GM <GM> BONUS SYSTEM OUT OF DATE FOR COMPANY
General Motors Corp's executive salary
bonus plan, effective since 1918, was out of date for the
world's largest automaker's changing corporate strategy,
executive vice president Robert Stempel said.
    "The bonus plan was a plan that was really in sync with a
manufacturing organization selling what it builds," Stempel told
reporters at New York Auto Show's press opening.
    Commenting on GM's previously announced move to replace the
executive bonus-system with a stock option plan, Stempel said
the old system did not fit with the company's strategy of long
term capital investment.
    "We need to make sure that our pay system is in line
with...the long term enhancing of the value of the stock, and
we think that the new program will be doing just that for us,"
GM's Stempel said in response to a reporter's question.
    Stempel voiced confidence that GM shareholders will approve
the new plan, outlined in a shareholder proxy statement issued
Thursday.
    Stempel also said General Motors will reduce 10 pct of its
component business by 1990, for savings of about 500 mln dlrs.
GM plans to "eliminate those units that are clearly defined as
non-competitive in the components business," he said.
 Reuter
