Earlier this week General Motors announced that Chris Liddell would be taking over the duties of Chief Financial Officer, replacing the ‘kinda’ outgoing Ray Young, who has been displaced to GM’s international operation.
GM CEO Ed Whitacre had this to say of his new subordinate, “Chris brings a depth and experience to this job that were unmatched in our search for a new financial leader. Chris will lead our financial and accounting operations on a global basis and will report directly to me. We’re also looking to his experience and insights in corporate strategy as a member of the senior leadership team in helping our restructuring efforts.”
Curiously, Mr. Liddell has been CFO of Microsoft for the past four years, and on the surface this move would seem to be lateral, or even a demotion of sorts considering GM’s past and current woes, especially in relation to size, stability and safety of Microsoft.
This brings us to a couple of questions, why and how much? As in why would he make the move, and just how much is he making at GM…given the salary cap of $500,000 imposed on TARP receiving company’s executives.
Did GM CEO Whitacre indeed get concessions from pay czar Kenneth Feinberg to hire new talent from the outside the company at a premium price over the 500K?
At the time of the press release, GM spokespersons declined to comment on whether or not GM had gotten such lenience from the government, but they said the company might post more information in a regulatory filing in the future.
However, that fiscal information blackout lasted about 48 hours, as word trickled out just before Christmas Eve that Mr. Liddell would be the first new GM exec to break the government’s back and receive a annual salary of $750,000…and a $3.45 million dollar (in stock) bonus payable in 2012, plus an additional $2 million if GM can repay the $6.7 billion it owes to the US government. (Of interest GM already has this money in a escrow account earmarked to pay the government back in the very near future…and that money was actually put there by the government itself just a few months ago) /Can anyone say ‘money in the bag?’
While the amount of compensation the new GM CFO will make does seem significant at first blush, in context it does not represent a pay hike for Chris, as he earned $3,701,199.00 (according to Forbes) in 2009 with Microsoft.
While Mr. Liddell’s GM contract is certainly front loaded, if he sees his job through until the bonuses pays out in 2012, he will have earned approximately $7.7 million for 3 years of service, which is likely considerably less than he would have made toiling under another demanding (yet similar in style) CEO at Microsoft, Steve Ballmer.
So why the move? Why leave the juggernaut of profitability and cash flow that is Microsoft, and the near monopoly they enjoy over a industry…for GM, a company whose future is far from certain?
There can be only one reason. The CEO job is his to lose…or at least that is what he has been promised.
(Or maybe he got tired of Windows crashing his PC and he just really wanted to switch platforms bad)
This entry was posted on Saturday, December 26th, 2009 at 9:13 am and is filed under Financial. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
+2
Dec 26th, 2009 (9:18 am)Thanks Statik, interesting info.
+3
Dec 26th, 2009 (9:20 am)When you are talking about salaries that big, does it really matter? How much money does someone really need?
Dec 26th, 2009 (9:21 am)Sounds like the “promotion is his to lose”, is right on track. Interesting that the Govt would wiggle it’s own “guidelines” (ahem). I wish him well in his new position(s), and hope that he sees the value in the Volt program that we do.
Happy New Year,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
Dec 26th, 2009 (9:23 am)I think it matters when you are talking about the limited number of people seen as able to do the job. It’ll also matter when he’s negotiating his NEXT salary (the promotion). JMO.
Merry Christmas,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
+3
Dec 26th, 2009 (9:24 am)It’s hard to believe, to attract the best, a company has to pay that kind of money!
+4
Dec 26th, 2009 (9:35 am)Maybe he was not doing so well at Microsoft and was being shown the door. I don’t understand why bean counters get paid so much, not nearly as demanding as being in charge of production, or new design etc.
+3
Dec 26th, 2009 (9:51 am)If he’s been around at Microsoft for a while, then his salary there is meaningless, since his main compensation would be stock. So he’s probably very wealthy.
So I guess I’m agreeing with you. He doesn’t need the money. He probably got bored at Microsoft, and wanted a change.
