Porsche Boss Collects Giant Paycheck
November 30, 2007

By Bill Visnic

It will be a merry Christmas this year –- and for many Christmases future –- for Porsche AG CEO Wendelin Wiedeking, as the Financial Times cites sources within Porsche AG as estimating Wiedeking last year made between €60 million to €70 million -'– a thundering $88.5 million to $103.4 million based on current exchange rates.

The figure is gaudy by almost any measure short of Wall Street compensation, but particularly in the perspective of typical European (and German) executive pay. The FT indicates the most extravagant 2006 pay for a German executive was €13 million (slightly more than $19 million at today’s exchange rates) by the head of Deutsche Bank.

Wiedeking’s bulging pay packet reminds that 2007 is unlikely to be as remunerative for most automaker executives in Detroit, a region with a long-earned reputation for outsized pay. But times are hard in Detroit, and many executives now have either taken symbolic cuts or have large portions of their compensation tied to company performance.

Earlier this year, General Motors Corp. CEO Rick Wagoner voluntarily chopped his base salary by 25 percent, to a comparatively piddling $1.65 million; his previous base salary was $2.2 million. His total compensation in 2006 was around $10.2 million, however. But still a fraction of the payout to Porsche’s Wiedeking.

GM vice chairman Robert Lutz also took a pay cut (15 percent) for 2007, to $1.32 million, but nonetheless earned a total of $8.44 million last year.

Ford Motor Co. president and CEO Alan Mulally made headlines for knocking down a ponderous $28.8 million for just four months' work in 2006, but his 2007 W-2 should show less flashy numbers. Mulally’s 2006 pay included a meager base salary of $666,667; the big money came from a one-time $7.5-million hiring bonus and another $11 million paid to Mulally to compensate for lost deferred compensation from former employer Boeing Co.

The details of the compensation package for newly signed Chrysler LLC chairman and CEO Robert Nardelli are not known, as the company now is privately held by Cerberus Capital Management Inc. But it was widely reported a Cerberus source indicated Nardelli’s base salary is $1 annually -– his total compensation is said to be tied to business-performance metrics.

Prior to Chrysler’s split with former owner Daimler AG, CEO Tom LaSorda made $5.39 million in 2006.

From Wiedeking on down, these pay structures will continue to increase pressure on Japanese automakers, who have a history for considerably more restrained executive compensation –- at least on paper.

A Reuters report from earlier this year cited a University of Indiana economic study that said Japanese CEOs typically earn only about one-third the pay of their U.S. counterparts.

And it appears the low-pay reputation earned by Asian automakers is beginning to affect their ranks. This year alone, several senior executives have fled Japanese automakers for posts in Detroit –- most famously Jim Press, former president and COO at Toyota Motor Corp.

Not long before leaving Toyota to take the job of vice chairman and president at Chrysler, Press, a 37-veteran of Toyota, became the first and only non-Japanese ever elected to Toyota's board of directors in Japan. Press, who left Toyota as its highest-ranking executive in North America, took the job at Chrysler amid speculation his total compensation could approach $50 million, although his actual annual pay, as with Chrysler’s Nardelli, is unreported.

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