General Motors halved its dividend on Tuesday, the first reduction in more than 13 years, and slashed executive pay, cutting costs and seeking leverage for sweeping, long-term changes in its labour contracts.
GM’s board of directors — which had been under pressure to make the moves from Kirk Kerkorian, its largest single shareholder — cut the dividend to an annual rate of $1 a share, saving about $565 million (323 million pounds) a year.
At the same time, Chairman and Chief Executive Rick Wagoner’s salary will be halved, while Vice Chairmen John Devine, Robert Lutz and Fritz Henderson will see their salaries cut by 30 percent.
Executive paycuts are a necessary and long overdue first step. But what about those ridiculous bonuses? We’ll find out soon enough.