GM can't find a new CFO who will work for peanuts

The Wall Street Journal reports (subscription required) that "General Motors Co.'s search for an outsider to replace its chief financial officer is being complicated by the pay restrictions the Treasury Department is imposing on companies that received large bailouts from the federal government, according to people familiar with the matter."

GM is expected to be able to offer its CFO a pay package consisting of a significant amount of stock (Hah!) but a salary of only about $1 million per year -- not much for a company of GM's size and problems. Plus, ya gotta live in Detroit and work with Fritz Henderson.

As CFO of GM, Fritz Henderson presided over handling of the company's capital structure, including massive dividends when the company should have been paying down debt. He's the one who should be facing severe pay restrictions, but instead he's selfishly refusing to take a pay cut. In 2008, he was paid $8.7 million.

This is a perfect example of a politically motivated war on executive pay having the consequence of putting a massive taxpayer investment at risk. Not retaining the best CFO possible could cost the company a lot more than the few million it will save per year.

The government should be cracking down on the pay of executives who caused the mess that led to government involvement in these companies. But why punish outsiders brought in to try to clean up the mess and, by extension, punish the taxpayer whose investment is put at risk by these limits on executive pay?

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