March 17, 2005
Magna auto parts boss paid $52 million
Aurora, Ontario – Frank Stronach, chairman of auto parts manufacturer Magna International Inc., received $52 million in pay in 2004, despite concern from shareholders who want the company to justify the amount.
Magna said it “expensed” Stronach the equivalent of Cdn$52 million for his “business development and consulting services”. The final figure may be much higher, as Magna has not yet disclosed his base salary, bonuses or possible stock options cashed. The $52 million for consulting is $3.7 million more than he received in 2003 for the same work.
Magna, one of the world’s largest auto parts manufacturers, typically pays Stronach between $250,000 and $300,000 as a base salary. Stronach controls the company through a family trust, although it holds less than 3 per cent of the company’s equity. In the past six years, the company has paid him almost $300 million, making him Canada’s highest-paid chief executive for most of the last decade. He received more than four times as much as Rick Wagoner, CEO of General Motors Corporation.
Stronach started the company out of a small Toronto garage in the 1950s. Today, it earns $20 billion a year and employs 81,000 people on four continents. Stronach, who gets upset when investors question Magna’s board, said last year that if investors don’t like his compensation they can sell their Magna shares.