UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Soliciting Material Pursuant to ss.240.14a-12
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GENERAL MOTORS COMPANY
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general motors company proxy statement and notice of 2017 annual meeting of shareholders [ ], 2017 | [ ] eastern time ct6 plug-in
WHO WE ARE AND WHY WE ARE HERE...
We earn customers for life |
Our brands inspire passion and loyalty |
We translate breakthrough technologies into vehicles and experiences that people love |
We serve and improve the communities in which we live and work around the world |
We are building the most valued automotive company |
GENERAL MOTORS COMPANY
Letter from the Chairman & Chief Executive Officer
Dear Fellow Shareholder:
I am pleased to invite you to attend the 2017 Annual Meeting of Shareholders (Annual Meeting) of General Motors Company. It will be held at [ ] Eastern Time on [ ], 2017, at the [ ]. Please see How can I attend the Annual Meeting? on page 94 for further instructions.
Our Plan is Working
GMs record performance during the last three years and strong 2017 outlook are the direct result of the ongoing actions were taking to transform your Company and enhance shareholder value. Building on that commitment, we recently announced a transaction under which our Opel/Vauxhall European operations and our GM Financial European operations will become part of PSA Group. This is the latest in a series of decisions to continue the deployment of capital to higher-return opportunities, including in advanced technologies driving the future, and unlock significant value for our shareholders. Every major decision we make is focused on building sustainable, long-term value for our shareholders. Under our disciplined capital allocation plan we will continue to reinvest in the business to achieve a 20% or greater return on invested capital; maintain a strong, investment-grade balance sheet with a target cash balance of $18 billion (post-transaction); and return all remaining free cash flow to shareholders on an ongoing basis.
Key to Our Success
We place the customer at the center of everything we do and that guiding principle continued to drive our success in 2016. By designing a vehicle that met and exceeded customer demands in every essential category, the Chevrolet Bolt EV won North American Car of the Year and many other awards. As the transformation of our industry continues at an accelerating pace, the Bolt EV is breaking new ground, and we believe it is the beginning of a new phase of opportunity in electrification. The success of our winning portfolio of cars, trucks and crossovers is giving us the opportunity to invest in the initiatives that are enabling us to lead in the future of personal mobility. The convergence of connectivity, alternative propulsion, autonomous vehicles and the sharing economy is truly allowing us to stretch the boundaries of what is possible and develop vehicles that are safer, smarter, cleaner and more energy-efficient than ever before.
Corporate Social Responsibility
We strive to align environmental, social, and governance (ESG) issues to our purpose and values. As a transformative leader, GM delivers safer, simpler and better solutions for humanity to move forward and enhance lifes journey. Over the past year, I have worked with the Board to better position GM as forward-thinking and elevate our leadership profile and reputation among investors, policymakers and others as a leader in ESG best practices. We believe we have a unique opportunity to resolve important issues and contribute to decreasing pollution, congestion, and accidents, and do this while being transparent about the principles and policies that guide us forward.
Greenlights Proposal and Director Nominees
As we continue to navigate this period of extraordinary change, we received notice that a shareholder, Greenlight Capital, Inc. (Greenlight), intends to present at the Annual Meeting a proposal, which we have further described in this Proxy Statement in accordance with the materials we received from Greenlight. This proposal suggests that the current dividend on the Companys existing common stock should cease and a new, additional class of common stock so called Dividend Shares should be distributed. These Dividend Shares would be exclusively entitled to a fixed dividend at the current amount in perpetuity, but would not share in future earnings upside and would have limited downside protection against negative risk. Dividends or share repurchases on our common shares could not occur before all dividends on the Dividend Shares, both past and current, had been paid, making the dividend payable on the Dividend Shares cumulative and significantly limiting our financial flexibility.
GM values the views of its owners and engaged directly with Greenlight on numerous occasions during the past seven months, including a meeting between Greenlight and members of your Board of Directors. After a thorough assessment, your Board of Directors unanimously concluded that Greenlights proposal would be a speculative and unproven change in capital structure that would create significant additional risks for GMs shareholders and its business, and is not in the best interests of our shareholders.
The key risks your Board found in the proposal include: no positive effect on the Companys underlying business or cash flows and, therefore, entirely speculative valuation impact; unknown, uncertain, and untested market demand and liquidity for the Dividend Shares, as well as the remaining common shares that would no longer be dividend-paying; substantially reduced financial flexibility resulting in the likely loss of GMs investment grade credit rating; and material governance issues and conflicts as a result of the divergent objectives of the two classes of common stock.
Greenlight also intends to nominate a slate of four director nominees for election to the Board in support of its proposal, and in opposition to the highly qualified nominees recommended by your Board. Your Board has a well-defined process for selection of director candidates, which begins with a review of the strategic needs of the business and alignment of the Boards entire mix of skills, qualifications, and experience toward driving effective oversight of these strategic objectives and initiatives. After a thorough review of each of the Greenlight candidates under this established process, your Board of Directors unanimously determined not to recommend any of the Greenlight candidates.
This Proxy Statement and any additional communications GM provides on this topic will further outline the basis for your Boards strenuous opposition to Greenlights proposal and director nominees.
Your Board has thoroughly evaluated Greenlights proposal and director nominees and recommends that you vote FOR GMs nominees and AGAINST the Greenlight proposal by following the instructions on the enclosed WHITE proxy card.
Your Board and management team are singularly focused on the long-term interests of all of our shareholders. We have a highly engaged Board with a diverse range of expertise that drives effective oversight of our strategic priorities and operations. We encourage healthy constructive debate and we regularly challenge ourselves to make the tough decisions that are essential in times of significant change, such as the sale to PSA. It is clear that 2017 will be another year of progress as we advance the transformation of your Company.
Your vote this year is especially important. I encourage you to review this Proxy Statement and the Companys other communications to its shareholders carefully.
Thank you for your support and interest in GM.
Sincerely,
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Mary T. Barra Chairman & Chief Executive Officer
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Letter from the Board of Directors
Dear Fellow Shareholder:
General Motors Company is committed to sound corporate governance policies and practices that are designed and continually assessed to enable the Company to operate its business responsibly, with integrity, and in the long-term best interests of its shareholders. We are pleased to share our perspectives on the following key topics of importance to you.
Shareholder Engagement
A priority for us is to listen to shareholders views on the Company and incorporate them into our boardroom discussions. This dialogue helps us and the Companys senior management team gain feedback on a variety of topics, including strategic and financial performance, executive compensation, board composition and leadership structure, as well as important environmental and social issues.
Following the 2016 Annual Meeting of Shareholders, members of the Board, including our Independent Lead Director and Compensation Committee Chair, met with 11 of our largest shareholders, representing approximately 25% of our outstanding common stock. In addition, one or more members of management met with over 80 shareholders throughout 2016 on various matters. The constructive insights, experiences and ideas exchanged during these engagements allows us to further evaluate and assess key initiatives from different perspectives and viewpoints.
Compensation Tied to Value Creation
We have enhanced our executive compensation program to further align it with our strategic priorities and to reward long-term business success. During our shareholder engagement initiatives, we received feedback regarding the structure and nature of our compensation programs. We believe we have designed a program that aligns with shareholder interests, incentivizes operational excellence, and recognizes individual performance, while remaining simple enough to demonstrate a clear linkage between compensation and performance. The revised program continues to minimize any incentive for management to take excessive risks.
Greenlights Proposal and Director Nominees
As Mary Barra indicated in her letter to you, GM has received notice that a shareholder, Greenlight, has proposed a slate of four nominees for election to the Board, in opposition to the highly capable nominees recommended by your Board, and in support of Greenlights own proposal. Greenlights proposal contemplates that the current dividend on the Companys existing common stock should cease and a new, additional class of common stock so called Dividend Shares should be distributed that would be exclusively entitled to a fixed dividend at the current amount in perpetuity, but would not share in future earnings upside and would have limited downside protection against negative risk. Dividends or share repurchases on our common shares could not occur before all dividends on the Dividend Shares, both past and current, had been paid making the dividend payable on the Dividend Shares cumulative and significantly limiting our financial flexibility.
GM values the views of its owners, and has engaged directly with Greenlight on numerous occasions during the past seven months, including a meeting between Greenlight and members of the Board. Your Board and management have evaluated Greenlights idea and its director nominees thoroughly. As we describe in our response to Greenlights proposal, Item No. 7 in this Proxy Statement, we have unanimously concluded that the proposal would create significant additional risks for GMs shareholders and its business. Management and your Board regularly review the Companys strategy and capital allocation framework. We recently conducted an extensive review of various alternative capital allocation strategies, including Greenlights idea, changes in the pacing and/or nature of return of capital to shareholders, and the issuance or distribution of preferred or other securities. Together, the Board and management team, with expert advice from three top-tier investment banks, concluded that the Companys existing capital allocation strategy is the right one to deliver long-term, sustainable value for GMs shareholders.
Your Board has concluded that GMs nominees for election as directors represent the best blend of experience, qualifications, and skills to provide effective oversight of the Companys strategic plans and objectives. The selection of qualified directors is both complex and crucial to furthering the long-term interests of our shareholders. Candidates must be able to contribute significantly to the Boards discussion and decision-making on the broad array of complex issues facing the Company. Your Board believes that each of the Boards nominees brings the skills and experiences that are essential to the Board and complement the qualifications and expertise of the other Board members. In contrast, we believe the skills, experiences and qualifications of Greenlights nominees are not at the level of the Boards nominees and that Greenlights nominees are being proposed in connection with Greenlights proposal, which your Board has rejected. We do not endorse any of Greenlights nominees and urge you to disregard Greenlights solicitation of votes for its nominees.
Your Board unanimously and strongly urges you to disregard any proxy card that you receive from Greenlight. If you have previously submitted a proxy card sent to you by Greenlight, you can revoke that proxy and vote for the nominees recommended by the Board and on the other matters to be voted on at the Annual Meeting by using the enclosed WHITE proxy card.
Your Board unanimously recommends that you vote FOR the election of our 11 director nominees and AGAINST the Greenlight Proposal on the enclosed WHITE proxy card or voting instruction form.
Your Vote is Important
It is important that your shares be represented at the meeting whether or not you are personally able to attend. Accordingly, after reading the attached Notice of the 2017 Annual Meeting of Shareholders and Proxy Statement, please promptly submit your proxy by telephone, internet or mail as described in your WHITE proxy card. If you choose to submit your vote by additional proxy or voting instruction card, please sign, date and mail the WHITE proxy card in the enclosed postage-paid reply envelope.
We are honored to serve you. We encourage you to review this Proxy Statement and the Companys other communications to its shareholders.
Sincerely,
The Board of Directors
The attached Proxy Statement is dated [ ] , 2017 and is first being mailed to shareholders on or about [ ], 2017.
If you have any questions or require any assistance with voting your shares, please contact our proxy solicitor at the contact listed below:
INNISFREE M&A INCORPORATED
Shareholders (within the U.S. and Canada), call toll-free: +1 (877) 825-8964
Shareholders (outside the U.S. and Canada), call: +1 (412) 232-3651
Banks and Brokers, call collect: +1 (212) 750-5833
PRELIMINARY PROXY STATEMENT SUBJECT TO COMPLETION
This summary highlights information contained elsewhere in this Proxy Statement. It does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully before voting.
General Information
Meeting: 2017 Annual Meeting of Shareholders
Date: [ ], 2017
Time: [ ] Eastern Time
Place: [ ]
Record Date: April 7, 2017
Stock Symbol: GM
Exchange: NYSE
Transfer Agent: Computershare Trust Company, N.A.
State of Incorporation: Delaware
Corporate Website: gm.com
Investors Website: gm.com/investors
Annual Report: gm.com/annualreport
Sustainability Report: gmsustainability.com
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Corporate Governance (see pages 26-38)
Item No. 1: Election of Directors
Director Nominees Recommended by Board: 11
Director Term: One-year
Director Election Standard: Plurality of votes cast in contested elections (majority voting standard in uncontested elections)
Board Meetings in 2016: 8
Standing Board Committees (Meetings in
2016):
Right to Call Special Meetings: Yes
Proxy Access: Yes
Director-Investor Engagement Policy: Yes
Governance Documents and Board Communications: gm.com/investors/corporate-governance.html
Your Board unanimously recommends a vote FOR all of our director nominees.
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Background of the Solicitation Greenlights Proposal and Director Nominees
The Company evaluates its strategy and capital allocation framework on an ongoing basis. This evaluation also takes into account the perspectives of the Companys shareholders, whose views are actively elicited, sought and received as a result of the Companys shareholder engagement efforts.
Over a seven-month period, the Board and management extensively reviewed various capital allocation strategies and thoroughly considered the Greenlight Proposal, as well as the perspectives of other shareholders. In addition to the Greenlight Proposal, the Board considered other changes to the Companys capital allocation strategy, including changes to the pacing and/or nature of return of capital to shareholders and the issuance or distribution of preferred or other securities. Following such review, the Board reaffirmed that the Companys current capital allocation strategy, which includes investing in higher-return business opportunities, retaining a strong investment grade balance sheet, maintaining a target cash balance of $20 billion, and returning all remaining free cash flow to shareholders through dividends and share repurchases, is in the best interests of the Company and its shareholders.
