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Mary Barra’s Paycheck


By:

18. February 2014

So Mary Barra, GM’s CEO, is going to be making a lot of money this year. It’s on the order of $1.6-million in salary, $2.8-million in short-term incentives, $10-million in long-term stock compensation, or about $14-million.

So what?

All I can say is good for her.

There was some consternation by those who thought that because her predecessor, Dan Akerson, had a better base salary, Ms. Barra was being unfairly treated because she is a woman.

There was other consternation by those who think that Ms. Barra is not the right person for the job, so she was being unreasonably compensated.

GMBidenBarraCorvette03.jpg Barra, Corvette, Biden (photo by John F. Martin)

The bottom line here is that Ms. Barra is running a huge, global organization, and operations of that size tend to pay their executives in a way that most of us can only dream of. What’s more, these outfits are not charitable operations, so compensation is calculated based on the expected return-on-investment from the person in question. These calculations are individual, not something that is set in advance.

So that’s how Ms. Barra is being valued. And how she is being compensated.

It is all about expected capability. Clearly, there are great expectations that she should be able to deliver on.

So she’s making a lot of money.

Good for her.

She’ll earn every dime.

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