It was the year of big money for top executives in the auto industry —Corp. top brass got millions of dollars from the automaker's sale to Daimler-Benz AG, and Motor Co.'s retiring chairman Alex Trotman took home $69 million — and the trend didn't miss Corp.
In a turbulent year marked by labor strife, a substantial drop in company earnings and numerous moves aimed at making the world's largest automaker more efficient, GM Chairman John F. Smith Jr.'s total 1998 compensation was $8.7 million, according to the company's annual proxy statement. That is up 21.4% from the $7.1 million he earned in 1997. Mr. Smith, who gave up his presidency in 1998, also received a boost in his base salary to $1.9 million from $1.7 million in 1997.
However, Mr. Smith's bonus declined to $1.08 million from $2.4 million. The board of directors in the proxy statement call Mr. Smith's 1998 performance “outstanding” but says it “consented to management's recommendation” that 1998 bonuses be reduced due to a plunge in net income from $6.3 billion in 1997 to $3 billion last year. Bonuses for Vice Chairman Harry J. Pearce, President and Chief Operating Officer G. Richard Wagoner Jr. and executive vice presidents J.T. Battenburg III and Louis R. Hughes were cut more than half from 1997.
Mr. Pearce was compensated $3.5 million in 1998. His base salary increased from $950,000 in 1997 to $1,163,000. Mr. Wagoner, who became president and chief operating officer after several years heading GM's North American Operations, made $2.5 million in 1998 — a small increase from his 1997 compensation. Mr. Battenberg took home $3.9 million in 1998 up from $3.2 million. Only Mr. Hughes, who was reassigned from president of International Operations to New Business Strategies, saw his overall pay dip, from $3.8 million in 1997 to $3.6 million in '98.