GMAC CEO Proves Exactly What is Wrong With Our Society

Alvaro de Molina, CEO of GMAC and perennial lottery winner



Ready to get ticked off? Only two months ago, GMAC received $6 billion in bailout aid under the auspices of TARP (Troubled Asset Recovery Program, aka banking bailout bill). Today, we see how this evil banking company shows its appreciation. Alvaro de Molina received $11.2 million in 2008 ALONE for his fabulous work that necessitated his company needing $6 billion in FREE money.

First of all, is anyone really worth this kind of money? Wouldn't it be nice if all of us could get paid these sums as reward for driving a business into the ground? Obviously, de Molina is not alone as we read daily about the atrocities of CEO's who receive inordinate sums for shipwrecking their companies. I truly am worn out by these stories and wonder what it will take to stop this madness.

From Automotive News:

Auto financier GMAC LLC, the recipient of a $6 billion federal bailout in December, today said CEO Alvaro de Molina was awarded $11.62 million of compensation in 2008 -- which doubled his total compensation from 2007.

De Molina was awarded a $1.2 million salary, $5.81 million of stock awards and $4.8 million of other compensation, offset by option awards of negative $194,000, reflecting the application of an accounting standard.

GMAC said de Molina's compensation was $4.93 million in 2007. He became CEO on Sept. 5 of that year.

GMAC has in recent quarters suffered operating losses in its auto and mortgage units, but in December won its government bailout, as well as bank holding company status that allows it to tap lower-cost funding.

GMAC reported de Molina's compensation in a summary table included in its annual report filed with the U.S. Securities and Exchange Commission.

Differing calculations

Some pay consultants and governance experts tabulate executive pay differently, saying the summary total may be imperfect because it counts options and stock as part of pay when they vest rather than when they are awarded.

About $2.26 million of de Molina's compensation came from the use of corporate aircraft. GMAC said it no longer provides aircraft for business or personal use.

The bailout required private equity firm Cerberus Capital Management LP and General Motors to slash their respective 51 percent and 49 percent stakes in the Detroit-based lender.

In the annual report, GMAC said there remains substantial doubt about the ability of its mortgage lending unit, Residential Capital LLC, to survive. GMAC said it might take a $3.1 billion charge if ResCap were to file for bankruptcy protection and its investment in ResCap equity fell to zero.