I’m also encouraged in general by the management shakeup at GM. They had too many in-breed execs that had been there for life. Much better to get some new blood from the outside, and now’s the time to do it.
As for detailed experience in the car business, I’m not sure it’s necessary. Some of the best managers I’ve ever had didn’t know much about the details, but they knew how cut through the BS and get the relevant details from their subordinates, and that’s what you need to make good decisions.
Dec 26th, 2009 (9:51 am)I hope this strategy works as well as it did for ford when they got mulally from Boeing. Lyle how about an interview with him on his opinion of volt and potentially losing cash on every one sold
+1
Dec 26th, 2009 (9:57 am)Fresh blood at GM, good or bad? Who knows, from software to the rust belt it sure will be a change. Do they really need that much money? I do not know, how do they do against others, like Senators or sports stars? How about Movie Stars or Stock Brokers? Teachers and Surgeons? Anyway I hope GM will build another car for me,if I could afford it, I like their stuff. As I like to say there is a lot of money out there. Follow the money. Thanks Statik.
Dec 26th, 2009 (10:17 am)I wonder if this means that GM will be setting up content business models for GM vehicles. Since they will now have display screens in the center consoles, it seems a great opportunity for GM to become a content provider, like a cable TV system, phone company, internet provider, etc.
Yikes, someone could actually be streaming webcam vids into their vehicles – that’s worse than being on a cellphone.
-5
Dec 26th, 2009 (10:22 am)Good article, until you got to the end. That was just a plain, stupid statement.
Dec 26th, 2009 (10:24 am)There’s an angle I hadn’t thought about! Please, please, please don’t let that be true. I’m not ready for commercials popping up on my car’s console.
Happy New Year!,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
Dec 26th, 2009 (10:26 am)Bringing in an outsider works, except when it doesn’t. It has recently worked for Ford in a big way with Mulally, but it hasn’t worked before. The Board may be more important for long term success than the CEO. If there is any lesson to be learned lately it’s that CEOs who dominate their Board’s can easily go off track and, of course, can’t easily be replaced when they do (Scrushy, Ebbers, etc. etc.).
As for the pay issue, statik makes a good point about pay being relative to what the person is already making, though in truth the problem is that “grade inflation” has not only occurred at universities, so it’s hard to use current pay scales as a standard.
All that said, wishing all the NA based car companies and the country a better 2010!
Dec 26th, 2009 (10:28 am)Without fiscal controls, any company will be doomed. I would wager (especially in GM’s position) that the CFO position is more important to the existence of the company than any other.
I don’t know about GM, but, the IS/IT department usually is under finance (or is very closely aligned). In manufacturing and materials these days, you just can’t do it without IS.
Having a CFO from the largest software company in the world is an EXECELLENT choice imho.
+1
Dec 26th, 2009 (10:42 am)Robert it was just a joke.
Happy New Year!,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
Dec 26th, 2009 (10:43 am)Dear Statik,
Please ask your friend Mr. Lutz if atmospheric CO2 concentration is affected by global warming and not the other way around as so many people, including ersatz “scientists”, misunderstand.
Thank you – God bless you and Happy Holidays.
Dec 26th, 2009 (10:47 am)You are indeed right about the breakdown of his compensation at MSFT. I originally was going to detail it all out in the article, but I was also trying to keep it tight…so ended up dropping it.
Here is the breakdown for those interested:
Salary: $561,667.00
Bonus: $595,018.00
Restricted stock awards: $2,533,665.00
All other compensation: $10,849.00
Total Compensation $3,701,199.00
+1
Dec 26th, 2009 (10:51 am)I could live for over a week on that kind of money (g). Congrats to him! Personally, I’d like to see GM pay back the govt money and then get on with their business independently. JMO.
Happy New Year!,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
+5
Dec 26th, 2009 (10:58 am)So now GM can really benefit from using a “Windows Model” for controlling their cars.
These come to mind:
1) “To shutdown your car, press the Start Button…”
2) “An exception error has occurred. Please fasten your seat belts!”
3) Blue Screen of Death now has some teeth to it.
