Alan Mulally making friends fast, receives a raise
Alan Mulally went to Ford to kick ass and chew bubblegum, and now he'll be able to afford more Hubba Bubba. It's really a stock option bump -- from $5 to $6 million -- as a reward for taking FoMoCo by its earlobes and attempting to drag it out of the mire it's stuck in. We have seen more focus out of Dearborn as Mulally rallies the troops, and the compensation is recognition that the good fight is being waged. Intent on keeping its four-star general focused, the board has also allowed Mulally's immediate family and guests access to Ford aircraft for personal use, even without the presence of the CEO. While it may seem egregious – it makes sense. Rather than chaperone people around, Mulally's time is better spent running Ford. Also, since his family hasn't completed a relocation from Seattle, it allows them to get together with a less heroic effort. Even CEOs want to see their spouses and children, so while there are hefty expenses associated with flying the corporate jets around, a distracted, ineffective CEO is far more costly.[Source: autonews - Sub Req'd]
Reader Comments (Page 1 of 2)
Tony 10:25AM (3/01/2007)
He gets a raise and frequent flyer miles while I have to stay home and draw unemployment. That really makes a lot of sense. Especially since this all could have been avoided. Ford should stop trying to bully everyone they work with.
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Bob 10:27AM (3/01/2007)
Shutting down useless plants that his predecessors unwisely opened. It's called making sacrifices. Jesus, some of you don't quite get what it takes to run a company and make it profitable. Ford is a FOR PROFIT and not a Not FOR PROFIT company.
Mulally came into a frickin mess. Let him clean it up and make FORD a better car company with better focus. Let's judge him in 18 months and see how good or poorly a job he's been doing.
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mark f 10:31AM (3/01/2007)
Ford needs to pay a livable wage to their new CEO - how can he possibly afford plane tickets on his 'meager' salary?
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Bill 11:07AM (3/01/2007)
Poor CEOs, can't be distracted while earning their million$$$$$$. Why doesn't Ford build them an other mansion in Michigan?
And after he fails, he will have many more million$$$$ to look forward to leave the mess he creates.
Fire those high paid workers who do nothing but build the junk the high price CEOs have designed and can't sell.
Life in America for our poor, overworked, underpaid CEOs. What a shame!
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Bill 11:08AM (3/01/2007)
Bob must be one of those underpaid CEOs.
I remember when people were given pay for what they accomplished - not what they "might" accomplish.
These guys are in a totally "win-win" situation. Big $$$ up front and bigger $$$ when canned after failure.
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akintz 11:00AM (3/01/2007)
"Let's judge him in 18 months and see how good or poorly a job he's been doing."
Exactly... this just seems to be a little too soon to be throwing another million at someone like this. The company may be making cuts and it may help and they may turn around... but lets wait for the proof before he starts getting that much more money out of it.
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SobeSVT 11:38AM (3/01/2007)
I am with Bob on this one. Mullaly is hardly the guy to put the blame on but rather the years of misguided management (Nasser) or dumb management (Ford) and the extreme reliance on trucks and SUVS for their profit.
http://fomoconews.com
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Hamud 11:04AM (3/01/2007)
Please, enlight me, that's 6 million per month or per year??? Anyway, that's a lot of money...
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Bob-o 11:23AM (3/01/2007)
You guys have it totally wrong. Going from $5 to 6 million is nothing, especially since they're stock options. It reflects directly on how the company performs in the market, and he'll reap the benefits only if he's able to turn Ford around.
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carfan 11:31AM (3/01/2007)
I wonder if Mulally will get put into some kind of "jobs bank" if he isn't needed in a few years? :-)
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Big Rocket 12:04PM (3/01/2007)
Has Alan Mullaly proven himself to be an effective leader in the automotive industry? No.
Has Ford shown noticeable improvement in sales, market share, or profit in the short time Mullaly became its leader? No.
Has Mullaly already started leeching corporate funds from the Ford war chest, funds which are badly needed for the development of competitive products in the future? Yes.
Mark Fields came under fire for his use of the Ford coporate jet, which costed Ford between $50K to $70K every week. The criticism was so overwhelming that he had to give up his privilege. Why should it be any different for Alan Mulally?
Mulally may not be to blame for Ford's problems. But he is not to be rewarded for Ford's improvement, either, which has yet to happen.
