Ontario Minister Defends Lack of Transparency on Auto Industry Executive Salaries

Strategic Insights -

Ontario's industry minister, Sandra Pupatello, is defending the lack of transparency on executive salaries in the auto industry, citing concerns that public disclosure could scare off top executives. Pupatello stated that while taxpayers have invested over $14 billion to save General Motors and Chrysler, the government has strong directors on the boards of the two companies and knows the details of executive pay. However, despite the terms of the loan agreements requiring disclosure of executive compensation above certain limits, the companies have refused to reveal the details, including benefits and perks.

Key Takeaways:

  • Ontario's industry minister, Sandra Pupatello, believes that public disclosure of executive salaries in the auto industry could scare off top executives.
  • Despite taxpayers investing over $14 billion to save General Motors and Chrysler, the companies have refused to reveal details of executive compensation, including benefits and perks.
  • The government has strong directors on the boards of the two companies and knows the details of executive pay.
  • The loan agreements require disclosure of executive compensation above certain limits, but the companies have not complied.
  • Pupatello cited Carol Stephenson, the dean of the Richard Ivey School of Business at the University of Western Ontario, as one of the qualified representatives on the GM parent board.
  • Federal Industry Minister Tony Clement has called on GM and Chrysler to reconsider their decision not to disclose executive pay from a public relations point of view.
  • GM has disclosed the pay of its three top officers, including CEO Fritz Henderson, who will earn about $1.25 million this year.
  • The two governments hold 12% of GM and 2% of Chrysler, but have much higher representation on the parent boards than their stakes warrant.

Statistics:

  • Over $14 billion invested by taxpayers to save General Motors and Chrysler.
  • 12% stake held by the two governments in General Motors.
  • 2% stake held by the two governments in Chrysler.
  • $1.25 million (U.S.) salary for GM CEO Fritz Henderson.
  • 2008 and 2009 bonuses and golden parachutes eliminated for departing executives at GM of Canada.

Sources:

  • "Ontario minister Pupatello defends lack of transparency on auto industry executive salaries" by the Canadian Press
  • "GM, Chrysler face pressure to reveal executive pay" by the Globe and Mail
  • "Dissident voices raised on Chrysler's collateral suasion" by the Globe and Mail