4) Every time you put the car in reverse, a annoying pop-up ad appears, “Purchase an electronic camera for your car. Save the children”
5) While driving through the mountains in pouring rain at night, you get a notification that “Your GM user interface is experiencing problems and will shutdown your car. Would you like to send a report to GM?” (You WOULD like to SEND them something, but a report doesn’t quite cut it).
6) “A new navigator has been detected. Installing new “driver”…Please wait. You will need to shutdown your car (see #1), before the new “driver” will operational. If you experience any problems after installing this new “driver”, please uninstall and then re-install your “driver”" (Warning: Installation of this new “driver” may cause unexpected behavior and can cause system “crashes” to occur. Are you sure you want to continue?”)
+1
Dec 26th, 2009 (11:15 am)______________________________________________________
#19 JEC,
LOL & 100% on target!….and I’ll see some of those type of messages here as soon as I click Submit Comment; (getting IE8 crash each time I post here)…
______________________________________________________
Dec 26th, 2009 (11:16 am)Use Firefox.
Happy New Year!,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
Dec 26th, 2009 (11:23 am)I don’t like it when bean-counters take over the CEO positions. To me it seems they have trouble seeing past the #’s and lack the vision necessary for that position. If Liddell does take over, I hope he gets his head out of the balance sheets and actually directs the company towards the future of the auto industry.
Dec 26th, 2009 (11:26 am)I don’t know,
If I go to start my Volt and get the “blue screen of death”, or that annoying swirling toilet bowl….I’m going to get torqued!
Dec 26th, 2009 (11:27 am)4 Tagamet Says:
December 26th, 2009 at 9:23 am
Kdawg: When you are talking about salaries that big, does it really matter? How much money does someone really need?
——
I think it matters when you are talking about the limited number of people seen as able to do the job. It’ll also matter when he’s negotiating his NEXT salary (the promotion). JMO.
Merry Christmas,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
——————-
If you were Tiger Woods (worth 1billion) and were getting paid 50 million to play golf, would you give up golf and go play baseball for 51 million?
At what point does the money not factor into what you do? It seems these millionaire/billionaire people would sell their soul for another $5. I’d rather have someone who’s heart is actually in the position. Maybe (hopefully) Liddell’s is.
Dec 26th, 2009 (11:28 am)I think that it’s a safe bet that the software is already in place and is only being tweaked at this point.
Happy New Year!,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
Dec 26th, 2009 (11:29 am)I heard Liddell’s days were numbered at Microsoft; rumor has it that he was found to use a Mac for his personal databank.
If he’s learned a lesson, he’ll sell his Mercedes quickly and replace it with a Caddy.
+2
Dec 26th, 2009 (11:31 am)If GM wants to clean house then a better choice would have been Chuck Liddell of the UFC.
Dec 26th, 2009 (11:35 am)I’m not sure that Tiger Woods is a good example to use regarding “priorities”. He certainly wasn’t thinking about his salary (or his family) when he boarded the bimbo train.
Regarding the “when is enough money enough” question, I think that that is a very personal thing and for some people, you are correct – they’d step over their mother to pick up $5 – but I don’t think that those people are limited to the rich. Our church lost a minister who left for a bit more money – and I can assure you it wasn’t a lot of money. JMO.
Happy New Year!,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
Dec 26th, 2009 (11:53 am)Tag,
But will the Volt have a “firefox” equivalent?
I use firefox for everything (except when I deal with MS updates).
I despise IE. The layout and the icons MS decided to use just drives me nuts. The tabbed browsing just seems to also, not work as well or is as intuitive as firefox.
+1
Dec 26th, 2009 (11:58 am)I may be wrong, but I’d assumed that the Volt’s software is proprietary and written specifically for the Volt’s needs – not an off the shelf platform like Windows. I certainly HOPE that it wasn’t farmed out to another company like Microsoft.
Happy New Year!,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
+1
Dec 26th, 2009 (12:00 pm)You’re right. It was intended as a joke. But, it was still a cheap shot!
Happy New Year!
