Liz Swain 4:24 p.m., May 24
Whitacre Wrong Choice for GM, Says Graef Crystal
Former San Diegan Graef Crystal, one of the ranking experts on executive compensation, says on his website (GraefCrystal.com) that Ed Whitacre is a bad choice to be non-executive chairman of General Motors. The government recently appointed him. Whitacre became the head of SBC Communications, since renamed AT&T, in 1990. From then until his retirement, AT&T stock lagged the Dow Jones Industrial Average. From 1994 onward (the first date on which data were available), Whitacre raked in $507 million in total compensation, averaging out to $38 million a year, says Crystal, noting that Whitacre was "one of the most excessively-paid [chief executive officers] in the land." And when he left in 2007, he still had millions of dollars coming. Then there is the second question: what does Whitacre know about cars? He has admitted he knows nothing, but thinks a good manager can run anything. But that is a myth that has been exploded; you have to know the territory, say astute management experts these days.