GM Insiders Dump $2.8 Million Worth of Shares in June

NLPC ^ | July 9, 2015 | Mark Modica

[jazusamo]

It would appear that the insiders at General Motors do not have as rosy a view on the financial outlook for the company as they would have the rest of the public believe. The well-paid executives at GM sold out of another $2.8 million worth of shares in June according to Yahoo Financial statistics. Of course, the sales of shares are pure profits for the higher-ups at GM, considering that the elite group of executives receive millions of dollars’ worth of GM shares for free through stock options.

So, what have the highly-paid executives at GM done to earn their millions of dollars? GM shares are now trading at near 52 week lows at around $31 per share, less than the $33 IPO price in 2010. GM stock has declined close to 15% over the past three months compared to down about 2% for the broader S&P 500 index. Most disturbingly for GM shareholders, this comes at a time where car sales are at all-time highs and at a time when GM is buying back billions of dollars of its own shares .

The GM insider selling in June came from nine executives at the company with director and ex-UAW advisor, Stephen Girsky, leading the pack with a sale of $821,837 worth of shares. The person most responsible for GM’s performance, or lack thereof, is CEO Mary Barra. Barra cashed in to the tune of $590,896 worth of shares sold. Despite the horrible performance of GM shares, Ms. Barra continues to receive accolades from the media for being a female executive.

US taxpayers paid billions of dollars to keep GM afloat when the company was navigated through a bankruptcy process by the Obama Administration in 2009. Since then, politically-favored groups like the UAW have benefited along with the wealthy executives who continue to bilk the company for millions of dollars in pay as the rest of shareholders watch GM’s share price continue to tumble. The worst may be yet to come as the auto industry nears a downturn that is inevitable in the highly cyclical and competitive sector.

Mark Modica is an NLPC Associate Fellow.

[proxy_user]

Half their sales are in China. They rightly fear that their customers there will not exactly be feeling flush.

[dragnet2]

Half their sales are in China.

No conflict there!

[Ingtar]

Doing so in China would get them shot.

[jazusamo]

Good point, exactly right.

[montag813]

That’s a tiny amount of shares, for you playing at home. Make a good headline though

[jjotto]

I’d be very surprised if GM insiders didn’t trade more than that amount every month.

[EQAndyBuzz]

Sounds very much like Goldman Sachs right before the housing bubble burst.

[TomGuy]

Agree.

$2.8 million would hardly buy a decent yacht.

[jazusamo]

Please bump the Freepathon or click above to donate or become a monthly donor!

[HonorInPa]

Plus it is misleading to say that they get these options for free. First they are part of their executive compensation package. Executives in all types of businesses - large and small - get grants of options. Second, GM must expense those options in the current year. Third, if and when the executives exercise the options they become taxable income. No free ride here unless, as the author does, you want to play the class envy card. 2.8M shares in GM stock over a month is like spitting in the ocean.

[jjotto]

Someone texted me that it is .005% of GM capitalization.

[bicyclerepair]

GM makes CRAP!

[norwaypinesavage]

The author doesn't understand stock options. The stock option is an offer by GM sell a fixed number of shares of stock to the executive at the price of the stock on the day the option is offered. The only time the option is of any value at all is when the stock increases in price above the price the day the option is offered. The option is available for a limited number of years, often up to 10 years.

The purpose of this is to give the executives an incentive to increase the value of the stock. People don't 'sell' stock options, they exercise them by buying the stock. Some may turn around and immediately sell them to pocket the profit. It's better to hold them for at least a year so that the increase becomes a capitol gain tax, not an income tax.

[Mark Modica]

Executives may have an incentive to increase share value, but they have failed. Article updated with following:

>>Heavy insider selling has been ongoing at GM since I wrote about a SIGTARP report in September of 2014 that unveiled excessive pay at GM. The report found that the top nine executives at GM saw income rise from $32,307,500 to $35,335,000 in 2013.

During the 12 month period from March of 2013 to March of 2014 eight GM executives sold over $36 million worth of shares. Insider selling has not seemed to slow as executives continue to cash out while GM shares flounder.<<

Taxpayers lost billions, bondholders hosed, Mom and Pop shareholders who bought on the hype have been burnt. Cronies make their millions. As SIGTARP stated, EXCESSIVE PAY!

[truth_seeker]

You sound like Bernie Sanders and Elizabeth Warren.

[Mark Modica]

LOL. I’m only against excessive pay when the taxpayers foot the bill and when those raking in the money did nothing to deserve it, other than being cronies. Being compared to Bernie Sanders and Elizabeth Warren is a first, though.