In January 2017, under this framework, the Board approved the repurchase of up to an additional $5 billion of the Companys common stock with no expiration date, in addition to completing the remaining portion of previously announced repurchase programs. On March 6, 2017, as part of the Companys announcement of the sale of its Opel/Vauxhall subsidiary and GM Financials European operations, the Company announced that it would lower the cash balance requirement under its capital allocation framework by $2 billion, which it intends to use to accelerate share repurchases under these programs, subject to market conditions. The Company will continue to evaluate its capital allocation program regularly and consider the perspectives of the Companys shareholders in doing so.
The summary below of the significant number of material contacts between the Company and Greenlight is intended to provide context to shareholders with respect to the Greenlight Proposal and Greenlights director nominees. During the period outlined below, the Company also engaged with other shareholders and took into account their perspectives in coming to the determinations reached by the Companys Board and management team concerning the Companys capital allocation strategy and, as a result, the Greenlight Proposal, as described above.
| On August 11, 2016, David M. Einhorn, founder and president of Greenlight, contacted Chuck Stevens, Executive Vice President and Chief Financial Officer of the Company, by email to ask for a meeting in September to discuss an idea that Mr. Einhorn wanted to present to Mr. Stevens. In response to this email, Mr. Stevens arranged to meet with Mr. Einhorn on September 15, 2016. |
| At the September 15, 2016 meeting, attended by Mr. Einhorn, Mr. Stevens and other representatives of Greenlight and the Company, Mr. Einhorn delivered a presentation with respect to a concept he referred to as Dividend Shares. The presentation contemplated the distribution of newly created Dividend Shares to existing holders of common stock, stating that the Companys dividends on existing common stock would be eliminated and reallocated to the Dividend Shares as a fixed cumulative dividend. The presentation stated that the Dividend Shares would be senior to the existing common stock, while the existing common stock would have voting rights and participate in the Companys remaining earnings. The presentation also stated that if multiple dividends were missed on the Dividend Shares, then holders of Dividend Shares could demand board representation. |
| Although this presentation stated that the Dividend Shares could be either a separate class of common equity or a perpetual preferred stock, the terms of the Dividend Shares as set out in the presentation were consistent with the terms of a perpetual preferred stock, in that the Dividend Shares would be senior to the existing common stock and carry a fixed cumulative dividend as well as rights to board representation if dividends were in arrears. Accordingly, subsequent discussions regarding the proposal with representatives of Greenlight focused on a preferred stock structure, with Greenlight providing additional materials regarding such structure and the potential provisions of the proposed Dividend Shares. |
| On October 5, 2016, representatives of GMs treasury and investor relations teams held a teleconference with Mr. Einhorn and other Greenlight representatives to discuss follow-up questions on the proposal. On October 31, 2016, representatives of GMs treasury and investor relations teams and GMs financial advisors met with representatives of Greenlight to review various potential considerations related to the proposal. On November 9, 2016, Mr. Stevens contacted Mr. Einhorn to follow up on the October 31, 2016 meeting. |
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| Through the month of November, the Company and its financial advisors continued to analyze the Greenlight proposal and various alternatives, including a dual-class common stock variant of the preferred stock structure. The Company also continued to conduct shareholder engagement initiatives, including as to matters relating to capital allocation and capital structure. In addition, the Companys financial advisors held hypothetical discussions on a no-names basis with ratings agencies to explore the impact that the distribution of a security such as the one proposed by Greenlight would have on a major companys credit rating. Members of the Board were kept apprised of the nature and status of the Companys engagement with Greenlight, including the evaluation and ongoing analysis of the Greenlight proposal. |
| On December 6, 2016, Mr. Stevens, with representatives of GMs treasury and investor relations teams and two of GMs financial advisors, met with Mr. Einhorn and representatives of Greenlight to continue their discussion of issues raised by Greenlights proposal. On December 14, 2016, at a regularly scheduled meeting, the Board and management reviewed Greenlights proposal as put forth in the September 15, 2016 presentation and the discussions on the proposal between representatives of the Company and of Greenlight. The Board also reviewed the updated analyses of the proposal conducted by the Companys management and financial advisors. Following deliberation, the Board determined that it was not in the best interests of the Company and its shareholders to pursue the proposal. On December 15, 2016, Mr. Stevens and other representatives of the Company met with Mr. Einhorn and other representatives of Greenlight to convey the Boards decision not to move forward with Greenlights proposal. |
| On January 13, 2017, Mary Barra, Chairman & Chief Executive Officer of the Company, received a telephone call from Mr. Einhorn requesting a short discussion. Subsequently, on January 16, 2017, Ms. Barra, Mr. Stevens and Mr. Einhorn held a teleconference to discuss Greenlights proposal. Mr. Einhorn said that he continued to believe that the Dividend Share proposal would create value and that he believed that structuring the Dividend Shares as a second class of common stock rather than as a preferred stock could address concerns about the proposals potential negative impact on the Companys credit ratings. |
| On January 25, 2017, Ms. Barra, Mr. Stevens and representatives of GMs treasury and investor relations teams had a further discussion of the dual-class common stock variant of the proposal with Mr. Einhorn and other representatives of Greenlight by telephone. During the month of January, the Company and its financial advisors also refreshed and updated their prior analyses of a dual-class common stock variant of Greenlights proposal. |
| As part of the Companys consideration of the dual-class common stock variant of Greenlights proposal, on January 30, 2017, a Greenlight representative sent an email to a representative of GM attaching proposed terms for the dual-class common stock variant. The proposed terms contemplated a pro rata distribution to GMs shareholders of one Dividend Share for each share of existing common stock. The proposed terms also contemplated that the Dividend Shares would be entitled to a quarterly dividend in an amount equal to $0.38 per share. The proposed terms provided that if dividends on the Dividend Shares were in arrears, the Company would not be able to repurchase or pay dividends on the existing common stock. The proposed terms contemplated that the Dividend Shares would be entitled to one-tenth of a vote per share, except that the Dividend Shares would have a separate class vote to approve a change of control of the Company. |
| Later on January 30, 2017, Ms. Barra, Mr. Stevens and representatives of GMs treasury and investor relations teams again discussed the proposal, as well as the proposed terms, with Mr. Einhorn and other representatives of Greenlight. In response to questions seeking more clarity with respect to the dual-class common stock proposal, Mr. Einhorn referred back to Greenlights September 15, 2016 presentation and said that the proposal was still essentially the same as set forth in that presentation. Mr. Einhorn also stated that he was considering submitting the Dividend Share proposal as a shareholder proposal at the Annual Meeting as well as a slate of four to five director nominees. |
| In early February, representatives of the Company spoke with representatives of three credit rating agencies on a named basis to explore the impact that the Dividend Share proposal could have on the Company. |
| On February 6, 2017, at a telephonic meeting, the Board received an update on the further discussions with Greenlight, and the further analyses of the proposal conducted by the Companys management and financial advisors. Based on this review, the Board again determined that it was not in the interests of the Company and its shareholders to pursue the proposal. Later on February 6, 2017, the Company received a notice from Greenlight (the Greenlight Notice) of its intent to nominate a slate of four nominees to stand for election to the Board at the Annual Meeting and of its intent to present the Greenlight Proposal as a shareholder proposal at the Annual Meeting. |
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| On February 17, 2017, outside counsel for the Company sent to outside counsel for Greenlight a directors questionnaire and requested that each of Greenlights nominees complete and return the questionnaire. On February 23, 2017, Greenlights outside counsel sent the completed questionnaires from Greenlights nominees to the Companys outside counsel. |
| On March 6, 2017, the Company and PSA Group announced an agreement under which the Companys Opel/Vauxhall subsidiary and GM Financials European operations will join the PSA Group. Later that day, representatives of the Company and representatives of Greenlight had a call to discuss Greenlights questions with respect to the transaction. |
| On March 16, 2017, Mr. Stevens and representatives of the Company had a telephonic discussion with representatives of Greenlight about the Companys interactions with the credit rating agencies regarding the Greenlight Proposal. |
| On March 22, 2017, Mss. Barra, Mendillo, and Stephenson and Messrs. Mullen, Mulva, Schoewe, and Solso met with Mr. Einhorn and representatives of Greenlight. At the meeting, Mr. Einhorn and the representatives of Greenlight delivered a presentation and responded to questions regarding the Greenlight Proposal and the Greenlight nominees. |
| On March 25, 2017, the Board held a telephonic meeting to discuss the Greenlight Proposal and the Greenlight nominees. The Board unanimously determined that the Greenlight Proposal was not in the best interests of the Company or its shareholders. On the unanimous recommendation of the Governance and Corporate Responsibility Committee, the Board also unanimously determined not to recommend any of the Greenlight nominees for election to the Board. |
| On March 27, 2017, Ms. Barra called Mr. Einhorn to inform him that the Board had unanimously determined to reject the Greenlight Proposal and not to recommend any of the Greenlight nominees for election to the Board. |
| On March 28, 2017, Greenlight publicly issued a statement and a presentation in support of the Greenlight Proposal. On the same day, the Company publicly issued a statement and a presentation setting forth the reasons for the Boards determination to reject the Greenlight Proposal and not to recommend any of the Greenlight nominees. |
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ITEM NO. 1 ELECTION OF DIRECTORS
Nominees for Director Recommended by the Board
Your Board recommends a vote FOR all of the nominees listed below.
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The selection of qualified directors is critical to the long-term success of GM and its shareholders. Director nominees must be able to contribute significantly to the Boards discussion and decision-making on the broad array of complex issues facing the Company. The Boards established process for director selection is well-defined and comprehensive, and it begins with an assessment of GMs strategic objectives and the skills, experience and qualifications needed to further those objectives. Through that process, your Board has determined that its nominees for election as director collectively represent the best mix of experience, qualifications and skills to further the long-term interests of all shareholders. We do not endorse any of Greenlights nominees and urge you to disregard Greenlights solicitation of votes for its nominees.
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Director Election Requirements
All directors stand for election annually. Upon the recommendation of the Governance and Corporate Responsibility Committee (Governance Committee), the Board has nominated each of the 11 persons identified below to serve as director for a one-year term or until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal. Each director nominee recommended by the Board was elected to the Board at the 2016 Annual Meeting.
We urge you to sign and return the WHITE proxy card or voting instruction form or vote by Internet or telephone. By doing so, the Proxy Committee (comprised of Mary T. Barra, Daniel Ammann, and Charles K. Stevens, III) will vote your shares for all 11 nominees described in the following section, unless you indicate on the WHITE proxy card or voting instruction form to withhold authority to vote for one or more of such nominees. Each director will serve until the next annual meeting of shareholders and until a successor is elected and qualified, or until his or her earlier resignation, removal, or death. If any of the Boards nominees for director becomes unavailable to serve before the Annual Meeting (which we do not anticipate), the Board may decrease the number of directors to be elected or designate a substitute nominee for that vacancy.
We have received notice pursuant to Section 1.11 of our Bylaws that Greenlight intends to nominate its own slate of four nominees for election to the Board at the Annual Meeting. We believe based on Greenlights notice that the election of directors at the Annual Meeting will be a contested election. Our bylaws provide that in a contested election, all directors are to be elected under a plurality voting standard. Under the plurality voting standard, the 11 persons who receive the greatest number of votes are the persons elected to the Board for the following year. Withhold votes will be counted as present for purposes of this vote but are not counted as votes cast.
Your Board does not endorse any Greenlight nominee and unanimously recommends that you disregard any proxy card that may be sent to you by Greenlight. Your Board affirmatively determined that each of our 11 nominees qualifies for election to the Board under the established and rigorous criteria for director candidates described in the next section and unanimously recommends that you vote on the WHITE proxy card and voting instruction form FOR the election of each of our nominees listed below.
Please note that voting to Withhold with respect to the Greenlight nominees on Greenlights proxy card is not the same as voting for our Boards nominees because a vote to Withhold with respect to any of the Greenlight nominees on Greenlights proxy card will revoke any proxy you previously submitted. If you have already voted using Greenlights proxy card, you have every right to change your vote by voting via the Internet or by telephone by following the instructions on the WHITE proxy card, or by completing and mailing the enclosed WHITE proxy card in the enclosed postage-paid envelope. Only the latest validly executed proxy that you submit will be countedany proxy may be revoked at any time prior to its exercise at the Annual Meeting.
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Nominees for election as director are proposed by the Board upon recommendation of the Governance Committee.
The Governance Committee annually reviews the appropriate skills and characteristics needed for the Board to effectively perform its oversight function, including importantly, the continued execution of GMs strategic priorities. Nominees are recommended to the Board, after considering current Board composition, Company strategy and other relevant facts and circumstances, including the directors history of attendance and participation in meetings, other contributions to the activities of the Board and GM, active participation in orientation and ongoing educational events, the results of Board self-evaluations and any potential or actual conflicts of interest.
