Daimler Bonus to Chrysler Exec Outlined

DETROIT _ Daimler AG paid Tom LaSorda a $15.7-million bonus for the successful sale of Chrysler to Cerberus Capital Management last August, filings with the federal government showed Wednesday.

LaSorda, who had been the top Chrysler executive under then-DaimlerChrysler AG, received in 2007 a total compensation package from Daimler worth about $20.7 million under Wednesday’s exchange rate, according to the German company’s filing with the U.S. Securities and Exchange Commission.

Cerberus, a private equity firm, acquired majority control of Chrysler on Aug. 4, leaving Daimler with just 19.9 percent of the Auburn Hills, Mich., automaker.

The new filings also give a window into how Chrysler did during the first two months following the ownership change: Chrysler lost 1.9 billion euros _ or $2.9 billion under today’s exchange rate.

Much of that money _ $2.4 billion _ was related to restructuring measures and a new labor agreement with the UAW, which did not necessarily occur in those 8 weeks, the filings indicated.

The picture of how Chrysler did last year, however, is far from clear. There is a three-month reporting lag, the report said.

A Chrysler spokesman declined to talk about the numbers in the Daimler report, and German officials did not answer questions Wednesday.

In November, Chrysler’s new CEO Bob Nardelli said Chrysler was set to lose $1.6 billion, though he did not explain his accounting methodology. Daimler used international accounting standards in its report, which do not directly compare to generally accepted accounting principles in this country.

Under Cerberus control, LaSorda was made president and vice chairman.

Chrysler, as a private company, does not make its finances public, and its officials have said the benefit of being a private company is that it can focus on the long term, making decisions for future success.

“Since August and the return of Chrysler as an independent company, we have not only been meeting, but, in many cases exceeding all key metrics,” David Barnas, a Chrysler spokesman, said in a statement.

“Despite the challenges that lie ahead, Chrysler feels confident today that the company is poised on the threshold of full recovery,” he added. “We are making the tough decisions for the long-term health of the company, our employees are fully engaged as we create an owner-operator mindset, and we are gaining momentum. In addition, Chrysler has a strong partnership with its parent company, Cerberus Capital Management, and has ample liquidity and is fully funded with working capital to meet its present and future needs and objectives.”

LaSorda’s bonuses first drew criticism last fall while the automaker was in negotiations with UAW over a new labor agreement.

In recent weeks, UAW President Ron Gettelfinger has been vocal about the size of executive paychecks at the automakers, saying they need to make sacrifices along with the rank-and-file workers. The UAW agreed to a contract that allows new hires to so-called noncore jobs to begin making roughly half the wage of current workers.

Erich Klemm, the top German labor representative on DaimlerChrysler AG’s supervisory board, called the bonuses to LaSorda and former Chief Operating Officer Eric Ridenour unreasonably high in a German newspaper last fall.

The exact amounts were not made public at the time.

Wednesday’s filings show that LaSorda made 2.1 million euros in base salary, benefits, shares, stock and bonuses.

In addition, LaSorda was paid a 10.4-million euro bonus as part of a deal he agreed to that paid him “upon the successful transfer of a majority ownership interest in Chrysler to a third party.” As part of the agreement, LaSorda, who was under contract until 2012, agreed to break the contract and waived his claim to severance and pension payments.

Daimler said, “The agreements were intended to facilitate a timely and successful transaction while at the same time defining the conditions for a retirement from the board.”

LaSorda had been a member of DaimlerChrysler’s management board.

In addition, LaSorda was paid 1.2 million euros for pro-rated payments of the phantom share awards previously granted to him. Phantom shares are basically a bonus plan under which the bonus amount is based on the value of the company’s stock.

Similarly, Ridenour received a compensation package worth 5.4 million euros, or $8.2 million. His bonus for the Chrysler sale was $4.8 million.

Thomas Sidlik, who had been on DaimlerChrysler’s management board and in charge of global procurement and supply, lost his job as part of the deal. His compensation package, which did not include a bonus tied to the successful Chrysler sale, was $3.4 million.

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