UAW Strikes Target Big 3 CEO Pay. How GM and Ford Really Stack Up.

It just might be, but what that has to do with the negotiations, beyond riling up the workers isn’t clear.

To be sure, the CEOs are well paid. GM’s Mary Barra earned about $29 million in 2022, according to Bloomberg which looks at annual executive compensation disclosures that investors can look up with the Securities and Exchange Commission.

Ford’s top person Jim Farley earned just over $20 million in 2022. Stellantis CEO Carlos Tavares earned about 23.5 million euros, or almost $25 million at current exchange rates.

All three companies were asked about CEO pay. The companies confirmed the total compensation for 2022 and two pointed out that the vast majority of pay is variable, based on performance, and that salaries amount to a couple of million dollars.

That’s fair, but stock-based performance compensation is still compensation.
Tesla
(TSLA) CEO Elon Musk officially earned $0 in 2022. Still, he’s the richest man in the world because he took, essentially, all of his pay in stock and because he built Tesla into a global EV powerhouse.

U.S. auto maker CEO pay is higher than in the rest of the world. Former
Toyota Motor
(TM) CEO Akio Toyoda made about $6.7 million in 2022, according to Bloomberg. (Koji Sato took over for Toyoda in April.)
Honda Motor
(HMC) CEO Toshihiro Mibe earned about $2.3 million.
Hyundai Motor
(005380.Korea) CEO Dong Seock Lee earned about $5.3 million.

Volkswagen
(VOW3.Germany) and
BMW
(BMW.Germany) CEO’s Oliver Blume and Oliver Zipse both made between $7 million and $8 million in 2022.

On average the U.S. car CEOs make about four times what the foreign CEOs made in 2022. This is just a point in time, but it paints a picture. The picture isn’t skewed by accounting. Accounting expert Robert Willens tells Barron’s that international accounting and U.S. accounting rules are close enough to compare disclosers.

The picture isn’t only of Detroit. American CEOs tend to get paid more than foreign CEOs.

There can be many reasons postulated for that. There are more large capitalization growth companies in the U.S. compared with the rest of the world. That’s one justification. Some potential reasons aren’t as fundamental and look like self-fulfilling cycles. Part of the peer group Stellantis uses to set pay includes companies such as
Boeing
(BA),
Caterpillar
(CAT),
General Electric (GE),
and
Exxon Mobil
(XOM). Those four CEO earned about $21 million on average in 2022.

To some extent, boards say if their person makes $20 million then our person has to make $20 million.

Do all U.S. CEOs make too much? Maybe. There is a bold statement. A more definitive statement is that high pay is upsetting unionized workers.

Their feelings are easy to understand, but how they should impact labor negotiations is hard to figure out. If Barra, Farley, and Tavares gave back $50 million a year for all employees, not only the unionized ones, it would amount to about $80 a year for everyone else. Barely a nice steak dinner for two.

What’s more, it isn’t likely that agreeing to give back would solve the current strike. The UAW didn’t respond to a request for comment about how givebacks would impact things.

All high CEO pay appears to do is galvanize workers together through a shared sense of unfairness. Boards setting pay might have to think about that in the future, depending on how the 2023 UAW labor negotiations with the car makers turn out.

Through midday trading Wednesday, Ford and GM stocks were both down about 20% over the past three months while the
S&P 500
was down about 1%. Stellantis shares are up about 12%, but Stellantis is a more global company and shares are cheaper than the other two. Stellantis stock trades for less than 4 times estimated 2024 earnings. Ford and GM shares trade for less than 7 times and less than 5 times, respectively.

Write to Al Root at [email protected]