The selection of qualified directors is fundamental to the Boards successful oversight of GMs strategy and ongoing operations. The Governance Committees and the Boards priorities for recruiting new Board members may vary at times, depending on the Companys needs and the makeup of the Board at such time. In every case, candidates must be able to contribute significantly to the Boards discussion and decision-making on the broad array of complex issues facing the Company. The Governance Committee has historically engaged a reputable, qualified search firm to help identify and evaluate candidates.
As part of its comprehensive process for selecting nominees for the Board, our Governance Committee utilizes a detailed skills matrix to consider the particular experience, qualifications, and attributes of current Board members and prospective candidates. The Governance Committee seeks nominees who, taken together as a group, possess the skills, diversity, and expertise appropriate for maintaining a well-rounded and effective Board aligned with achievement of the Companys business strategy and operations. In evaluating potential director candidates, the Governance Committee considers, among other factors, the criteria listed below and any additional characteristics that it believes one or more directors should possess, based on an assessment of the needs of our Board at that time.
Significant leadership experience over an extended period, especially as CEO; extraordinary leadership qualities; and the ability to identify and develop those qualities in others. | ||
Leadership in automotive or related industry. Expertise in key businesses and proven knowledge of key customers and risks associated with the business. | ||
Experience in managing significant manufacturing operations. | ||
Understanding of technology and innovation through academia or industry experience. | ||
Relevant risk management oversight and experience. | ||
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Global business and cultural experience. | |
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Expertise in complex financial and accounting matters. | |
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Knowledge of global government relations, public policy, and regulatory matters. | |
Marketing experience, including digital marketing, brand and product awareness; social media experience. | ||
Diversity of perspective, professional experience, age, and background, such as gender, race, ethnicity, and country of origin. |
The Governance Committee considers individuals with a broad range of business experience and varied backgrounds. Although GM does not have a formal policy governing diversity among Board members, the Board strives to identify candidates with diverse backgrounds. We recognize the value of overall diversity and consider members and candidates opinions, perspectives, personal and professional experiences, and backgrounds, including gender, race, ethnicity, and country of origin. We believe that the judgment and perspectives offered by a diverse board of directors improves the quality of decision making and enhances the Companys business performance. We also believe such diversity can help the Board respond more effectively to the needs of customers, shareholders, employees, suppliers, and other stakeholders worldwide.
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ITEM 1: ELECTION OF DIRECTORS
Pursuant to the Stockholders Agreement dated October 15, 2009 between the Company and the UAW Retiree Medical Benefits Trust (the VEBA Trust), the VEBA Trust has the right to designate one nominee to our Board for so long as it holds 50% of the shares of GMs common stock that it initially acquired, subject to the consent of the UAW and approval by the Board (not to be unreasonably withheld). The VEBA Trust has designated Mr. Ashton, who has been recommended by the Governance Committee and nominated by the Board as part of the slate of candidates it recommends for election at the Annual Meeting.
The Governance Committee will consider persons recommended by shareholders for election to the Board. To recommend an individual for Board membership, write to Jill E. Sutton, Corporate Secretary and Deputy General Counsel, Corporate, Finance and Strategic Transactions (Corporate Secretary and Deputy General Counsel) of our Company, at the mailing address or e-mail address provided on page 98 in How can I obtain the Companys corporate governance information? The Governance Committee will review the qualifications and experience of each recommended candidate using the same criteria for candidates proposed by Board members and communicate its decision to the candidate or the person who made the recommendation.
u | Information About Your Boards Nominees for Director |
Set forth below is information about our nominees, including their name and age, recent employment or principal occupation, their period of service as a GM director, the names of other public companies for which they currently serve as a director or have served as a director within the past five years, and a summary of their specific experience, qualifications, attributes, and skills that led to the Boards conclusion that they are qualified to serve as a director on our Board at this time.
|
Mary T. Barra, Chairman & Chief Executive Officer, General Motors Company (since January 2016) |
|||||
| ||||||
Age: 55 Director Since: 2014 Committees: Executive (Chair) Current Public Company Directorships: General Dynamics Corporation |
||||||
|
Senior Leadership Industry Manufacturing Technology Risk Management Global Finance Government Marketing Diversity
|
17 |
ITEM 1: ELECTION OF DIRECTORS
|
Theodore M. Solso, Independent Lead Director, General Motors Company (since January 2016) | |||
and Retired Chairman & Chief Executive Officer, Cummins, Inc. (since 2011) |
||||
| ||||
Age: 70 Director Since: 2012 Committees: Executive Current Public Company Directorships: Ball Corporation (Lead Director) Prior Public Company Directorships: Ashland Inc. (1999 to 2012), where he was Lead Director from 2003 to 2010 | ||||
|
|
Joseph J. Ashton, Retired Vice President, United Auto Workers (since 2014) |
|||
| ||||
Age: 68 Director Since: 2014 Committees: Finance, Risk Current Public Company Directorships: None
|
||||
|
Senior Leadership Industry Manufacturing Technology Risk Management Global Finance Government Marketing Diversity
18 |
|
ITEM 1: ELECTION OF DIRECTORS
Linda R. Gooden, Retired Executive Vice President, Information Systems & Global Solutions, Lockheed Martin Corporation (since 2013) | ||||
| ||||
Age: 64 Director Since: 2015 Committees: Audit, Risk Current Public Company Directorships: Automatic Data Processing, Inc., The Home Depot, Inc., and WGL Holdings, Inc. (WGL) and Washington Gas Light Company, a subsidiary of WGL | ||||
|
Joseph Jimenez, Chief Executive Officer, Novartis AG (since 2010) |
||||
| ||||
Age: 57 Director Since: 2015 Committees: Executive Compensation, Governance and Corporate Responsibility Current Public Company Directorships: None Prior Public Company Directorships: Colgate-Palmolive Company (2010 to 2015) | ||||
|
Senior Leadership Industry Manufacturing Technology Risk Management Global Finance Government Marketing Diversity
|
19 |
ITEM 1: ELECTION OF DIRECTORS
Jane L. Mendillo, Retired President & Chief Executive Officer, Harvard Management Company (since 2014) | ||||
| ||||
Age: 58 Director Since: 2016 Committees: Audit, Finance Current Public Company Directorships: Lazard Ltd
|
||||
|
Admiral Michael G. Mullen, Former Chairman, Joint Chiefs of Staff (since 2011) | ||||
| ||||
Age: 70 Director Since: 2013 Committees: Audit, Executive, Risk (Chair) Current Public Company Directorships: Sprint Corporation
|
||||
|
Senior Leadership Industry Manufacturing Technology Risk Management Global Finance Government Marketing Diversity
20 |
|
ITEM 1: ELECTION OF DIRECTORS
|
James J. Mulva, Retired Chairman & Chief Executive Officer, ConocoPhillips (since 2012) | |||||
| ||||||
Age: 70 Director Since: 2012 Committees: Executive, Executive Compensation, Finance (Chair), Risk Current Public Company Directorships: General Electric Company Prior Public Company Directorships: Statoil ASA (2013 to 2015) | ||||||
|
|
Patricia F. Russo, Chairman, Hewlett Packard Enterprise Company (since November 2015) |
|||||
| ||||||
Age: 64 Director Since: 2009 Committees: Executive, Executive Compensation, Finance, Governance and Corporate Responsibility (Chair) Current Public Company Directorships: Arconic Inc. (formerly Alcoa) (Lead Director), Hewlett Packard Enterprise Company (Chairman), KKR Management LLC (the managing partner of KKR & Co. L.P.), and Merck & Co. Inc. Prior Public Company Directorships: Hewlett-Packard Company (2011 to 2015), where she was Lead Director from 2014 to 2015 | ||||||
|
Senior Leadership Industry Manufacturing Technology Risk Management Global Finance Government Marketing Diversity
|
21 |
ITEM 1: ELECTION OF DIRECTORS
Thomas M. Schoewe, Retired Executive Vice President & Chief Financial Officer, Wal-Mart Stores, Inc. (since 2011) | ||||
| ||||
Age: 64 Director Since: 2011 Committees: Audit (Chair), Executive, Finance, Risk Current Public Company Directorships: KKR Management LLC and Northrop Grumman Corporation Prior Public Company Directorships: PulteGroup, Inc. (2009 to 2012) | ||||
|
|
Carol M. Stephenson, Retired Dean, Ivey Business School, The University of Western Ontario (since 2013) |
|||
| ||||
Age: 66 Director Since: 2009 Committees: Executive, Executive Compensation (Chair), Governance and Corporate Responsibility Current Public Company Directorships: Ballard Power Systems, Inc., Intact Financial Corporation (formerly ING Canada), and Maple Leaf Foods Inc. Prior Public Company Directorships: Manitoba Telecom Services (2008 to 2016) | ||||
|
Senior Leadership Industry Manufacturing Technology Risk Management Global Finance Government Marketing Diversity
22 |
|
ITEM 1: ELECTION OF DIRECTORS
Non-Employee Director Compensation
Compensation for our non-employee directors is set by the Board at the recommendation of the Governance Committee. Ms. Barra, our sole employee director, does not receive additional compensation for her Board service other than the personal accident insurance benefit described below, the value of which is reported for Ms. Barra in the Summary Compensation Table on page 63.
The Governance Committee, which consists solely of independent directors, annually assesses the form and amount of non-employee director compensation and recommends changes, if appropriate, to the Board based upon competitive market practices. Commencing in 2016, the Governance Committee reviewed director compensation data for the same companies that comprise the peer group we use for benchmarking executive compensation, as described on page 46. The process for setting non-employee director compensation is guided by the following principles:
u | Guiding Principles |
u | Fairly compensate directors for their responsibilities and time commitments, |
u | Attract and retain highly qualified directors by offering a compensation program consistent with those at companies of similar size, scope, and complexity, |
u | Align the interests of directors with our shareholders by providing a significant portion of compensation in equity and requiring directors to continue to own our common stock (or common stock equivalents), and |
u | Provide compensation that is simple and transparent to shareholders. |
The Governance Committee can engage the services of outside consultants, experts, and others to assist the Committee. During 2016, the Governance Committee did not engage any consultants in reviewing and setting director compensation.
u | Director Stock Ownership and Holding Requirements |
In December 2016, the Board approved an increase in the stock ownership requirement by $100,000, so that each non-employee director is required to own our common stock or Deferred Share Units (DSUs) with a market value of at least $500,000.
u | Ownership guidelines are reviewed each year to confirm they continue to be effective in aligning the interests of the Board and our shareholders. |
u | Non-employee directors are prohibited from selling any GM securities or derivatives of GM securities, such as DSUs while they are members of the Board. |
u | Each non-employee director is required to own our common stock or DSUs with a market value of at least $500,000. |
u | Each director has up to five years from the date he or she is first elected to the Board to meet this ownership requirement. |
u | All of our directors are in compliance with our stock retention requirements. Ms. Gooden and Ms. Mendillo are within their five-year compliance period and are expected to meet the ownership requirement by the end of such period. All other directors have met or exceeded the ownership requirement. |
u | Annual Compensation |
During 2016, compensation for non-employee directors consisted of the elements described below. We do not pay any other retainers or meeting fees. The Lead Director and Committee Chairs receive additional compensation due to the workload and broad responsibilities of these positions.
Compensation Element | 2016 | ||||
Board Retainer |
$ | 250,000 | |||
Lead Director Fee (1) |
$ | 100,000 | |||
Audit Committee Chair Fee |
$ | 30,000 | |||
Compensation Committee Chair Fee |
$ | 20,000 | |||
All Other Committee Chair Fees (excluding the Executive Committee) |
$ | 15,000 |
(1) | In 2016, Mr. Solso received an additional fee of $50,000 (i.e., the annual Chairman fee of $300,000 prorated for two months of service) for transitional services following Ms. Barras assumption of the Chairman role on January 4, 2016. Effective March 4, 2016, the additional fee paid to Mr. Solso for service as Lead Director is $100,000 per year. |
|
23 |
ITEM 1: ELECTION OF DIRECTORS
Under the General Motors Company Deferred Compensation Plan for Non-Employee Directors (the Director Compensation Plan), non-employee directors are required to defer 50% of their annual Board retainer (i.e., $125,000) into DSUs. Non-employee directors may elect to defer all or half of their remaining Board retainer or amounts payable (if any) for serving as Committee Chair or Lead Director into additional DSUs. The fees for a director who joins or leaves the Board or assumes additional responsibilities during the year are prorated for his or her period of service.
u | How Deferred Share Units Work |
Each DSU is equal in value to a share of GM common stock and is fully vested upon grant, but does not have voting rights. DSUs granted are determined as follows:
For a director who joined or retired from the Board during the calendar year, the retainer fee is prorated and converted to DSUs based on the average daily closing market price of our common stock for the period of service. All DSUs granted are rounded up to the nearest whole unit. Any portion of the retainer that is deferred into DSUs may also earn dividend equivalents, which are credited at the end of each calendar year to each directors account in the form of additional DSUs. DSUs will not be available for disposition until after the director leaves the Board. After leaving the Board, the director will receive a cash payment or payments based on the number of DSUs in the directors account, valued at the average daily closing market price for the quarter immediately preceding payment. Directors will be paid in a lump sum or in annual installments for up to five years based on their deferral elections.
u | Changes to Director Compensation |
In December 2016, the Governance Committee determined that the Companys director compensation program was below the median for director compensation at peer group companies and recommended that certain increases be made to fairly compensate directors for their responsibilities and time commitments and to align with competitive market practices. Following the recommendation of the Governance Committee, the Board approved the following changes to non-employee director compensation, effective January 1, 2017:
| An increase in the annual retainer for Board service from $250,000 to $285,000 with 50% (or $142,500) mandatorily deferred into DSUs; and |
| An increase in the annual retainer for the Chairs of the Governance, Finance, and Risk Committees from $15,000 to $20,000. |
u | Other Compensation |
As outlined below, we provide certain additional benefits to non-employee directors.
