AUTOS: Time to Take Stock

Life has been tough at General Motors. The No. 1 U.S. automaker has shut plants, laid off thousands of workers and otherwise struggled to regain an < eroding market share. Now, with labor contract talks coming soon, GM is taking a new step on the road to austerity: lavish annual cash bonuses for executives will be replaced by stock options tied to GM’s financial performance.

But the cash-bonus plan, in use since 1918, enjoyed one last hurrah. Chairman Roger Smith and 5,459 fellow employees received $169 million in bonuses for 1986, a year in which company profits dropped by $1 billion. Smith’s package adds a $338,000 cash bonus and a so-called performance achievement award of $280,000 to his $750,000 salary. The cash bonus and salary figures add up to 8.5% less than Smith got for 1985.