GM lifts CEO salary to $2.2 mln, ending pay cut

By Kevin Krolicki

DETROIT, March 6 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research) said on Thursday Chief Executive Rick Wagoner's 2008 salary has been raised 33 percent to $2.2 million, reversing two years of self-imposed pay cuts taken to support the automaker's turnaround effort.

GM also said Fritz Henderson, the company's No. 2 executive, would be paid $1.8 million this year, up from about $1.3 million in 2007 when he had been chief financial officer.

Henderson, 49, who was promoted this week to become GM president and chief operating officer, also stands to receive a bonus of $2.43 million if GM hits its performance targets.

Wagoner is eligible for a bonus of $3.52 million if GM hits its turnaround targets for 2008, the automaker said in a filing with securities regulators.

The higher salaries approved by GM's board come after the still-struggling automaker reported a record loss of $39 billion for 2007, its third consecutive net loss.

Analysts credit GM with cutting $9 billion in fixed costs, improving the quality and design of its vehicles and clinching a cost-saving contract with the United Auto Workers union that is expected to deliver up to $500 million in annual savings.

But investors remain concerned about GM's lingering exposure to its former finance subsidiary GMAC and its former parts subsidiary Delphi Corp (DPHIQ.PK: Quote, Profile, Research).

In addition, GM, like other major automakers, is seen vulnerable to the downturn in the U.S. economy that has weighed heavily on auto sales. GM's U.S. sales are down 6.5 percent in the first two months of the year.