Type | Purpose | |
u Evaluation Vehicles |
We provide directors with the use of evaluation vehicles to provide feedback on our products as well as enhance the public image of our vehicles. Retired directors receive the use of an evaluation vehicle for a limited period of time. Participants are charged with imputed income based on the lease value of the vehicles and are responsible for associated taxes. | |
u Personal Accident Insurance (PAI) |
We provide PAI coverage in the event of accidental death or dismemberment. Directors are responsible for associated taxes on the imputed income from the coverage. |
Amount of compensation required or elected to be deferred each calendar year under the Director Compensation Plan Average daily closing market price of our common stock for that calendar year DSUs Granted
24 |
|
ITEM 1: ELECTION OF DIRECTORS
Unless previously employed by the Company, non-employee directors are not eligible to participate in any of the savings or retirement programs for our employees. Other than as described in this section, there are no separate benefit plans for directors.
u | 2016 Non-Employee Director Compensation Table |
This table shows the compensation that each non-employee director received for his or her 2016 Board and Committee service. Amounts reflect partial-year Board service for Mr. Girsky and Ms. Mendillo.
Director
|
Fees Earned or Paid in Cash(1) ($)
|
Stock Awards(2) ($)
|
All Other Compensation(3) ($)
|
Total ($)
|
||||||||||||
Joseph J. Ashton
|
|
62,500
|
|
|
208,517
|
|
|
30,323
|
|
|
301,340
|
| ||||
Stephen J. Girsky (4)
|
|
62,500
|
|
|
71,561
|
|
|
21,266
|
|
|
155,327
|
| ||||
Linda R. Gooden
|
|
125,000
|
|
|
139,012
|
|
|
20,157
|
|
|
284,169
|
| ||||
Joseph Jimenez
|
|
|
|
|
278,023
|
|
|
21,740
|
|
|
299,763
|
| ||||
Kathryn V. Marinello (5)
|
|
|
|
|
279,347
|
|
|
15,990
|
|
|
295,337
|
| ||||
Jane L. Mendillo (6)
|
|
|
|
|
158,836
|
|
|
4,995
|
|
|
163,831
|
| ||||
Michael G. Mullen
|
|
125,000
|
|
|
155,700
|
|
|
24,740
|
|
|
305,440
|
| ||||
James J. Mulva
|
|
|
|
|
294,712
|
|
|
25,219
|
|
|
319,931
|
| ||||
Patricia F. Russo
|
|
125,000
|
|
|
155,700
|
|
|
18,698
|
|
|
299,398
|
| ||||
Thomas M. Schoewe
|
|
155,000
|
|
|
139,012
|
|
|
28,532
|
|
|
322,544
|
| ||||
Theodore M. Solso
|
|
|
|
|
426,302
|
|
|
17,407
|
|
|
443,709
|
| ||||
Carol M. Stephenson
|
|
72,500
|
|
|
219,631
|
|
|
12,657
|
|
|
304,788
|
|
(1) | Reflects cash compensation received in 2016 for Board and Committee service. |
(2) | Reflects aggregate grant date fair value of DSUs granted in 2016, including amounts that Mss. Marinello ($125,000), Mendillo ($72,917), Russo ($15,000), and Stephenson ($72,500) and Messrs. Ashton ($62,500), Jimenez ($125,000), Mullen ($15,000), Mulva ($140,000), and Solso ($258,333) elected to defer into DSUs in lieu of all or a part of their cash compensation. Grant date fair value is calculated by multiplying the number of DSUs granted by the closing price of GM common stock on December 30, 2016, which was $34.84. The holders of DSUs also receive dividend equivalents which are reinvested in additional DSUs based on the market price of the common stock on the date the dividends are paid. |
(3) | The following table provides more information on the type and amount of benefits included in the All Other Compensation column. |
Director
|
Company Vehicle Program (a)
|
Other (b)
|
Total
|
Director
|
Company Vehicle Program (a)
|
Other (b)
|
Total
|
|||||||||||||||||||||||
Mr. Ashton
|
|
$30,083
|
|
|
$240
|
|
|
$30,323
|
|
Mr. Mullen
|
|
$24,500
|
|
|
$240
|
|
|
$24,740
|
| |||||||||||
Mr. Girsky
|
|
$21,146
|
|
|
$120
|
|
|
$21,266
|
|
Mr. Mulva
|
|
$24,979
|
|
|
$240
|
|
|
$25,219
|
| |||||||||||
Ms. Gooden
|
|
$19,917
|
|
|
$240
|
|
|
$20,157
|
|
Ms. Russo
|
|
$18,458
|
|
|
$240
|
|
|
$18,698
|
| |||||||||||
Mr. Jimenez
|
|
$21,500
|
|
|
$240
|
|
|
$21,740
|
|
Mr. Schoewe
|
|
$28,292
|
|
|
$240
|
|
|
$28,532
|
| |||||||||||
Ms. Marinello
|
|
$15,750
|
|
|
$240
|
|
|
$15,990
|
|
Mr. Solso
|
|
$17,167
|
|
|
$240
|
|
|
$17,407
|
| |||||||||||
Ms. Mendillo
|
|
$ 4,875
|
|
|
$120
|
|
|
$ 4,995
|
|
Ms. Stephenson
|
|
$12,417
|
|
|
$240
|
|
|
$12,657
|
|
(a) | Company vehicle program includes the estimated annual lease value of the Company vehicles driven by directors. We include the annual lease value because it is more reflective of the value of the company vehicle perquisite than the Companys incremental costs, which are generally significantly lower because the Company manufactures and ordinarily disposes of Company vehicles for a profit, resulting in minimal incremental costs, if any. Taxes related to imputed income are the responsibility of each participant. |
(b) | Reflects cost of premiums for providing personal accident insurance (annual premium cost of $240 is prorated, as applicable, for period of service). |
(4) | Mr. Girsky resigned from the Board effective June 7, 2016. |
(5) | Ms. Marinello resigned from the Board on December 19, 2016. |
(6) | Ms. Mendillo joined the Board on June 7, 2016. |
|
25 |
✓
|
Nine (9) out of eleven (11) directors are independent
|
✓
|
Director-Shareholder Engagement Policy
| |||||
✓
|
Strong Independent Lead Director with clearly delineated duties
|
✓
|
Regular executive sessions of non-management directors
| |||||
✓
|
Annual election of all directors
|
✓
|
Orientation program for new directors and continuing education for all directors
| |||||
✓
|
Majority voting with director resignation policy (plurality standard to apply in contested elections)
|
✓
|
Robust stock ownership guidelines for executive officers and non-employee directors
| |||||
✓
|
Annual evaluation of CEO by Board
|
✓
|
Risk oversight by full Board and Committees
| |||||
✓
|
Annual Board and Committee self-evaluations, including individual Board member evaluation
|
✓
|
Shareholder right to call special meetings
| |||||
✓
|
Audit, Executive Compensation, and Governance Committees composed entirely of independent directors
|
✓
|
Board and Committees may hire outside advisors independently of management
| |||||
✓
|
Overboarding limits
|
✓
|
Proxy access for shareholders
| |||||
✓
|
Diverse Board in terms of gender, ethnicity, and specific skills and qualifications
|
✓
|
Enhanced clawback policy that applies to our short- and long-term incentive plans
|
26 |
|
CORPORATE GOVERNANCE
Winning With Integrity and Code of Ethics
Corporate Governance Guidelines
|
27 |
CORPORATE GOVERNANCE
28 |
|
CORPORATE GOVERNANCE
Strong Independent Lead Director
If a GM executive holds the position of Chairman, our independent directors, by the affirmative vote of a majority of all independent directors, designate one of our independent Board members to serve as Independent Lead Director. For 2017, the Board has appointed Mr. Solso as Independent Lead Director for the second consecutive year. The duties and responsibilities of our Independent Lead Director, Mr. Solso, include the following:
|
29 |
CORPORATE GOVERNANCE
Our non-management directors have an opportunity to meet in executive session without management present as part of each regularly scheduled Board meeting. Executive sessions are chaired by the Independent Lead Director, Mr. Solso.
During executive sessions, non-management directors (or independent directors, as appropriate) review CEO performance, compensation, and succession planning; future Board agendas and flow of information to directors; corporate governance matters; any other matters of importance to the Company raised during a meeting or otherwise; and other issues presented by non-management directors.
The non-management directors of the Board met in executive session five times in 2016, including one time with only independent directors present.
Our Board of Directors has six standing Committees: Audit, Executive Compensation, Finance, Governance, Risk, and Executive. The Independent Lead Director, Mr. Solso, attends all meetings of the standing Committees of which he is not a member and serves as a resource for the Committees as needed.
Each member of the Audit, Compensation, and Governance Committees has been determined by the Board to be independent according to NYSE Corporate Governance listing standards. The following outlines the key responsibilities and 2016 activities of each standing Committee. Each Committee has a charter governing its activities. Committee Charters are available on our website at gm.com/investors, under Corporate Governance.
AUDIT
|
Members: Thomas M. Schoewe (Chair), Linda R. Gooden, Jane L. Mendillo, and Michael G. Mullen Meetings held in 2016: 8
| |||
Thomas M. Schoewe, Chair |
Key Responsibilities
u Oversees the quality and integrity of our financial statements, related disclosures, and internal controls;
u Reviews and discusses with management and the external auditors the Companys earnings releases and quarterly and annual reports on Forms 10-Q and 10-K prior to filing with the SEC;
u Reviews the Companys critical accounting policies, financial reporting and accounting standards and principles, and key accounting decisions and judgments affecting the Companys financial statements;
u Oversees the retention, qualifications, performance, and independence of the independent auditor;
u Pre-approves all audit and permitted non-audit services provided by the independent auditor;
u Reviews the scope, effectiveness, and objectivity of the Companys internal audit function; and
u Oversees the Companys compliance with legal, ethical, and regulatory requirements. |
Key Activities in 2016
u Approved internal audit plan with focus on the highest risks facing the organization;
u Approved expanded Global Ethics and Compliance Center resources and budget, enhancing scope and exceeding requirements of the U.S. Federal Sentencing Guidelines;
u Approved newly revamped code of conduct and ethics, Winning With Integrity;
u Reviewed emerging accounting and internal control matters, including revenue recognition, leasing and financial instrument credit losses;
u Monitored the disclosure of significant accounting matters and business developments and the overall effectiveness of the Companys disclosures;
u Reviewed the Companys earnings releases and quarterly and annual reports, including financial statements, on Forms 10-Q and 10-K prior to filing with the SEC; and
u Provided thought leadership and perspective to the SEC, including on non-GAAP measures.
|
Our Board has determined that each member of the Audit Committee is independent under the NYSE listing standards and the additional independence requirements applicable to audit committee members under NYSE and SEC rules. The Board has also determined that all members of the Audit Committee are financially literate in accordance with the NYSE listing standards and that Ms. Gooden, Ms. Mendillo, and Mr. Schoewe are each qualified as an audit committee financial expert as defined by the SEC.
30 |
|
CORPORATE GOVERNANCE
EXECUTIVE COMPENSATION
|
Members: Carol M. Stephenson (Chair), Joseph Jimenez, James J. Mulva, and Patricia F. Russo Meetings held in 2016: 6
| |||
Carol M. Stephenson, Chair |
Key Responsibilities
u Oversees the Companys executive compensation policies, practices, and programs;
u Reviews and approves corporate goals and objectives, evaluates performance (along with the full Board), and determines compensation levels for the Chairman & CEO;
u Reviews and approves compensation of NEOs, executive officers, and other Senior Leaders under its purview;
u Oversees compensation policies and practices so that the plans do not encourage unnecessary or excessive risks; and
u Oversees the Companys policies and practices that promote diversity and inclusion. |
Key Activities in 2016
u Approved STIP changes to increase focus on key financial measures and added an individual performance element for each NEO;
u Approved LTIP changes to incorporate relative performance measures into PSUs and replaced time-based RSUs with Stock Options to further align our most Senior Leaders with shareholder interests;
u Approved an expanded Clawback Policy to include reputational harm or other behavior-based events that result in a material inaccuracy in either financial statements or performance metrics that affect executive compensation; and
u Conducted significant shareholder engagement during 2016 to seek investor feedback on executive compensation plans and programs.
|
Our Board has determined that each member of our Compensation Committee is independent in accordance with NYSE listing standards and our Corporate Governance Guidelines, as well as the enhanced independence requirements applicable to compensation committee members under NYSE Rule 303A.02. In addition, each member of our Compensation Committee qualifies as a non-employee director under Rule 16b-3 of the Exchange Act and an outside director under Section 162(m) of the Internal Revenue Code.
