UPDATED: 4/25/14 3:12 pm ET -- adds details
DETROIT (Bloomberg) -- General Motors is reshaping executive incentive packages based on earnings, global market share and quality.
GM began making the changes after the U.S. government sold its remaining stake in the automaker, according to its proxy filing today with the U.S. Securities and Exchange Commission.
The U.S. Treasury exited GM shares in December. The company signaled in February that a new incentive plan was in the works when it gave greater detail about what new CEO Mary Barra could make this year under her proposed pay package.
"We believe that linking pay to the achievement of both short- and long-term goals is an important cornerstone of employee engagement," GM said in the proxy.
GM, in its proxy statement today, said short-term compensation in 2014 will be tied to performance measures that include quality, global market share and adjusted earnings before interest and taxes.
Under long-term compensation through 2016, GM said performance measures will be global market share and return on invested capital.
Payouts under both measures will range from zero to 200 percent of targets.
GM also said that 25 percent of long-term incentive pay for this year will be awarded in restricted stock units that vest over a three-year period.
GM said the changes are designed to:
- Better link individual and business performance to stockholders’ interests
- Maintain a critical line of sight between company performance and individual rewards
- Support good corporate governance objectives and compensation best practices
- Mitigate business risk
- Enhance GM's efforts to attract, retain, and reward critical talent
GM is also implementing stock ownership requirements for employees at the senior executive level and higher starting in 2014, with the approval of the incentive plan, the proxy says. GM said executives covered by the stock ownership rule will have five years to acquire and hold GM securities under the program.
In 2012 and 2013, GM's share of the global auto market stood at 11.5 percent.
A focus on product quality has gained new momentum at GM as the company plays defense over the timeliness of 2.59 million vehicles recalled because of potentially faulty ignition switches.
In February, GM said Barra's target pay package of $14.4 million for 2014 includes $10 million in long-term compensation that is subject to approval under the new incentive plan by stockholders at the automaker's annual meeting in June.
Dan Ammann, who became GM president in January, will receive a 2014 salary of $1 million, and his short-term incentive target is $1.25 million. When combined with a long-term incentive target of $4.55 million, GM said Ammann's total target compensation for 2014 is $6.8 million.
The company also said today that UAW Vice President Joe Ashton has been nominated to the company's board of directors.
David Phillips contributed to this report.