Estero
+1
Dec 26th, 2009 (12:16 pm)http://www.microsoft.com/presspass/exec/liddell/default.aspx
Liddell holds an Engineering Degree with honors from the University of Auckland, New Zealand and a Master of Philosophy degree from Oxford University in England.
He has served as director of the New Zealand Rugby Union, governor of the New Zealand Sports Foundation…
…has completed a number of triathlons, including an Ironman…
=D~
+2
Dec 26th, 2009 (12:29 pm)Liddell probably wants the challenge of turning GM around, and he has a good chance with the new GM.. they seem to have a good lineup of cars and have shed a lot of debt.. hopefully they will regain agility for the coming years. The future will be turbulent for the car companies as we transition to an electric vehicle economy.
If he gets the job done, he will go into the history books.
Dec 26th, 2009 (12:46 pm)The only reason anyone would make a move like that is because he knew his time was up (days were numbered), (his ticket was about to expire), (change was coming), (out grew his welcome) at Microsoft.
Pick one.
NPNS!
Dec 26th, 2009 (12:49 pm)If competing in the Ironman is any indication, he sure love a challenge! Helping GM chart a successful course should equal or exceed his past challenges, but as you suggest, I think he’s being dealt a win-able hand.
Happy New Year!,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
Dec 26th, 2009 (12:53 pm)Yes. I agree. Good leaders need vision.
+1
Dec 26th, 2009 (1:19 pm)Kdawg: When you are talking about salaries that big, does it really matter? How much money does someone really need?
________________________________
I used to think that. When it’s more money than you could ever spend, what’s the difference? However, I think many people like the bragging rights, they want to buy 6 Castle’s in Spain like Nicholas Cage, and they want their grand children and great grand children to never want for anything.
That being said…
_____________________________
Dave K: http://www.microsoft.com/presspass/exec/liddell/default.aspx
Liddell holds an Engineering Degree with honors from the University of Auckland, New Zealand and a Master of Philosophy degree from Oxford University in England.
He has served as director of the New Zealand Rugby Union, governor of the New Zealand Sports Foundation…
…has completed a number of triathlons, including an Ironman…
______________________
Sounds like a guy who wants to do great things and leave a great legacy in the few short years any of us have on earth, and wouldn’t be happy working at a company like Microsoft where there is virtually no competition and only 3 or 4 meaningful products….BORING!
He wants the excitement of being CFO/CEO of a company pulling itself out of the depths of the abyss and coming back with guns blazing competing in a global industry as complex, diverse, competitive and strategic as any out there.
Dec 26th, 2009 (1:40 pm)I think he wants a challenge more than the money. I don’t think his days were numbered at MSFT. IMO this is a smart move by GM.
It seems most people on this forum agree that some kind of a culture shakeup is needed at GM. Coming from MSFT, Liddell is sure to bring some of MSFT culture with him. Hands-on management, less bloat, aggressive pricing, transparency, accountability, fiscally sound management, heavy R&D investment, bottom up product design, etc are all things GM could benefit from.
+1
Dec 26th, 2009 (1:43 pm)Liddell announced his departure from Microsoft on November 24th, which is before GM let Fritz Henderson go. He wanted to “expand his opportunities beyond being CFO.” So, this definitely sounds to me like this was about being CEO of a major company. And GM still qualifies.
http://blogs.barrons.com/techtraderdaily/2009/11/24/microsoft-cfo-liddell-leaving-replaced-by-peter-klein/
By all reports, he was very good at his job. And he did do a major amount of cost cutting (which the current CFO at microsoft plans to continue). I just hope he doesn’t bring Microsoft’s mindset to GM. And I’m not happy that, unlike Mulally he doesn’t have any manufacturing experience.
Dec 26th, 2009 (1:48 pm)Wonder if Liddell’s first move will be to put Sync and Wifi in the Volt?
..kidding . . .. . sort of
Dec 26th, 2009 (1:51 pm)(Or maybe he got tired of Windows crashing his PC and he just really wanted to switch platforms bad)
HAHA! I love it!
So Liddell… Are you a Mac?