GOVERNANCE
|
Members: Patricia F. Russo (Chair), Joseph Jimenez, and Carol M. Stephenson Meetings held in 2016: 5
| |||
Patricia F. Russo, Chair |
Key Responsibilities
u Reviews the Companys corporate governance framework, including all significant governance policies and procedures;
u Oversees Company policies and strategies related to corporate responsibility, sustainability, and political contributions;
u Reviews the appropriate composition of the Board and recommends Board nominees;
u Oversees the self-evaluation process of the Board and Committees;
u Recommends compensation of non-employee directors to the Board; and
u Reviews and approves related party transactions and any potential Board conflicts of interest, as applicable. |
Key Activities in 2016
u Oversaw shareholder engagement program on environmental, social, governance, and executive compensation issues;
u Reviewed the Board leadership structure and determined a combined Chairman and CEO role remained in the best interest of shareholders;
u Reviewed the Companys sustainability and corporate responsibility initiatives;
u Reviewed the Companys global corporate philanthropy initiatives;
u Recommended and oversaw implementation of best practice corporate governance initiatives, including proxy access; and
u Enhanced orientation and continuing education opportunities for directors.
|
Our Board has determined that each member of our Governance Committee is independent in accordance with the NYSE listing standards and our Corporate Governance Guidelines.
|
31 |
CORPORATE GOVERNANCE
FINANCE
|
Members: James J. Mulva (Chair), Joseph J. Ashton, Jane L. Mendillo, Patricia F. Russo, and Thomas M. Schoewe Meetings held in 2016: 5
| |||
James J. Mulva, Chair |
Key Responsibilities
u Assists the Board in its oversight of financial policies, strategies, and capital structure;
u Reviews the Companys cash management as well as proposed capital plans, capital expenditures, dividend actions, stock splits and repurchases, issuances of debt or equity securities, and credit facility and other borrowings;
u Reviews any significant financial exposures and contingent liabilities of the Company, including foreign exchange, interest rate, and commodities exposures, and the use of derivatives to hedge those exposures; and
u Reviews the regulatory compliance, administration, financing, investment performance, risk and liability profile, and funding of the Companys U.S. employee benefit plans, including pension obligations.
|
Key Activities in 2016
u Reviewed capital allocation framework and approved, along with the full Board, an additional $5.0 billion in share repurchases;
u Approved, along with the full Board, the Companys 2017 Budget, Medium Term Plan, and Automotive Capital Plan and GM Financials Annual Funding Plan;
u Reviewed progress against GM Financials full captive strategy;
u Reviewed pension funding and investment strategy; and
u Reviewed Companys foreign exchange exposure and overall risk management and hedging strategy.
|
All members of the Finance Committee are non-employee directors, a majority of whom have been determined by our Board to be independent in accordance with the NYSE listing standards and our Corporate Governance Guidelines.
RISK
|
Members: Michael G. Mullen (Chair), Joseph J. Ashton, Linda R. Gooden, James J. Mulva, and Thomas M. Schoewe Meetings held in 2016: 5
| |||
Admiral Michael G. Mullen, Chair |
Key Responsibilities
u Assists the Board in its oversight of the Companys risk management framework and practices;
u Reviews the tone and culture within the Company regarding risk, including open risk discussions and the integration of risk management in the Companys behaviors, decision-making, and processes;
u Reviews managements evaluation of strategic and operating risks the Company faces including risk concentrations, mitigating measures and the types and levels of risk which are acceptable in the pursuit and protection of value;
u Reviews the impact of the Companys programs and practices regarding vehicle and workplace safety; and
u Reviews risks related to the Companys public policy positions in the U.S. and internationally.
|
Key Activities in 2016
u Reviewed GMs key enterprise risks and mitigation plans for selected risks;
u Reviewed selected strategic risk pilots focused on cross functional and interrelated risks, including the Global Emerging Markets pilot that focused on risks associated with Process, People and Culture within the joint venture environment;
u Participated in risk assessment and reviewed results of GM risk assessment, top risks, and risk topics for Board oversight for 2017;
u Reviewed workplace safety program and roadmap; and
u Reviewed GM public policy risks and positioning on a global basis.
|
All members of the Risk Committee are non-employee directors, a majority of whom have been determined by our Board to be independent in accordance with the NYSE listing standards and our Corporate Governance Guidelines.
EXECUTIVE
|
Our Board has an Executive Committee composed of the Chairman & CEO, the Independent Lead Director, and the Chairs of our other standing Committees. The Executive Committee is chaired by Ms. Barra and empowered to act for the full Board in intervals between Board meetings, with the exception of certain matters that the Board has not delegated. The Executive Committee meets as necessary, and all actions by the Executive Committee are reported and ratified at the next succeeding Board meeting. The Executive Committee did not meet in 2016.
|
32 |
|
CORPORATE GOVERNANCE
The Board and each Board Committee can select and retain the services of outside advisors at the Companys expense.
Board and Committee Meetings and Attendance
In 2016, our Board held a total of 8 meetings and the Committees held a total of 29 meetings. Each director standing for re-election attended at least 94% of the total meetings of the Board and Committees on which he or she served in 2016. Directors are expected to attend our annual meeting of shareholders, which is held in conjunction with a regularly scheduled Board meeting. All directors in office at such time attended the 2016 Annual Meeting.
Board and Committee Oversight of Risk
Our Board has the overall responsibility for risk oversight, with a focus on the most significant risks facing the Company. Effective risk management is the responsibility of the CEO and other members of the Companys management, specifically the Executive Leadership Team. As part of the risk management process, each of the Companys business units and functions is responsible for identifying risks that could affect achievement of business goals and strategies, assessing the likelihood and potential impact of significant risks, and prioritizing the risks and actions to be taken to mitigate such risks, as appropriate.
Our Board implements its risk oversight function both as a whole and through delegation to Board Committees, particularly the Risk Committee. The Board receives regular reports from our management on particular risks within the Company, through review of the Companys strategic plan, and through regular communication with its Committees. Management provides comprehensive reports to the Risk Committee on the key strategic, operating, vehicle and workplace safety, financial, and compliance risks facing the Company, including managements response to managing and mitigating such risks, as appropriate. The Companys Chief Compliance Officer also regularly reports to the Audit Committee.
The Chair of the Risk Committee coordinates with the Chairs of other Board Committees in their review of the Company risks that have been delegated to these Committees to support them in coordinating the relationship between risk management policies and practices and their respective oversight accountabilities. Each of the other Board Committees, which meet regularly and report back to the Board, is responsible for oversight of risk management practices for categories of risks relevant to its functions.
Our Board believes that its structure for risk oversight provides for open communication between management and the Board and its Committees, which effectively supports managements enterprise risk management programs. In addition, strong independent directors chair the Committees involved in risk oversight, and all directors are involved in the risk assessment and ongoing risk reviews.
|
33 |
CORPORATE GOVERNANCE
Succession Planning and Leadership Development
Board and Committee Evaluations
The Board and each Committee conducts an annual self-evaluation to assess effectiveness and consider opportunities for improvement. As part of the evaluation process, each director completes a written questionnaire and is also interviewed by the Chairman and, if requested or needed, the Independent Lead Director. The results of the written questionnaires are compiled anonymously by the Corporate Secretary in the form of summaries for the full Board and each Committee. The feedback received from the questionnaires and interviews is reviewed and discussed by the Governance Committee (as it relates to both the Board and all Committees) and each other Committee (as it relates to such Committee). Following review and discussion by the Committees, the Chairman and Chair of the Governance Committee summarize the results of the evaluations and report to the full Board for discussion and any action items. In addition, the Chairman and, if applicable, the Independent Lead Director, provides feedback from the individual director interviews to the full Board.
Matters considered in evaluations include the following:
34 |
|
CORPORATE GOVERNANCE
Director Orientation and Continuing Education
Director Service on Other Public Company Boards
Compensation Committee Interlocks and Insider Participation
During 2016, and as of the date of this Proxy Statement, none of the members of the Compensation Committee was or is an officer or employee of the Company, and no executive officer of the Company served or serves on the compensation committee or board of any company that employed or employs any member of the Companys Compensation Committee or Board of Directors.
|
35 |
CORPORATE GOVERNANCE
Our Board is committed to governance structures and practices that increase shareholder value and protect important shareholder rights. Our Governance Committee regularly reviews these structures and practices, which include the following:
Certain Relationships and Related Party Transactions
Our code of business conduct and ethics, Winning with Integrity, requires all our employees and directors to avoid any activity that is in conflict with our business interests. In addition, our Board has adopted a written policy regarding the review and approval or ratification of related party transactions. Under this Policy, directors and executive officers must report any potential related party transactions (including transactions involving immediate family members of director or executive officers) to the General Counsel or Corporate Secretary.
For purposes of our Policy, a related party transaction includes transactions in which our Company is a participant, the amount involved exceeds $120,000, and a related party has or will have a direct or an indirect material interest. Related parties of our Company consist of directors (including nominees for election as directors), executive officers, shareholders beneficially owning more than 5% of the Companys voting securities (Significant Shareholders), and the immediate family members of these individuals.
When the Governance Committee is notified of a potential related party transaction it will determine whether the transaction does in fact constitute a related party transaction requiring compliance with this Policy and whether to approve a transaction.
u | Factors Used in Assessing Related Party Transactions |
Any member of the Governance Committee who has a potential interest in any related party transaction will recuse himself or herself and abstain from voting on the approval or ratification of the related party transaction, but may participate in all or a portion of the Governance Committees discussions of the related party transaction, if requested by the Chair of the Governance Committee. As required under SEC rules, we will disclose all related party transactions in our Proxy Statement.
36 |
|
CORPORATE GOVERNANCE
The following is the only related party transaction that occurred over 2016.
The son of John Quattrone, Senior Vice President, Global Human Resources, is employed by the Company in a non-executive position and in 2016 received compensation of approximately $137,000 and customary Company benefits. His total compensation is similar to the total compensation provided to other employees of the same level with similar responsibilities. The terms of his employment with GM were approved by the Governance Committee pursuant to the Companys Related Party Transactions Policy.
Our Board has adopted a U.S. Corporate Political Contributions and Expenditures Policy (Political Contributions Policy). The Political Contributions Policy, together with other policies and procedures of the Company, guides GMs approach to political contributions. We participate in the political process to help shape public policy and address legislation that impacts GM, our industry, and our shareholders. GM has a history of supporting and will continue to support public policies that work to drive or are necessary to furthering the achievement of our long-term, sustainable growth. As specified in its Charter, the Governance Committee oversees this policy and annually reviews the Companys engagement in the public policy process. The Committee also annually reviews all corporate political contributions as well as GM Political Action Committee (GM PAC) contributions and expenditures (which are funded entirely by voluntary employee contributions). The report includes information about contributions to political organizations known as section 527 organizations; corporate contributions to individual candidates for state and local office; and portions of dues or similar payments to trade associations and social welfare organizations, to the extent the dues or other payments equal or exceed $50,000 and are attributable to political purposes. In addition, on our website at gm.com/investors, under Corporate Governance a link to the Federal Election Commission website is provided, which details employee contributions to the federal GM PAC and the GM PACs contributions to candidates, party committees, and other PACs.
u | Engagement History and Commitment |
Our Board believes that fostering long-term and enterprise-wide relationships with our shareholders and maintaining their trust and goodwill is a core GM objective. In 2016, to demonstrate openness to investor feedback and input, our Board adopted a Director-Shareholder Engagement Policy, which contemplates both proactive engagement, in which shareholders are identified by the Board for selective engagement, and reactive engagement, with shareholders that seek to provide input to the Board and executive management on various matters. Following the 2016 Annual Meeting of Shareholders, members of the Board, including our Independent Lead Director and Compensation Committee Chair, met with 11 of our largest shareholders, representing approximately 25% of our outstanding common stock. These engagements routinely covered GMs strategic priorities; governance matters, such as Board leadership, succession planning and refreshment; executive compensation, including the link between corporate strategy and executive compensation; and corporate responsibility, environmental, social, and other current and emerging issues, so that the Board and management could understand and address the issues that are important to our shareholders. Additionally, during 2016, one or more members of management were involved in more than 50 in-person and telephonic meetings on these topics with investors representing more than 45% of shares outstanding.
u | Outreach and Our 2016 Say-on-Pay Vote |
During these engagements members of our Board and management discussed, among other things, GMs strategy and performance and the alignment of strategy and performance with executive compensation. The Compensation Committee evaluated feedback from these engagements and considered other factors used in assessing GMs executive compensation programs. Please see page 44 in this Proxy Statement for more information.
|
37 |
CORPORATE GOVERNANCE
Corporate Responsibility, Environmental and Sustainability Matters
We have a long-standing commitment to our shareholders and communities to operate in an environmentally and socially responsible manner. We are reducing our global carbon footprint, optimizing the efficiency and safety of our workplace, helping our customers reduce their own environmental footprints, and engaging with our suppliers to help them operate in more sustainable ways. To do this, we provide solutions all over the world in the form of improved and new types of products, innovation for existing products and services, and advanced technologies and manufacturing.
