ThinkProgress: How GM Justifies Lower Pay For Its First Female CEO
by Bryce Covert
So what is long-term compensation typically comprised of? Mostly stock that is only paid out after a certain period of time goes by or certain performance metrics are achieved, typically over a three- to four-year period, according to Steven Hall, a managing director of executive compensation consultancy Steven Hall & Partners, who spoke with ThinkProgress. As Bruce Ellig, author of The Complete Guide to Executive Compensation, pointed out, the pay could be seen as early as two years or as far away as ten years, and may or may not be prorated.
This is typical in an effort to “not only align pay with performance, but also to align the executive with the interests of shareholders,” Hall said. “Shareholders own stock in a company, so the more that we can pay them in the form of stock or give them the opportunity to earn stock, the better alignment we’re creating.” The GM spokesperson told ThinkProgress that Barra “is going to be CEO for a long time.” But if she were to for some reason leave earlier — if she were poached by a competitor, say — she would likely “leave a lot of that stuff on the table,” Hall noted.
Link to full article: http://thinkprogress.org/economy/2014/02/05/3254741/mary-barra-pay/#