Last year, the Treasury stake in the company was reduced from 61 percent to just 26.5 percent in the $23.1 billion GM initial public offering. The carmaker’s CEO, Daniel Akerson, also said he expects the government could relinquish its remaining stake in the company over several years.
GM execs should be eager to get Uncle Sam of their backs, as the automaker is restricted on how much it can pay them as long as the government is still part owner. According to Akerson, this severely limits the company’s ability to attract and keep efficient top management.
As a result, the carmaker has reportedly asked the Obama administration for more flexible rules on executive bonuses, according to Gasgoo. The limits are aimed at increasing compensation packages toward stock rather than cash remunerations. The Obama administration hasn't decided whether to grant GM's request.
The administration is looking to recuperate as much of the $39.5 billion that taxpayers poured into the GM rescue. The US Treasury was under pressure to reduce its stake in the company last year, although market conditions and the auto industry looked less than favorable for such a large IPO. The Treasury needs to sell its remaining GM shares at an average price of $53 each to break even on the bailout. GM shares fell 1.3%, or 51 cents, to $37.89 in yesterday’s trading.