Placing the customer at the center of everything we do extends to both how we build our products and how we serve and improve our communities. When it comes to sustainability, we pursue outcomes that create value for all of our stakeholders.
38 |
|
SECURITY OWNERSHIP INFORMATION
Security Ownership of Directors, Named Executive Officers, and Certain Other Beneficial Owners
The beneficial ownership as of March 15, 2017, of our common stock by each director, each nominee for election to the Board, each NEO, and all directors and executive officers as a group is shown in the following tables, as well as ownership of Deferred Share Units and Deferred Salary Stock Units. Each of the individuals listed in the following tables owns less than 1% of the outstanding shares of our common stock; all directors and officers as a group own less than 1% of the outstanding shares. None of the shares shown in the following tables as beneficially owned by directors and executive officers is hedged or pledged as security for any obligation.
Non-Employee Directors
Director(1)
|
Shares of Common Stock Beneficially Owned
|
Deferred Share Units(2)
|
||||||
Joseph J. Ashton
|
|
500
|
|
|
14,872
|
| ||
Linda R. Gooden
|
|
1,000
|
|
|
7,701
|
| ||
Joseph Jimenez
|
|
32,330
|
|
|
12,944
|
| ||
Jane L. Mendillo
|
|
1,600
|
|
|
4,648
|
| ||
Michael G. Mullen
|
|
750
|
|
|
14,813
|
| ||
James J. Mulva
|
|
28,343
|
|
|
35,973
|
| ||
Patricia F. Russo
|
|
2,300
|
|
|
23,943
|
| ||
Thomas M. Schoewe
|
|
7,645
|
|
|
20,354
|
| ||
Theodore M. Solso
|
|
5,000
|
|
|
48,801
|
| ||
Carol M. Stephenson
|
|
800
|
|
|
43,207
|
|
(1) | c/o General Motors Company, 300 Renaissance Center, Detroit, Michigan 48265. |
(2) | Represents the unit equivalents of our common stock under the Director Compensation Plan described on page 23. |
Named Executive Officers and All Directors and Executive Officers as a Group
Beneficial Ownership |
||||||||||||
Name(1)
|
Shares of Beneficially Owned
|
Right to Acquire(2)
|
Total Number of Shares
|
|||||||||
Mary T. Barra
|
|
389,885
|
|
|
1,041,215
|
|
|
1,431,100
|
| |||
Charles K. Stevens, III
|
|
118,052
|
|
|
249,458
|
|
|
367,510
|
| |||
Daniel Ammann
|
|
275,953
|
|
|
390,456
|
|
|
666,409
|
| |||
Mark L. Reuss
|
|
208,052
|
|
|
331,888
|
|
|
539,940
|
| |||
Alan Batey
|
|
103,892
|
|
|
234,274
|
|
|
338,166
|
| |||
All Directors and Executive Officers as a Group (24 persons, including the foregoing)
|
1,490,111 | 3,574,473 | 5,064,584 |
(1) | c/o General Motors Company, 300 Renaissance Center, Detroit, Michigan 48265. |
(2) | Includes shares which the named individual or group has the right to acquire through the exercise of vested stock options, and shares which the named individual or group has the right to acquire through the vesting of restricted stock units and stock options within 60 days of March 15, 2017. |
|
39 |
SECURITY OWNERSHIP INFORMATION
Certain Beneficial Owners
The beneficial ownership, as of March 15, 2017, of our common stock by each person or group of persons who is known to be the beneficial owner of more than 5% of our outstanding shares is shown in the following table.
Name and Address of Beneficial Owner of Common Stock |
Number of Shares(1) |
Percent of Outstanding |
||||||
UAW Retiree Medical Benefits Trust, as advised by its fiduciary and investment advisor Brock Fiduciary Services LLC 200 Walker Street Detroit, MI 48207
|
|
140,150,000 |
|
|
9.3 |
% | ||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355
|
|
87,108,503 |
|
|
5.8 |
% | ||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055
|
|
78,315,411 |
|
|
5.2 |
% |
(1) | Number of shares and percentage of outstanding shares reported by each beneficial owner in filings with the SEC. The Company is permitted to rely on the information set forth in these filings and has no reason to believe that the information is incomplete or inaccurate or that the beneficial owner should have filed an amended report and did not. Each beneficial owner reported as follows: |
Entity/ Filing
|
Sole Voting Power
|
Shared Voting Power
|
Sole Dispositive Power
|
Shared Dispositive Power
|
||||||||||||
UAW Retiree Medical Benefits Trust (Sch. 13G, filed Feb. 11, 2014)
|
|
|
|
|
140,150,000 |
|
|
|
|
|
140,150,000 |
| ||||
The Vanguard Group (Sch. 13G, filed Feb. 13, 2017)
|
|
2,201,872 |
|
|
250,968 |
|
|
84,718,214 |
|
|
2,390,289 |
| ||||
BlackRock, Inc. (Sch. 13G, filed Jan. 30, 2017)
|
|
65,837,512 |
|
|
72,791 |
|
|
78,242,620 |
|
|
72,791 |
|
Section 16(a) Beneficial Ownership Reporting Compliance
40 |
|
Defined terms:
Executive Compensation Table of contents
|
41 |
EXECUTIVE COMPENSATION
u | Our Company Performance |
In 2016, we continued progress toward our goal of making GM the most valued automotive company for our shareholders. The results below demonstrate how we are positioning GM as an industry leader both now and in the future:
(1) | Refer to Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for a reconciliation of this non-GAAP measure to its closest comparable GAAP measure. |
u | Our Vehicle Launches |
We launched 42 vehicles across the globe in 2016, including some of the key vehicles below:
u | Our Named Executive Officers |
Mary T. Barra |
|
Chairman & Chief Executive Officer | ||
Charles K. Stevens, III |
|
Executive Vice President & Chief Financial Officer | ||
Daniel Ammann |
|
President | ||
Mark L. Reuss |
|
Executive Vice President, Global Product Development, Purchasing and Supply Chain | ||
Alan Batey |
|
Executive Vice President & President, North America |
42 |
|
EXECUTIVE COMPENSATION
We ended 2016 with the following key financial results:
(1) | Refer to Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for a reconciliation of this non-GAAP measure to its closest comparable GAAP measure. |
(2) | Assumes dividends are reinvested in common stock. |
u | Compensation Governance and Best Practices |
WHAT WE DO
| ||
ü | Provide short-term and long-term incentive plans with performance targets aligned to business goals | |
ü | Conduct annual advisory vote for shareholders to approve executive compensation | |
ü | Maintain a Compensation Committee composed entirely of independent directors | |
ü | Require stock ownership for all senior leaders (approximately 300) | |
ü | Conduct rigorous shareholder engagement by members of the Executive Compensation Committee, our Independent Lead Director, and management | |
ü | Include non-compete and non-solicitation terms in all grant agreements with all senior leaders | |
ü | Retain an independent executive compensation consultant to the Compensation Committee | |
ü | Maintain a Securities Trading Policy requiring directors, executive officers, and all other senior leaders to trade only during established window periods after contacting the GM Legal Staff prior to any sales or purchases of common stock | |
ü | Require equity awards to have a double-trigger (termination of employment and change in control) to initiate protection provisions of outstanding awards | |
ü | Complete incentive compensation risk reviews annually | |
ü | Maintain a strong clawback policy to apply to actions that damage GMs reputation | |
WHAT WE DONT DO
| ||
û | Provide gross-up payments to cover personal income taxes or excise taxes pertaining to executive or severance benefits | |
û | Allow directors or executives to engage in hedging or pledging of GM securities | |
û | Reward executives for excessive, inappropriate, or unnecessary risk-taking | |
û | Allow the repricing or backdating of equity awards |
|
43 |
EXECUTIVE COMPENSATION
u | Shareholder Engagement Initiatives |
We view shareholder engagement as an important and continuous cycle. Following the 2016 Annual Meeting of Shareholders, members of the Board, including our Independent Lead Director and Compensation Committee Chair, met with 11 of our largest shareholders, representing approximately 25% of our outstanding common stock. Additionally, during 2016, one or more members of management were involved in more than 50 in-person and telephonic meetings with investors representing more than 45% of shares outstanding. These discussions, say-on-pay voting results, and other factors are key drivers in assessing our compensation programs.
|
SHAREHOLDER SAY-ON-PAY The Compensation Committee seeks to align the Companys executive compensation program with the interests of the Companys shareholders. The Compensation Committee considers the results of the annual Say-On-Pay vote, input from management, input from its independent compensation consultant, and investor engagement initiatives when setting compensation for our executives. In 2016, 61.7% of our shareholders voted in favor of our compensation programs. This support was lower than the previous three years where shareholders supported compensation programs, with over 96% voting in favor during 2013 (98.7%), 2014 (96.9%) and 2015 (97.8%). During 2016, we held several discussions with some of our largest shareholders, as described above. In the sections below you will read what we heard, how we responded, and how our compensation plans have been modified to better align with the interests of shareholders.
|
The Company values investor feedback and will continue investor engagement initiatives to align our executive compensation programs with shareholder expectations. While we generally received positive feedback from shareholders during our engagement efforts, we made changes to our compensation plans that were effective at the start of 2017 in order to further align the interests of our senior leaders with those of our shareholders.
What We Heard
|
How We Responded
| |
Maintain pay for performance |
We continue to pay for performance with 72% of our CEOs compensation structure and on average 67% of other NEOs compensation structure linked to performance against pre-established measures. We set challenging goals for 2016 and the Company responded with all-time record performance in several key areas including revenue, EBIT-adjusted, Adjusted AFCF, and EPS-Diluted-Adjusted.
| |
Align compensation to the interests of shareholders |
Executives have the majority of their total compensation in the form of equity. Our STIP and PSUs both have metrics that create long-term shareholder value. Additionally in 2017, PSUs will feature both Relative ROIC-Adjusted and Relative TSR as performance measures for determining the amount of the award. Time-based RSUs previously provided to senior leaders have been replaced in 2017 with stock options to further align the interests of our senior leaders with those of our shareholders.
| |
Limit one-time broad-based awards |
We granted one-time DSV stock options in 2015 to introduce and secure non-compete and non-solicitation terms with all senior leaders in a highly competitive environment for automotive talent. Some investors expressed concerns with the DSV award but generally understood the need to secure these terms to retain talent. We did not grant any one-time, broad-based awards in 2016.
| |
Look at performance relative to automotive industry peers |
In 2017, our PSUs will measure both Relative ROIC-Adjusted and Relative TSR against the Companys OEM Peers to motivate our leaders to perform at the top of the industry regardless of business cycles.
| |
Simplify compensation plans |
We continue to evaluate both short-term and long-term compensation plans so that our executives line of sight is aligned with creating shareholder value. In 2017, STIP will be simplified to focus senior leaders on financial performance and will include an individual performance assessment measured against operational performance measures.
|
44 |
|
EXECUTIVE COMPENSATION
u | Compensation Program Evolution |
Our compensation programs have continued to align to shareholders by focusing our leaders on the key areas that both drive the business forward and align to the short-term and long-term interests of our shareholders. The Compensation Committee regularly reviews and discusses plan performance at each Compensation Committee meeting. The Compensation Committee considers many factors when electing to make plan changes for future incentive plans including forecasted results, market trends, and investor feedback. The table below shows how the compensation program has continued to evolve to align with shareholders.
|
45 |
EXECUTIVE COMPENSATION
The Company held engagements with investors and received feedback on changes to both the STIP and LTIP. The 2017 STIP continues a focus on important financial measures (75% of STIP) and individual performance (25% of STIP), the total payout will be 0% to 200% of target based on actual performance against pre-established goals. The Compensation Committee will determine individual performance using a rigorous assessment process measuring performance against pre-established operational and other measures. There will no longer be an additional individual performance modifier for the 2017 STIP.
The key change to the 2017 LTIP is to replace time-based RSUs with stock options as a way to further align our most senior leaders with our shareholders interest in stock price appreciation. Additionally, the Company changed PSU performance measures from ROIC-Adjusted with a global market share modifier to Relative ROIC-Adjusted (50% of total LTIP) and Relative TSR (25% of total LTIP) against OEMs in the Dow Jones Automobiles and Parts Titans 30 Index, listed below.
