GM Cutting Executive Pay, Deferring Salaried Compensation

Marco Green
March 27, 2020

GM and Ford did not immediately comment.

Also, the pay cut is applicable only to the staff that can "work from home".

In addition to the 20% salary deferral for white-collar workers, executives are also taking cuts of 5% or 10% to their cash compensation, excluding bonuses, stock options or other incentives.The GM board will take a 20% reduction in total compensation.

The company said in a prepared statement Friday, March 27, that the cuts will affect all GM salaried employees worldwide - approximately 69,000 individuals.

The reduced pay, which will begin April 1, will be repaid in a lump sum with interest no later than March 15, 2021, according to the report.

Jim Hackett-the CEO of the Ford Motor Company-said this week he would answer the call to help.

About 6,500 USA employeeswho can not work from home will go on paid leave, which the company is calling a "salaried downtime paid absence".

GM declined to disclose the expected cash savings from the actions. Other countries are evaluating the appropriate use of similar programs. This reduced salary is meant to be in lieu of unemployment compensation benefits. Those are mostly employees in manufacturing or engineering jobs that can't be done remotely.

Ford Motor Co. earlier Thursday said its top 300 executives would have 20% to 50% of their pay deferred.

"We have taken significant actions to reduce costs and to fortify our balance sheet and cash position in this unprecedented situation".

FCA also has started taking steps to reduce its spending by halting major construction projects in MI and idling more than 2,000 contractors employed on various projects important to FCA.

Other reports by Click Lancashire

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