Dec 26th, 2009 (2:00 pm)While I agree with you that Liddell probably wants the challenge more than the money, you have a much more optimistic view of microsoft’s culture than I do. Accountability? At Microsoft? They probably have less bloat than GM, but they’re hardly anyone’s example of “lean.” They did run their first ever cost cutting/layoff operation last year (at Liddell’s direction), but still…Fiscally sound sure–but it’s very easy to be fiscally sound when you have windows to fall back on.
http://www.businessweek.com/magazine/content/05_39/b3952001.htm
Dec 26th, 2009 (2:09 pm)Liddel’s departure from Microsoft was a mild shocker. Here is what Microsoft says about Liddell.
http://www.microsoft.com/presspass/exec/liddell/
The best way to look at Liddell is not as a Microsoft guy (he was there only for 4 years – and very un-microsoft years given lower profits, 5,000 layoffs etc). Look at his background.
He has exp in manufacturing. By education he is an engr. He has been a CEO.
And he has green credentials.
Dec 26th, 2009 (2:19 pm)Wrong. I’d say he is ambitious and knew he would never become CEO of Microsoft.
http://seattletimes.nwsource.com/html/microsoftpri0/2010347665_microsoftcfochrisliddellleavingpeterkleinstepsin.html
http://blog.seattlepi.com/microsoft/archives/186205.asp
And this is what the new CFO says … he is unlikely to mention Liddell if he was being fired …
Dec 26th, 2009 (2:37 pm)Well, that sounds like manufacturing. Although I’m not sure making paper has a lot to do with making cars?
For the record–as CFO, he’s definitely an asset. At least, IMHO. It’s CEO that I’m nervous about. Although I suppose he’s an improvement from Whitacre. And it’s not like there are too many Mulally’s running around..
Dec 26th, 2009 (2:51 pm)I second your apprehension. People may compare him to Mulally at Ford but I’m not sure that is accurate. Manufacturing planes is much closer to making cars than are software programs. You don’t want so much of an “outsider” that he doesn’t know what is going on. Although perhaps this is just my natural aversion as an engineer to bean-counters leading companies.* R&D must be vigorously supported or else the company will tank in the future. I hope Gm’s management understands this.
*Then again, when ex-engineers lead companies they do tend to have bad tendencies of their own, like getting sidetracked on science projects that make no sense for the bottom line.
Dec 26th, 2009 (3:08 pm)Try Tools pulldown, select Compatibility View. SHould stop the problem.
-13
Dec 26th, 2009 (3:19 pm)(click to show comment)
Dec 26th, 2009 (3:21 pm)Thanks, I have that problem too.
I guess I feel better about Liddell after reading more about his past accomplishments. I just have a fear of bean counters making decisions purely on short term profit and not on long term success. It does look like he has his sights on CEO, but I am sure he will have to earn that position by performance as CFO.
Dec 26th, 2009 (3:38 pm)I can see no relevance between the Microsoft experience and being CFO at GM. Totally different business models.
However, from the GM press release, I notice that Liddell has an Engineering degree and has worked at both International Paper and the largest forest product company in New Zealand.
http://media.gm.com/content/media/us/en/news/news_detail.brand_gm.html/content/Pages/news/us/en/2009/Dec/1221_Liddell
These industries don’t manufacture large assemblies like GM or Boeing, however, they are VERY focused on production. This experience, along with his engineering background, makes me feel more comfortable with him, because, as others have said, it’s not always good to have a CFO/CEO who is a pure accountant.
GM learned this 2 decades ago when they lost focus on the product and were too focused on cost.
Dec 26th, 2009 (3:39 pm)What the hell brought that on???
Lithium Mangenese Polymer batteries are clearly the best available technology at this time, Ford and Toyota are playing catch up in this regard. Toyota for years has maligned all lithium batteries because they made a huge investment in NiMH, not because NiMH is better. Toyota has now decided that the new plug-in Pirus is to be Lithium-ion.
From edmonds.com Toyota said that its “first-generation” lithium-ion battery developed for the Prius Plug-In has undergone more than a million miles of field testing in Japan, North America and Europe and has been “deemed both reliable and durable.”