Dow Jones Automobiles & Parts Titans 30 Index OEM Peer Group
| ||||
Toyota Motor Company
|
Volkswagen AG | Suzuki Motor Corp. | ||
Daimler AG
|
Bayerische Motoren Werke AG | Fiat Chrysler Automobiles NV | ||
Ford Motor Company
|
Nissan Motor Co. Ltd | Tesla, Inc. | ||
Honda Motor Co. Ltd.
|
Renault SA | Mazda Motor Corp. | ||
General Motors Co.(1)
|
Hyundai Motor Co. | Kia Motors Corp. |
(1) | General Motors performance will be determined on a continuous ranking for performance relative to OEM Peers following the completion of the performance period. |
The percentile rank required for each performance level relative to OEM peers and associated payouts for PSUs are displayed below.
Focusing performance on key financial measures and individual operational performance measures in the short-term, combined with performance in both Relative ROIC-Adjusted and Relative TSR compared to our other OEM peers in the long-term, will provide direct alignment of our executive compensation with the interests of our shareholders and continue to focus our senior leaders on making the investments that will provide for profitable long-term growth.
u | Peer Group for Compensation Comparisons |
The Compensation Committee annually reviews the peer group for compensation comparisons and makes updates as needed to align with both the established criteria and Company strategy. We do not limit our peer group to our industry alone, because we believe compensation practices for NEOs at other large U.S.-based multinationals affect our ability to attract and retain diverse talent around the globe.
46 |
|
EXECUTIVE COMPENSATION
Company
|
Industry
|
Revenue
|
Significant
|
Capital Intensive
| ||||
3M Company
|
Industrial Conglomerates
|
X
|
X
|
X
| ||||
The Boeing Company
|
Aerospace and Defense
|
X
|
X
|
X
| ||||
Caterpillar Inc. |
Construction Machinery and Heavy Trucks
|
X |
X |
X | ||||
Deere & Company |
Agricultural and Farm Machinery
|
X
|
X
|
X
| ||||
The Dow Chemical Company |
Diversified Chemicals
|
X
|
X
|
X
| ||||
Du Pont |
Diversified Chemicals
|
X
|
X
|
X
| ||||
Ford Motor Company |
Automobile Manufacturers
|
X
|
X
|
X
| ||||
General Electric Company |
Industrial Conglomerates
|
X
|
X
|
X
| ||||
HP, Inc. |
Technology Hardware, Storage, and Peripherals
|
X |
X |
X | ||||
Honeywell International Inc. |
Aerospace and Defense
|
X
|
X
|
X
| ||||
IBM Corporation |
IT Consulting and Other Services
|
X
|
X
|
X
| ||||
Intel Corporation |
Semiconductors
|
X
|
X
|
X
| ||||
Johnson & Johnson |
Pharmaceuticals
|
X
|
X
|
X
| ||||
Johnson Controls Inc. |
Auto Parts and Equipment
|
X
|
X
|
X
| ||||
PepsiCo, Inc. |
Soft Drinks and Food
|
X
|
X
|
X
| ||||
Pfizer Inc. |
Pharmaceuticals
|
X
|
X
|
X
| ||||
The Procter & Gamble Company |
Household Products
|
X
|
X
|
X
| ||||
United Technologies Corp. |
Aerospace and Defense
|
X
|
X
|
X
|
u | How We Use Comparator Data to Assess Compensation |
We use executive compensation surveys comprised of a broad array of industrial companies to benchmark relevant market data for executive positions. In addition, we benchmark proxy statement disclosures of our peer group and adjust this data to reflect GMs size and market expected compensation trends. Further, we review the competitive market position of each of our executives compared with the market data.
We review each element of compensation compared to the market and generally target our total direct compensation (Base Salary, STIP, and LTIP) for the executive group on average to be at or near the market median. However, an individual element or an individuals total direct compensation may be positioned above or below the market median because of his or her specific responsibilities, experience, and performance.
|
47 |
EXECUTIVE COMPENSATION
u | How We Plan Compensation |
u | Performance-Based Compensation Structure |
Our NEOs are focused on optimizing long-term financial returns for our shareholders through increasing profitability, increasing margins, putting the customer at the center of everything we do, growing the business, and driving innovation.
The performance-based structure for 2016 incorporates both short-term and long-term incentives established from financial and operational metrics for fiscal year 2016 and beyond. In addition to base salary and an annual STIP award, this structure, shown graphically below, includes a LTIP award made up of both PSUs and RSUs to focus our executives on long-term Company performance. The Compensation Committee believes a majority of compensation should be in the form of equity to align the interests of executives with those of shareholders.
|
48 |
|
EXECUTIVE COMPENSATION
u | 2016 Compensation Structure |
Each NEOs 2016 compensation structure included the following pay elements:
| Base Salary NEOs are paid a market-competitive base salary that reflects each NEOs contribution, background, performance as well as the knowledge and skills he or she brings to the role; |
| STIP The STIP is an annual cash incentive plan. The STIP rewards each NEO based on the achievement of annual Company financial and operational performance goals and individual performance. The potential Company payout ranges from 0% to 200% of target, based on actual Company performance; |
| PSUs PSUs are equity awards designed to align each NEOs interests with the long-term interests of the Company and its shareholders. PSUs can be earned at a level from 0% to 200% of target, based on the actual Company performance against ROIC-Adjusted and Global Market Share targets over the three-year performance period beginning January 1, 2016; and |
| RSUs RSUs are time-based equity awards vesting ratably over a three-year period. RSUs align the interests of NEOs with shareholders and help to retain top talent. |
u | Perquisites, Benefits, and Other Compensation |
We provide perquisites, benefits, and other compensation to our NEOs consistent with market practices. The following perquisites, benefits, and other compensation were provided to NEOs in 2016:
| Personal Air Travel Ms. Barra is prohibited by Company policy from commercial air travel due to security reasons identified by an independent third-party security consultant. As a result, the Company pays the costs associated with the use of private aircraft for both business and personal use. Ms. Barra is permitted to be accompanied by guests for personal travel and incurs imputed income for all passengers, including herself, at the U.S. Internal Revenue Service (the IRS) Standard Industry Fair Level rates. Other NEOs may travel on private aircraft in certain circumstances with prior approval from the CEO or the Senior Vice President Global Human Resources, and also incur imputed income for any personal travel. |
| Company Vehicle Programs NEOs are eligible to participate in the Executive Company Vehicle Program and are allowed to use evaluation vehicles for the purpose of providing feedback on Company products. Additionally, NEOs are eligible to use driver services provided by the Company and in accordance with Company policies. |
| Security NEOs may receive security services, including home security systems and monitoring, for specific security-related reasons identified by independent third-party security consultants. |
| Financial Counseling NEOs are eligible to receive financial counseling, estate planning, and tax preparation services through approved providers. |
| Executive Physicals NEOs are eligible to receive executive physicals with approved providers. |
|
49 |
EXECUTIVE COMPENSATION
u | 2016 Target Compensation |
Our target total direct compensation for each NEO in 2016 was as follows:
Annual Base Salary ($)
|
STIP ($)
|
Target Total Cash Compensation ($)
|
LTIP
|
Target Total Direct Compensation ($)
|
||||||||||||||||||||||||
Name
|
PSUs ($)
|
RSUs ($)
|
||||||||||||||||||||||||||
Mary T. Barra
|
|
2,000,000
|
|
|
4,000,000
|
|
|
6,000,000
|
|
|
9,750,000
|
|
|
3,250,000
|
|
|
19,000,000
|
| ||||||||||
Charles K. Stevens, III
|
|
1,100,000
|
|
|
1,375,000
|
|
|
2,475,000
|
|
|
2,587,500
|
|
|
862,500
|
|
|
5,925,000
|
| ||||||||||
Daniel Ammann
|
|
1,450,000
|
|
|
1,812,500
|
|
|
3,262,500
|
|
|
3,525,000
|
|
|
1,175,000
|
|
|
7,962,500
|
| ||||||||||
Mark L. Reuss
|
|
1,200,000
|
|
|
1,500,000
|
|
|
2,700,000
|
|
|
2,925,000
|
|
|
975,000
|
|
|
6,600,000
|
| ||||||||||
Alan Batey
|
|
950,000
|
|
|
1,187,500
|
|
|
2,137,500
|
|
|
2,025,000
|
|
|
675,000
|
|
|
4,837,500
|
|
u | How We Set Performance Targets |
Annually, the Compensation Committee approves the performance measures for the STIP and LTIP. The Compensation Committee reviews recommendations from management, receives input from the Compensation Committee consultant, evaluates the annual budget and mid-term business plan, and reviews prior-year performance to approve value-creating goals tied to long-term shareholder value.
u | 2016 STIP Performance Measures for NEOs |
The STIP aligns with our plans to create the worlds most valued automotive company and to increase shareholder value. The STIP rewards NEOs for performance linked to the Companys achievement of annual financial goals, operational performance goals, and individual performance. The STIP is an annual cash incentive award intended to be deductible as performance-based compensation under U.S. Internal Revenue Code (IRC) Section 162(m) and is funded for each covered NEO once the Company achieves the threshold of positive EBIT-Adjusted.
The Compensation Committee annually reviews and approves STIP goals to assess the difficulty in level of achievement and overall linkage to shareholders through the achievement of the business plan and strategic objectives. For the 2016 STIP, all targets were set at or above final 2015 performance. The Committee elected to adjust the weights to increase EBIT-Adjusted to 40% and decreased Global Market Share to 10% to continue to focus leaders on profitability over market share. Setting challenging but achievable targets motivates our leadership team to deliver results that will benefit shareholders for the long-term.
Actual STIP awards, if any, are determined following the completion of the plan year to reflect the achievement against the performance measures displayed below. Awards can be further adjusted following a final assessment of individual performance. The table below describes each STIP performance measure, its weighting, its target, and the behaviors each measure drives:
STIP Measure
|
Weight
|
Target
|
Leadership Behaviors
| |||||||
EBIT-Adjusted
|
|
40
|
%
|
$
|
11.3
|
|
Focus on operating profit and driving strong profitability
| |||
Adjusted AFCF (1)
|
|
25
|
%
|
$
|
6.0
|
|
Focus on driving strong cash flow in the business
| |||
Global Market Share
|
|
10
|
%
|
|
11.3
|
%
|
Focus on continuing to grow in the global marketplace
| |||
Global Quality
|
|
25
|
%
|
|
Various Metrics
|
(2)
|
Focus on designing, engineering, and building the highest-quality products
|
(1) | Adjusted AFCF for incentive purposes excludes payments related to certain recall-related expenses attributable to events occurring in 2014. |
(2) | Global Quality is based on performance against the following measures: Loyalty (10% Weight), 12 Months-In-Service Warranty Frequency (15% Weight). |
50 |
|
EXECUTIVE COMPENSATION
The potential payouts for each performance measure range from 0% to 200% of target, based on actual Company performance with the threshold performance level being 50% of each STIP measure. The STIP calculation and the STIP targets for the 2016 performance period for each NEO are as follows:
Name
|
Base Salary
|
Target as % of Salary
|
Target STIP
|
|||||||||
Mary T. Barra
|
|
$2,000,000
|
|
|
200%
|
|
|
$4,000,000
|
| |||
Charles K. Stevens, III
|
|
$1,100,000
|
|
|
125%
|
|
|
$1,375,000
|
| |||
Daniel Ammann
|
|
$1,450,000
|
|
|
125%
|
|
|
$1,812,500
|
| |||
Mark L. Reuss
|
|
$1,200,000
|
|
|
125%
|
|
|
$1,500,000
|
| |||
Alan Batey
|
|
$ 950,000
|
|
|
125%
|
|
|
$1,187,500
|
|
u | 2016-2018 LTIP Performance Measures for NEOs |
Grants under the LTIP are intended to link the financial interests of NEOs with the long-term interests of shareholders. The structure for NEOs included 75% PSUs and 25% RSUs. PSUs cliff-vest following the three-year performance period, and RSUs vest ratably over three years.
