Magna founder Frank Stronach got $52 million in consulting fees in 2013

Article by Christian A., on April 9, 2014

Magna International Inc.’s founder Frank Stronach received $52 million in consulting fees from Canadian auto supplier in 2013. Stronach received around $900 million to cede control of Magna under a contentious buyout agreement in 2010. Under the terms of the deal, Stronach received 2.25 percent of Magna's pre-tax profit in 2013 and will be paid 2 percent in 2014, the final year of compensation.

Magna is stressing that Stronach’s compensation will stop at the end of this year, saying that the arrangements will not be renewed, extended or replaced with any other form. Stronach received $47 million in 2012 and $38 million in 2011 for consulting services under the deal.

The founder stopped being an officer at Magna in 2010 and resigned as a director in 2012. Magna said that Stronach's only role in 2013 was as a consultant. Stronach quit the Austrian parliament in January 213, after founding a party that grabbed only 6 percent of the popular vote and 11 seats in September 2013 elections.

Once payments to Stronach stop, Magna will cut the profit-sharing cap for senior executives from the current 6 percent to just 3 percent of pre-tax profit. The company said the move is designed to give shareholders the certainty that the profit-sharing percentage Stronach had received “will not be allocated to anyone else.

Magna chief executive Don Walker received almost $19 million in total compensation in 2013. Chief financial officer Vincent Galifi got $7.6 million while chief operating officer Tommy Skudutis received $7.5 million. [source: automotive news - sub. required]

Topics: magna

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