GM Slashing Dividend/Executive Salaries to Try to Survive

GM is not having a good year, and yesterday they took further action (at the prompting of new Board member Kirk Kirkorian) to try and stop the bleeding:

General Motors Corp. (GM) Tuesday cut its dividend for the first time in more than 13 years as it struggles to save money after a year of billions of dollars in losses.

GM's board of directors cut the dividend to an annual rate of $1 a share, saving about $565 million a year.

At the same time, Chairman and Chief Executive Rick Wagoner will see his salary cut in half, while Vice Chairmen John Devine, Robert Lutz and Fritz Henderson will see their salaries cut by 30 percent.

The world's largest automaker lost $8.6 billion in 2005 as it struggled with high labor and raw material costs, loss of U.S. market share to foreign rivals, and sluggish sales of sport utility vehicles, its biggest generator of profits.

"GM's announced cut both to the dividend and to executive pay is not a big surprise," said Tim Ghriskey, chief investment officer of Solaris Asset Management. "Cuts like this were important to negotiations with the unions for similar types of cuts in unionized pay structure."

GM also made changes to the health-care benefits and retirement benefits of its salaried employees.

Meanwhile, Toyota's profits are up 34%.