DETROIT (Bloomberg) -- General Motors Co. is giving 12 top executives share equivalents worth an estimated total of $24.5 million that could be exercised once the company goes public.
GM issued 184,255 salary stock units and 71,155 restricted stock units executives can exercise if they hit certain performance targets, the automaker said Monday in U.S. regulatory filings. Each unit represents one share of stock, and if GM stock hasn't been trading for six months, the executives will receive cash.
CEO Ed Whitacre wants GM shares to trade by the fourth quarter, and company and U.S. Treasury officials have been meeting with investment bankers in recent weeks to select one to manage the initial public offering, people familiar with the matters have said. The automaker is 61 percent owned by the United States.
“This is probably 100 percent related to their run up to an IPO,” said Joe Phillippi, president of AutoTrends Consulting. “It's probably one more step in preparation to go public.”
A stock sale may not be held until next year, CFO Chris Liddell said last month.
The company's equity should be worth $70 billion, according to a May 20 report by Eric Selle, a JPMorgan Chase & Co. debt analyst who projects a return of 47 cents on the dollar for holders of bonds issued by GM's predecessor, General Motors Corp., that will be converted to stock and warrants in new GM.
At current bond prices, GM's implied equity value is about $48 billion. Assuming 500 million shares, the value would be about $96 a share.
At that price, Whitacre's 24,547 salary stock units would be worth $2.36 million. A third of Whitacre's shares can be exercised each year beginning March 31, 2011, the filing said. Whitacre also gets a $1.7 million annual cash salary.
Liddell gets a salary of $750,000. His first group of salary stock shares would be worth $1.53 million, based on a share price of $96. Vice Chairman Steve Girsky gets a salary of $500,000 a year. The 18,063 salary stock shares he will be issued would be worth $1.73 million at Monday's estimated value.