GM free of government control underscores industry comeback

Potential Successors

GM said in April that it adjusted the compensation mix for Akerson in 2012 because of the possibility he may retire before his long-term restricted stock vests in three years. At least four executives, including Reuss, 50; Mary Barra, 51, head of global product development; and Chief Financial Officer Daniel Ammann, 41, have been mentioned as CEO contenders.

Akerson has signaled that retirement is on the horizon and has said he prefers his successor comes from within to avoid disruption.

“The board will decide what’s best for the company,” GM said in an e-mailed statement yesterday. “We’re very comfortable with our succession plans which we have in place for all our key officials.”

The U.S. government’s GM stake has fallen to about 2.2%, with the Treasury’s statement yesterday that it had completed the sale of 70.2 million shares under a third previously announced plan.

“If average daily trading volumes continue at recent levels, Treasury anticipates that it will complete the sale of its remaining shares by the end of the year,” the government said.

The U.S. has recovered $38.4 billion of the $51 billion it spent to bail out and restructure GM, the Treasury said.

‘Second Chance’

“While the U.S. Treasury’s equity stake draws to a close, our work to transform GM continues,” GM said yesterday in an e- mailed statement. “We’re making great progress in our efforts to make the most of this second chance by building outstanding cars and trucks, creating jobs and reinvesting in our country.”

The Canadian government still owns 7.9% of GM and a United Auto Workers health-care trust has 10%, according to data compiled by Bloomberg. GM doesn’t face any governance restrictions on pay or other activities from those holdings.

The new freedom “could allow GM’s management to return capital to shareholders in early 2014,” Joseph Amaturo, an analyst at New York-based Buckingham Research Group, said yesterday in a note to clients. He said that an 80 cents-a-share annual dividend is a possibility, and that a payout of that amount would cost GM about $1.2 billion a year.

GM’s last quarterly common dividend was in June 2008, said Dave Roman, a company spokesman.

‘Decent Return’

“This board understands our shareholders are in here to get a decent return on their money,” Akerson told analysts on an October conference call.

“We understand what we’re here for and one of them is to return money to our shareholders,” he said on the call. “And that will be a continuing theme not only this quarter, but the next year and the year after.”

If GM doesn’t move quickly to return money to shareholders, either through a dividend or a share repurchase, the automaker may face activist investors trying to force the action, said Harry J. Wilson, founder of restructuring adviser Maeva Group LLC in Westchester, New York, and a former member of the Obama auto task force that helped restructure GM.

“They will be watched very closely,” Wilson said in an interview. “They need to focus on improving operating margins, continue to invest in new product and create a more efficient use of capital.”

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