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US$10m package for failed GM boss

FORMER General Motors Corp Chairman and CEO Rick Wagoner will retire on August 1 with a pension and benefit package the auto maker valued at more than US$10 million.

Wagoner, 56, who was ousted by the Obama administration on March 30, will get US$1.64 million in benefits annually for each of the next five years, plus an annual pension of US$74,030 for the rest of his life, according to company documents filed with the US Securities and Exchange Commission.

The former CEO, who spent 32 years with the company, can also choose to cash in his company-provided life insurance policy at US$2.6 million.

The benefits are worth about half the US$22.1 million value the company placed on Wagoner's retirement package at the end of 2008. The severance package is also smaller than those afforded to many other large-company CEOs in the past, before the market meltdown made compensation practices a touchstone for public and congressional outrage.

Lee Raymond, former chairman of energy giant ExxonMobil, received a nearly US$400 million retirement package in 2006.

Stan O'Neal, ousted from Merrill Lynch in 2007 after the investment bank reported a huge quarterly loss, walked away with US$161.5 million in stock, options and retirement benefits.

Walt Disney Co directors awarded a US$140 million severance package to Michael Ovitz at the end of his brief stint in the mid-1990s as president of the entertainment company.

Wagoner's package comes at a time when the company slashed benefits for most of its retirees, including eliminating vision and dental coverage. Health benefits for blue-collar retirees also are at risk because they will soon be paid by a union trust largely funded by stock in the new GM.

In the past four years, GM racked up more than US$80 billion in losses as the recession and high gas prices cut into its sales.

Wagoner was ousted after the Obama administration rejected a GM restructuring plan and ordered deeper cuts.

Last Friday, the auto maker emerged from a 40-day stay in bankruptcy protection with its best assets moving to a new company called General Motors Co.

The US government now owns more than 60 percent of the new company.


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