GM lowers bonus performance percentage for salaried employees

General Motors Co. has lowered the percentage in the performance plan payout the automaker uses to determine a salaried employee's bonus payout this year.

The percentage this year is 158%, down from last year's 200%, The Detroit News has confirmed. The lowered percentage comes as GM reported record pre-tax earnings of $14.5 billion for 2022 this week. Every year, GM executives evaluate the business landscape to develop targets to meet for the year. The targets change year to year and that can affect the payout.

Under this year's plan, a salaried employee with a salary of $80,000 a year would be eligible for a bonus of more than $12,000.

On Tuesday, GM said it would give its highest-ever profit-sharing checks to 42,300 hourly employees represented by the United Auto Workers. In 2019, the UAW negotiated the end of a $12,000 cap on profit-sharing bonuses. For every $1 billion GM makes in North America, the automaker's unionized U.S. employees will receive $1,000, according to the GM/United Auto Workers agreement. GM made about $13 billion in North America in 2022.

"We are proud to share our success with our team, both represented and salaried employees," GM spokesperson Maria Raynal said in a statement. "We know that it takes a team effort to achieve these results."

Most U.S. GM salaried employees are eligible to receive a bonus, Raynal said. GM had about 53,000 salaried U.S. employees as of 2021, according to GM's annual report filed with Securities and Exchange Commission.

For GM's salaried employees for 2022, employees across different levels receive certain percentage target bonus payouts, with the percentage rising for higher-level employees:

• Level 2 through level 6: 10%
• Level 7: 13%
• Level 8: 18%
• Level 9: 24%

The formula used for salaried employees is: the employee's salary multiplied by the target payout multiplied by the company's performance plan payout in percentage form (158%) equals the employee's payout opportunity, which is then multiplied by an individual performance percentage.

For example, for a sixth-level employee making $80,000, the formula would be: $80,000 multiplied by 10% multiplied by 158% equals $12,640, which would then be multiplied by the individual performance percentage.

khall@detroitnews.com

Twitter: @bykaleahall