Dec 26th, 2009 (5:22 pm)That’s quite a generalization! Not sure that it is even close to being accurate given what others have posted about his education, experience, etc.
Dec 26th, 2009 (5:24 pm)Just a few posts and we get a pretty interesting biography of the guy, and a troll. Suitably skewered too. Thanks.
Dec 26th, 2009 (5:28 pm)Do you know this to be true? Or, is that just another rumor?
Did you know that Windows can be run on a Mac?
Dec 26th, 2009 (8:11 pm)It seems to me it is going to be tough to become CEO of gm when coming from Microsoft, as one will lack any experience or memory of critical parts of the business, such as the relationship with unions, or the relationships with diverse suppliers, or multiple manufacturing sites around the world. Not only does one lack specific knowledge, one doesn’t know the key people or the points of special sensitivity. International Paper sells to a lot of people but it is vertically integrated and does not buy much from others. So I wish him well, but I think it is going to be hard.
Dec 26th, 2009 (9:19 pm)What nonsense ! What is a “personal databank” anyway ?! BTW, Microsoft has a large Mac software division and its IT supports Macs on the campus (like connecting to corporate wireless network etc).
PS : As any finance guy can tell you – the only thing they want is Excel
+1
Dec 26th, 2009 (10:19 pm)Yes.
And more generally, once something becomes successful, it’s very hard to get people to to toss it for something else.
Now let’s remember that the gas engine has been hugely successful. For this reason, most people will resist changing away from gas engines.
But if you can somehow make a product that keeps the old way of doing things and offers a new way as an option, then many people will go for it. This is why I think the Volt will be successful. It doesn’t force people to plug in, but it gives them that choice.
So get ready GM, demand is going to be way higher than you think…
Dec 26th, 2009 (10:33 pm)Yes, I think you’re right. It’s not just about money. He wants fame and fortune, and being CFO of Microsoft doesn’t really get you the spotlight.
Dec 26th, 2009 (10:40 pm)Yes, well said.
Remember that they make most of their money on Microsoft Office, not Windows, and Office also runs on Mac:
http://www.amazon.com/Microsoft-Office-2008-Home-Student/dp/B000X86ZAS/qid=1261885002
Dec 26th, 2009 (10:48 pm)Right.
As I said before, some fo the best managers I’ve ever had didn’t know much of the details coming in, but they knew how to cut through the BS and get the relavent details from their subordinates, and that’s what it takes to make good decisions.
Dec 26th, 2009 (11:23 pm)Most embedded software these days has some sort of off-the-shelf operating system, but it’s nothing like Windows. Usually just enough to launch a few tasks, communicate between tasks, handle interrupts, and time events. Probably something more like VxWorks:
http://www.windriver.com/products/vxworks/
or QP
http://www.state-machine.com/
Dec 27th, 2009 (12:06 am)Thanks, Dave G.
Happy New Year!
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
+1
Dec 27th, 2009 (8:05 am)This is truly GREAT news to me.
Chris has a house near me (same city), except his is on the sea front. and we went to the same university, so if I go bang on his door over the holidays, maybe we can have the Volt over here quicker than it was looking before?
/Well I can dream.
Dec 27th, 2009 (10:24 am)[...] Continued at GM-Volt.com [...]
Dec 27th, 2009 (3:14 pm)Our church lost a minister who left for a bit more money – and I can assure you it wasn’t a lot of money.
When someone leaves their job, they will give 3 reasons. The first one is more money.
The first two reasons don’t count in the decision.
Dec 27th, 2009 (10:19 pm)Lots of people coming and going at GM lately.
Don’t know whether that’s a good thing or bad.
These are very trying times indeed, lets hope 2010 is a good year for GM.
Dec 28th, 2009 (12:00 pm)Well I dunno, but I’m hoping for the best. There are a LOT of hard core “car guys” in NZ, for whatever that’s worth. I’m with Guy in hoping for the best in 2010.
Come on Mr. Liddell:
LJGTVWOTR!!