The real cost of a golden parachute

Allan Sloan is a senior editor-at-large at Fortune

TEXT OF INTERVIEW

Steve Chiotakis: It's been a week since General Motors CEO Rick Wagoner stepped
aside at the request of the Obama administration. And since then, we've seen this figure, $21 million, being thrown out as a value of his so-called severance package. But the words severance and value are in the eye of the beholder.

Let's talk to Fortune Magazine's Allan Sloan about this. Allan, you say Rick Wagoner didn't get the golden parachute everyone thinks he did?

Allan Sloan: Well, it turns out that A. General Motors, for whatever reason, had a deal with his chief executive that said, "You will not get a severance package if you quit or get fired," which is very, very unusual. The thing that interests me is I keep reading that Wagoner is getting a $20 [million] or a $21 million package as he leaves GM, and that's really not true.

Chiotakis: Well why is it not true?

Sloan: Because except for $360,000 -- which again is not chicken feed to your or me or most of the people listening, but in corporate America it's chicken feed -- except for $360,000 or so, the rest of it is two pensions and the bigger of the two is one he's unlikely to ever get.

Chiotakis: So Allan, is this another example of our sort of outrage mentality?

Sloan: I think that's right. THere are these two pensions that Wagoner has, one of which pays something like $69,000 a year to him and his wife, you know, for the rest of their lives. That income is valued by GM at about a million dollars. But the rest of it is a very large what they call non-qualified pension, and he's very unlikely to get anything resembling the $19 million it's valued at because it's in what's known in the trade as an unsecured obligation of General Motors, and if the company goes into bankruptcy or some sort of reorganization, all or almost all that money's going to be toast.

Chiotakis: Are there other severance packages like this?

Sloan: This is a very unusual thing. Wagoner, to his personal credit, obviously decided that he would live without it and apparently never made a fuss. I mean, it is a sign of class, and since there are very few people saying anything even remotely decent about Wagoner, I thought I would throw that in.

Chiotakis: All right. Fortune Magazine's Allan Sloan joining us. Thanks, Allan.

Sloan: You're welcome, Steve.

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