GM halves dividend, slashes top salaries

Tuesday February 7, 9:07 am ET

DETROIT (Reuters) - General Motors Corp. (NYSE:GM - News) on Tuesday cut its dividend for the first time in more than 13 years as it struggles to save money after a year of billions of dollars in losses.

GM's board of directors cut the dividend in half, to an annual rate of $1 a share, saving about $565 million a year.

At the same time, Chairman and Chief Executive Rick Wagoner will see his salary cut in half, while Vice Chairmen John Devine, Robert Lutz and Fritz Henderson will see their salaries cut by 30 percent.

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Full URL: http://biz.yahoo.com/rb/060207/autos_gm.html?.v=5

It's about damn time. Now they just need to convince the UAW that they need to make cuts in benefits and pensions. Make their health care match non-union positions.

Kudos on the executive pay cuts.

-P

Boo on the dividend cut. Less incentive for me to buy the stock now.

Agreed that the dividend cut is not so good for PR, but they really should tell the world about the executive salary cuts- I happen to think those guys make *way* too much money while their companies swirl around the bowl. I hadn't heard about that until this post.

Official GM Press Release: http://media.gm.com/servlet/GatewayServlet...n=2&docid=22849

Edited February 7, 200620 yr by Variance

Back to my soapbox...

GM workers build/assemble GM's vehicles. They are directly responsible for the product GM sells. A shareholder, on the other hand can sit back & collect $2/share for doing what?!? GM workers have been continually pushed for pay & wage concessions - we've had several threads right here at C&G regarding the very topic. Yet, here is GM shareholders collecting $1b/year for doing nothing. Finally, the dividends are cut & shareholders can accept some of the burden. They certainly knew GM's financial status before purchasing - so I don't want to hear any complaints.

It always comes back to the core argument of: What is the economic engine?

Investor money or Consumer spending?

Both are needed, but which one really drives the economy? My bet is on consumer spending.

Back to my soapbox...

GM workers build/assemble GM's vehicles.  They are directly responsible for the product GM sells.  A shareholder, on the other hand can sit back & collect $2/share for doing what?!?  GM workers have been continually pushed for pay & wage concessions - we've had several threads right here at C&G regarding the very topic.  Yet, here is GM shareholders collecting $1b/year for doing nothing.  Finally, the dividends are cut & shareholders can accept some of the burden.  They certainly knew GM's financial status before purchasing - so I don't want to hear any complaints.

It always comes back to the core argument of:  What is the economic engine?

Investor money or Consumer spending?

Both are needed, but which one really drives the economy?  My bet is on consumer spending.

I don't see why a company running at a loss should pay ANY dividends.