Holden’s workforce, with expected job losses in the near future following an announcement by parent company GM to reduce its global workforce by 47,000.

“As a managing director it’s a situation that keeps you awake at night,” Mr Reuss told the National Fleet Conference in Melbourne. “I wish we could carry the entire workforce through this period, but unfortunately these decisions will be necessary for our industry to overcome difficult times and be successful in the future.”

The final decisions on Holden’s structure and operations would be made in the following weeks, with the company still implementing a second car line at its assembly operations in Adelaide to build a new, fuel-efficient, four-cylinder model.

Source: News.com.au


 
  • Lukaas

    Considering that the senior upper management and executives who’s over estimation of the market lead to GM ultimately becomming bankrupt, its only fitting they take a pay cut.

    But just a comparo to Japanese/Korean executives, which have “cap” and linear payment (apparently). U.S car manufacturer executives earn “million dollar” bonuses on successful project… successful in terms of what.. I am not sure. Japanese executives do not get money bonuses as big as that of U.S companies, they get paid linearly per experience… however execs for japanese companies in the U.S however have competitive bonuses… whether its money or company shares Im not sure of…

    Just to show the capitalism of U.S culture/industry… which is fair enough.

  • JEKYL & HYDE

    what’s next folks,

    are all the wanker banker types going to follow suit,i doubt it…

  • pious

    yep, 10% off that part of your salary which is being taxed at the top marginal rate, so really a 5 – 6% reduction in the hand. It’s a start, but if (for example) the salary is $200K pa, the net reduction is $11K p.a. or so. If they were owners of a business sharing profits, they’d be down 50% at least. Big whoop. And give the numbers to the poor b’s that have been retrenched and are about to be retrenched with virtually zero job prospects, and see if they feel the pain for the execs. I am not a blue collar boy by any means, but this is almost an insult

  • Frenchie

    I think you find that Mark’s salary is around millon dollar mark plus incentives.

  • Richo

    What your all missing is that they aren’t being paid bonuses and incentives, for senior execs this usually makes up as much as 50% of their total income, as such this will be quite a significant hit for some of those guys.

    When everyone talks about how outrageous it is that senior execs get paid bonuses etc, here is a company that is responding to public demands yet some of you still find reason to criticise, you are such miserable cynical people! Seriously…

  • pious

    Good point, though it is possible (I wont say likely) that the bonuses etc arent paid to the executive, they are paid to other entities (eg for the provision of services etc) and the very careful wording of “there would be no bonus payments made to executives this year” leaves the door open for many other incentive payments or other forms of consideration to be conveyed, without necessarily getting into the type of inflammatory payment that we had with the Bonds company. That said, if the truth of it is that someone who gets $400K pa comprising a salary of $250K and bonuses/incentives of $150K, will this year get no incentives and thier salary reduced to $225K gross, then they will suffer, because most likely their lifestyle and committments will be geared to the $400K expectation, and I would genuinely feel sorry for them for that.

  • Dan

    Financials still have to disclose total remuneration paid to the directors, no matter in what shape or form.

  • Andrew M

    pious,
    I think you are splitting hairs and will never be happy.

    Perhaps it is or isnt enough of a cut, but thats beside the point. at least a motion has been started where the execs are gonna feel it in the pocket too.

  • pious

    No, its not a matter of splitting hairs or not being happy. As I said, I would feel genuinely sorry for these people if there was a major impact on their salary. Initially, I hadnt taken into account the loss of bonuses, and to that extent my first comment was misdirected. I dont necessarily know (and it really isnt any of my business) whether “bonus” means all incentives or just a small part of them. I suppose that what rankled me was that this is PR being pitched as though these guys are copping it in the tail for the good of the team (many of whom will soon lose their jobs), when the detail might prove otherwise (but then again might not). I probably am absolutely uninformed and should now shut up, which I will!

  • Frenchie

    It could be worst, Mark Reuss could say “To hard, going home” or “Sorry got a better offer elsewhere” like some evecutives. I think he a genuine deal and he the type of person that doesn’t like to leave things undone.

  • Cupid Stunt

    “We are grappling with some of the worst market conditions in living memory”. From the article, The markets only fallen significantly since september when the drop in sales was about 20%, is it REALLY that bad.

    I do not know what the problem is with pay cuts and bonuses. Blue collar workers are already to accept pay cuts thro’ mismanagment in order to keep there jobs. As the article says they will not get a bonus. Usually poor performance reflects on the amount you’ll get paid. I generally get a 7% bonus BUT its discretionary and I do not rely on it for my lifestyle, after all its a bonus!!! The give away is in the title.

  • http://k.s.a dhafer

    I want to get to cut Gearlsearti