General Motors Co. handed out its first stock options since
emerging from bankruptcy in 2009, awarding grants to about 300 top
executives based on their ability to deliver shareholder returns in
line with industry peers and other factors.
Part of the company's long-term incentive plan, the options were
granted this week. The stock awards are designed to retain top
executives through noncompete clauses and tie compensation to
company performance, a spokesman said, and were awarded as quickly
as possible following shareholder approval last year.
Chief Executive Mary Barra was awarded 2.6 million options with
a $31.32 strike price, gradually vesting over a four-year period
beginning in 2017. She earned $16.4 million in her first year at
the helm, during which she steered the company through a costly
ignition-switch recall crisis and set lofty margin targets for the
107-year-old company.
GM President Dan Ammann received 976,139 options with the same
conditions, according to a regulatory filing. GM's head of global
product development Mark Reuss received 829,719 options, Chief
Financial Officer Chuck Stevens received 623,645; and GM Europe
President Karl-Thomas Neumann received 585,684.
The size of other awards for GM's top 300 executives wasn't
disclosed.
The $31.32 price is based on the value of GM's shares as of
Tuesday, and is in the lower end of the $28.82 to $38.99 range the
stock has set over the past 52 weeks. The company filed bankruptcy
in 2009 following a long financial decline, and went public again
in 2010 with shares valued at $33.
GM last week reported solid earnings growth in the second
quarter, with net income growing to $1.1 billion compared with $278
million in the same period a year earlier. The performance was
fueled by 10.5% margins in North America and continued profit in
China despite a market slowdown in its wider auto industry.
The options will vest in tranches, with 40% available in
February 2017. The remaining 60% vesting over the following three
years in 20% annual installments, provided GM's total shareholder
returns meet or exceed the median for 14 competing auto
manufacturers. Shares must be exercised by July 2025.
The awards carry noncompete and nonsolicitation restrictions,
preventing executives from joining a competitor or recruiting other
GM employees to follow them for one year after they leave the
company.
Write to Gautham Nagesh at gautham.nagesh@wsj.com
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