The second coming of Chrysler

Bob Nardelli will be rubbing his hands at his appointment as Chrysler's new chairman and chief exec. Only in January he was heading out the door of DIY chain Home Depot and causing a furore with his record-breaking $210m severance package, which included $20m in cash. His mouth-watering £225m-a-year salary also went down rather badly with Home Depot shareholders, especially when he refused to answer questions about it at last year's annual meeting.

Last Updated: 06 Nov 2012

Now that he finds himself in another high-profile post, however, he seems to have discovered humility. He has apparently agreed to an annual salary of just $1, with further pay related to Chrysler's performance. Judging by the carmaker's recent results he'll have his work cut out if he's expecting a bonus - Chrysler lost $1.46bn in the first three months of this year.

The appointment comes only a few days after private-equity firm Cerberus Capital Management bought an 80% stake in Chrysler from Daimler for $7.4bn. Chrysler certainly seems ripe for the private-equity treatment. It has been 10 years since the company's infamous $36bn ‘merger of equals' with Daimler, a deal that provided the business world with a striking lesson in how not to conduct mergers. The company has been in decline ever since, rocked by culture clash, management problems and increasing competition from Japanese carmakers. It is now in the process of closing plants and shedding 13,000 jobs.

Nardelli is a sign that the private-equity talons are already digging in: just last week Cerberus' chairman John Snow said Chrysler's management would stay intact; now they're shaking things up with a new chief exec. If he turns Chrysler around, there won't be too many complaints about his pay cheque.

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