GM investors to pay activist Wilson 4% of stock gains
Harry J. Wilson, the former Barack Obama adviser fighting for a General Motors Co. board seat and an $8 billion stock buyback, will get as much as 4 percent of any share price gains from an investor group backing him, according to a regulatory filing.
David Tepper of Appaloosa Management LP and other investors also will pay Wilson a fee of 0.25 percent of their shares or derivative instruments annually. They own about 34.4 million shares, or 2.1 percent of the company’s common stock, GM has said.
Wilson, who helped the U.S. Treasury bail out GM in 2009, served briefly as chief revitalization officer of electronics retailer RadioShack Corp. before it filed for bankruptcy last month. He disclosed his fees along with comments by billionaire investor Warren Buffett to CNBC that he wouldn’t put a hedge fund nominee with a two-year horizon on a board of directors.
GM said it also disclosed Wilson’s fees on its website. The company is considering buybacks or higher dividends, according to a person familiar with the matter.
Chief Financial Officer Chuck Stevens said in February that the company first wanted more clarity on legal costs related to its ignition-switch recall. GM has asked a judge to kill a class action suit demanding $10 billion for price declines in old Chevy Cobalts and Saturn Ions.
Wilson was appointed to the board of Sotheby’s after Daniel Loeb’s Third Point LLC won a proxy fight with the auction house. His other backers in the GM battle are J. Kyle Bass of Hayman Capital Management LP, Frank P. Brosens of Taconic Capital Advisors LP and Parag Vora of HG Vora Capital Management LLC.
When Jerry York served on the GM board at the behest of billionaire investor Kirk Kerkorian in 2006, York was promised 4 percent of any gains in GM share value after three years. York left the board later that same year and Kerkorian sold his GM shares after the automaker declined to merge with Renault SA and Nissan Motor Co.