|
51 |
EXECUTIVE COMPENSATION
The 2016-2018 PSUs are awarded based on performance against the following Company measures: ROIC-Adjusted and Global Market Share over the three-year performance period. Our 20% ROIC-Adjusted target is an enduring one, based on our commitments to our shareholders and appropriate for the cyclical nature of our industry. The PSU performance measures were chosen to promote both efficient use of capital and long-term growth to create value for the shareholders. The following table shows the PSU performance measures and the leadership behaviors that each drives to make GM the worlds most valued automotive company:
LTIP Measure
|
Weight
|
Target
|
Leadership Behaviors
| |||
ROIC-Adjusted (1) |
100% | 20% |
Focus on making sound investments that follow the disciplined capital approach of driving 20% or higher returns in world-class vehicles and leading technology
| |||
Global Market Share (2)
|
Modifier
|
(3)
|
Focus on continuing to grow in the global marketplace
|
(1) | The three-year average ROIC-Adjusted target is 20% and performance shall be calculated using the GM average annual ROIC-Adjusted for calendar years 2016, 2017, and 2018, where ROIC-Adjusted is calculated as Total Company EBIT-Adjusted divided by Average Total Company Net Assets. EBIT-Adjusted is defined as earnings excluding interest income, interest expense, and income taxes as well as certain additional adjustments. A discussion of EBIT-Adjusted, supplemental detail of all adjustments, and a reconciliation of EBIT-Adjusted (on a consolidated basis) to net income attributable to shareholders is disclosed in Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K. In addition, a reconciliation of GMs automotive segments EBIT-Adjusted and GM Financials EBIT-Adjusted, in each case, to total net sales and revenue is disclosed in Note 23 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Net Assets is determined based on the four-quarter average for the year, adding back average automotive debt and interest liabilities (except capital leases) and automotive net Pension and OPEB liabilities and excluding average automotive net income tax assets. |
(2) | The three-year average Global Market Share target range performance shall be calculated using the GM average annual global market share for calendar years 2016, 2017, and 2018 as reported by GM Global Sales Reporting and reflected in the Annual Reports on Form 10-K. |
(3) | The Performance Target for Global Market Share will be disclosed at the end of the three-year performance period, as future Global Market Share measures are not disclosed. |
PSUs, if any, vest and are awarded and delivered following the completion of the three-year performance period, January 1, 2016 December 31, 2018, and may be earned at a level between 0% and 200% of target based on actual Company results. Final PSU awards are calculated as follows:
52 |
|
EXECUTIVE COMPENSATION
When determining grant amounts, the Compensation Committee considers individual responsibilities, experience, and performance. Additionally, the Compensation Committee will factor in relevant market compensation comparison data and seek the input from their independent compensation consultant. The NEOs received the following equity grants as part of their 2016 structure:
PSUs(1) | RSUs(2) | |||||||||||||||||||||||||||||||
Name |
Total Granted |
Closing Price GM Stock on Grant Date ($/share) |
Units Granted |
% of Total Units |
Units Granted |
% of Total Units |
||||||||||||||||||||||||||
Mary T. Barra
|
|
469,146
|
|
|
27.71
|
|
|
351,859
|
|
|
75
|
%
|
|
117,287
|
|
|
25
|
%
| ||||||||||||||
Charles K. Stevens, III
|
|
124,504
|
|
|
27.71
|
|
|
93,378
|
|
|
75
|
%
|
|
31,126
|
|
|
25
|
%
| ||||||||||||||
Daniel Ammann
|
|
169,615
|
|
|
27.71
|
|
|
127,211
|
|
|
75
|
%
|
|
42,404
|
|
|
25
|
%
| ||||||||||||||
Mark L. Reuss
|
|
140,744
|
|
|
27.71
|
|
|
105,558
|
|
|
75
|
%
|
|
35,186
|
|
|
25
|
%
| ||||||||||||||
Alan Batey
|
|
97,439
|
|
|
27.71
|
|
|
73,079
|
|
|
75
|
%
|
|
24,360
|
|
|
25
|
%
|
(1) | PSUs cliff-vest based on performance following the three-year performance period January 1, 2016 December 31, 2018. |
(2) | RSUs vest ratably over a three-year period. |
u | Summary of Outstanding Performance Awards Granted in Prior Years |
|
53 |
EXECUTIVE COMPENSATION
Performance Results and Compensation Decisions
u | 2016 Short-Term Incentive Plan |
The Company portion of the 2016 STIP award was calculated based on the Companys achievement of the following performance measures: EBITAdjusted, Adjusted AFCF, Global Market Share, and Global Quality. Actual 2016 Company performance in the combined measures produced an overall payout of 169% based on the achievement of the following levels for each measure, as approved by the Compensation Committee. Both the results for EBIT-Adjusted and Adjusted AFCF were all-time record results for GM:
STIP Measure
|
Weight
|
Threshold
|
Target
|
Maximum
|
Performance Results
|
Performance Payout
|
||||||||||||||||||
EBIT Adjusted ($B)
|
|
40
|
%
|
|
$ 6.5
|
|
|
$11.3
|
|
|
$12.6
|
|
|
$12.5
|
|
|
77
|
%
| ||||||
Adjusted AFCF ($B)(1)
|
|
25
|
%
|
|
$ 0.0
|
|
|
$ 6.0
|
|
|
$ 7.0
|
|
|
$ 7.6
|
|
|
50
|
%
| ||||||
Global Market Share
|
|
10
|
%
|
|
10.8
|
%
|
|
11.3
|
%
|
|
11.5
|
%
|
|
10.8
|
%
|
|
5
|
%
| ||||||
Global Quality
|
|
25
|
%
|
|
Various Metrics
|
|
|
|
(2)
|
|
37
|
%
| ||||||||||||
Result
|
|
169
|
%
|
(1) | Adjusted AFCF for incentive purposes excludes payments related to certain recall-related expenses attributable to events occurring in 2014. |
(2) | Global Quality Measures for 2016 included: Loyalty (10% Weight Payout 19%) and 12 Months-in-Service Warranty Frequency (15% Weight Payout 18%). |
Individual performance may also influence final STIP awards. The compensation decision made for each individual executive is discussed beginning on the next page.
u | 2014-2016 Long-Term Incentive Plan |
The 2014-2016 PSU awards vested on February 11, 2017 based on Company performance for the period January 1, 2014 December 31, 2016 against pre-established performance targets for both ROIC-Adjusted and Global Market Share. The 2014-2016 PSU was the first performance award granted to NEOs under the performance based compensation program that was first introduced in 2014 following the Company exiting TARP in 2013. Actual performance produced an overall vesting of 195% of shares and the following performance was approved by the Compensation Committee:
LTIP Measure
|
Weight
|
Threshold
|
Target
|
Maximum
|
Performance
|
Performance
|
||||||||
ROIC-Adjusted
|
100%
|
16.0%
|
20.0%
|
24.0%
|
23.8%
|
|
195
|
%
| ||||||
Global Market Share
|
Modifier
|
11.3% - 11.7%
|
11.3%(1)
|
|
N/A
|
| ||||||||
Result
|
|
195
|
%
|
(1) | Excludes the impact of the Companys decision to exit unprofitable markets during 2015. |
Focusing our leaders on ROIC-Adjusted has resulted in significant performance improvements since calendar year 2012 when ROIC-Adjusted was 16.0%. We ended calendar year 2016 with a ROIC-Adjusted of 28.9%, representing more than an 80% increase in our performance.
54 |
|
EXECUTIVE COMPENSATION
|
55 |
2016 COMPENSATION STRUCTURE (in millions) AWARDED VALUE vs. REALIZED COMPENSATION (in millions) Awarded Value Realized Compensation
EXECUTIVE COMPENSATION
56 |
|
EXECUTIVE COMPENSATION
|
57 |
2016 COMPENSATION STRUCTURE (in millions) AWARDED VALUE vs. REALIZED COMPENSATION (in millions) Awarded Value Realized Compensation
EXECUTIVE COMPENSATION
58 |
|
EXECUTIVE COMPENSATION
|
59 |
2016 COMPENSATION STRUCTURE (in millions) AWARDED VALUE vs. REALIZED COMPENSATION (in millions) Awarded Value Realized Compensation
EXECUTIVE COMPENSATION
Compensation Policies and Governance Practices
u | Stock Ownership Requirements |
u | Policy on Recoupment of Incentive Compensation |
We have a corporate policy to recover incentive compensation paid to executive officers in cases where financial statements are restated because of employee fraud, negligence, or intentional misconduct. Under this clawback policy, which was last updated in late 2016 and is posted on our website, gm.com/investors, under Corporate Governance, if our Board or an appropriate Board Committee determines any bonus, retention award, or short or long-term incentive compensation has been paid to any executive officer based on materially inaccurate misstatement of earnings, revenues, gains, or other criteria, including reputational harm, the Board or Compensation Committee will take the action it deems necessary to recover the compensation paid, remedy the misconduct, and prevent its recurrence. For this purpose, a financial statement or performance metric will be treated as materially inaccurate when an employee knowingly engaged in providing inaccurate information or knowingly failed to timely correct information relating to those financial statements or performance metrics. We will continue to review our policy to ensure it is consistent with all legal requirements and in the best interests of the Company and its shareholders.
u | Securities Trading Policy |
Our securities trading policy prohibits our employees from buying or selling GM securities when in possession of material nonpublic information. Any sale or purchase of common stock by directors, executive officers, and all other senior leaders must be made during pre-established periods after receiving preclearance by a member of the GM Legal Staff or according to pre-approved Rule 10b5-1 plan.
Trading in GM derivatives (i.e., puts or calls), engaging in short sales, and pledging of GM securities is also prohibited. All GM executive officers are in compliance with the policy of not pledging any shares of common stock. This policy is posted on our website, gm.com/investors, under Corporate Governance.
u | Tax Considerations |
IRC Section 162(m) generally disallows federal tax deductions for compensation in excess of $1 million paid to the CEO and the next three of our highest-paid officers (other than the CFO) whose compensation is required to be reported in the Summary Compensation Table in this Proxy Statement (Covered Executives). Certain performance-based compensation is not subject to this deduction limitation. Generally, we strive to maximize the tax deductibility of compensation arrangements. The Compensation Committee, however, may award compensation that is not fully tax deductible if it deems it appropriate as compensation designed to attract and retain talented executives in the highly competitive market for talent.
STIP awards are paid based on the achievement of performance measures approved by shareholders in 2014 as part of the 2014 STIP. Because the STIP awards are intended to be deductible as performance-based compensation under 162(m), the
60 |
|
EXECUTIVE COMPENSATION
Compensation Committee set the maximum award for each Covered Executive at $7.5 million. Incentive amounts equal to the maximum will be funded for each Covered Executive once a threshold level of positive EBIT-Adjusted has been achieved. The Compensation Committee then exercises negative discretion, as needed, to determine actual incentive awards based on other business and individual performance, as described in the Short-Term Incentive Plan section of the CD&A.
u | Compensation Committee and Consultant Independence |
u | Compensation Risk Assessment |
During 2016, the Compensation Committee reviewed and discussed the impact of executive compensation programs on organizational risk. The Compensation Committee discussed plans and reviewed risk mitigation features in each of the plans to evaluate, with the assistance of our audit, legal and risk management organizations, the overall impact compensation programs have on organizational risk. The Compensation Committee determined compensation programs have sufficient risk mitigation features and do not encourage or reward employees for taking excessive or unnecessary risk. The mix of our short-term and long-term compensation programs appropriately reward employees while balancing risk through the delayed payment of long-term awards. As a result of the compensation risk review completed on September 12, 2016, the Compensation Committee determined the overall risk of compensation programs exposing the organization to unnecessary or excessive risks is low.
u | Employment and Termination Agreements |
The Company has no employment or termination agreements with any of our 2016 NEOs. All NEOs participate in the same Executive Severance Program available to other executive employees.
The Compensation Committee has reviewed and discussed with management the CD&A and, based on that review and discussion, has recommended to the Board of Directors that the CD&A be included in this Proxy Statement and incorporated by reference in the GM 2016 Annual Report on Form 10-K.
Compensation Committee
Carol M. Stephenson (Chair)
Joseph Jimenez
James J. Mulva
Patricia F. Russo
|
61 |
EXECUTIVE COMPENSATION
u | Summary Compensation Table |
Name and Principal Position(1)(2)
|
Year
|
Salary ($)
|
Bonus ($)
|
Stock Awards(3) ($)
|
Option Awards(4) ($)
|
Nonequity Incentive Plan Compensation(5) ($)
|
Change in Pension Value and NQ Deferred Compensation ($)
|
All Other ($)
|
Total ($)
|
|||||||||||||||||||||||||||
Mary T. Barra Chairman & Chief Executive Officer |
|
2016
|
|
|
2,000,000
|
|
|
|
|
|
13,000,036
|
|
|
|
|
|
6,760,000
|
|
|
181,777
|
|
|
640,246
|
|
|
22,582,059
|
| |||||||||
|
2015
|
|
|
1,750,000
|
|
|
|
|
|
12,000,004
|
|
|
11,167,029
|
|
|
3,062,500
|
|
|
12,012
|
|
|
597,118
|
|
|
28,588,663
|
| ||||||||||
|
2014
|
|
|
1,567,803
|
|
|
|
|
|
11,760,567
|
|
|
|
|
|
2,072,000
|
|
|
349,926
|
|
|
412,532
|
|
|
16,162,828
|
| ||||||||||
Charles K. Stevens, III Executive Vice President & Chief Financial Officer |
|
2016
|
|
|
1,100,000
|
|
|
|
|
|
3,450,007
|
|
|
|
|
|
2,673,800
|
|
|
135,146
|
|
|
244,132
|
|
|
7,603,085
|
| |||||||||
|
2015
|
|
|
1,000,000
|
|
|
|
|
|
2,875,049
|
|
|
2,675,437
|
|
|
1,375,000
|
|
|
|
|
|
176,738
|
|
|
8,102,224
|
| ||||||||||
|
2014
|
|
|
691,667
|