Source:
http://www.autoblog.com/2006/11/15/mark-fields-under-fire-for-expensive-flights-home/
http://www.autoblog.com/2007/01/18/fields-gives-up-his-flying-perks/
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Tool 11:58AM (3/01/2007)
Alan Mulally is doing a terrific job mopping up the mess left by Bill Ford and Mark Fields.
I've been very critical of BOLD MOVES--that it has been more PR than substantive results--but then again remember that GM did a lot of painful restructuring only to re-emerge much stronger.
The thing is that GM had a strong pipeline of terrific product; however I haven't seen any indication that what is coming from Ford is what they will need to turn it around. Especially in an industry that is primarily product-driven.
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amorak 12:41PM (3/01/2007)
The general stupidity in these 'comments' is staggering. These are *STOCK OPTIONS * people - He isn't drawing down a 'war chest' or getting more money thrown at him. I take it you simpletons don't even understand a basic concept like a 'stock option' do you? *IF* Mulally can get Ford's share price up, he stands to have an extra 1 million options that could be in the money. It's really hard to draw any judgment from this blog posting, as no one seems to know what the option exercise price is, or when they vest - So shut the hell up, let the smart people run the companies and you guy can continue to work the assembly line.
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Ford Wannup 12:39PM (3/01/2007)
I am sick and tired of all the union guys complaining about little this and that. Yes, C-level execs have it good. In your next life, why don't you graduate college, work your ass off, and kiss some asses, and maybe once you get to the exec levels, you don't have to bitch and moan about how fair life is???
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jroanejr 4:32PM (3/01/2007)
To Amorak,
I think most people understand stock options. That's not really the point. The point is that his compensation has changed very early in the game. At a time when the Co is losing money, closing plants, and just basically trying to survive, increasing compensation, albeit only in theory, sends the signal that there is still one set of rules for the rank and file (cuts, cuts, cuts) and different rules for the top (more compensation and perks). Is anyone that is actually executing the new plan getting more compensation? Additional perks? If you think the end game won't be a real increase in compensation, no matter what happens to the options, you're seriously deluded. And "smart" people have been running the company, to the tune of billions in losses. Maybe the line workers should have more say!
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Big Rocket 2:19PM (3/01/2007)
#14 (Ford Wannup): "I am sick and tired of all the union guys complaining about little this and that."
Get used to it. This is America, where everyone is guaranteed the freedom of speech. And the fact that unions are ruining the Big 2.5, does not exonerate CEO's from doing the same.
Source:
http://www.autoblog.com/2007/02/28/thousands-leave-fords-white-collar-world-today/3#c3767938
#15 (amorak): "The general stupidity in these 'comments' is staggering... He isn't drawing down a 'war chest' or getting more money thrown at him."
Really? When Mark Fields had use of the Ford corporate jet, it costed Ford between $50K to $70K each week. That's about enough to hire an engineer for a whole year! And now, according to Autoblog, "the [Ford] board has also allowed Mulally's immediate family and guests access to Ford aircraft for personal use, even without the presence of the CEO." Not just for Mulally himself, but family and guests also? You don't think that is a drain on the financial resources at Ford? I find the general stupidity in your comments staggering.
Whether you and the other CEO lovers like it or not, here is the bottom line: It is way too earlier to know whether Mulally is any good for Ford, and it is way too early to reward him with the extravagant perk of a corporate jet.
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Phil 1:51PM (3/01/2007)
costed.
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Ford Wannup 2:22PM (3/01/2007)
To no. 16/ Phil:
touché...lol.
Another reason why those like Big Rocket need to go back to school and be educated, rather than sitting around whining about how the world is so unfair to them.
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epilonious 3:02PM (3/01/2007)
Stock options: the option to buy stock at todays price several years in the future.. meaning...
1. If Ford does well, in 5 years Mulally can spend, say 3 million of his _own money_ for 4 million worth of stock
2. If Ford doesn't do well, the options are worthless, since he could just buy the stock outside the options plan at face value and spend less.
3. He will be spending his own money either way... money that he probably accrued from exercising stock options from other successful companies... which seems to suggest he is a competent CEO... which means he has to make tough decisions like "Give workers buyouts to save the company from going into bankruptcies later and fire everyone without so much as a card"
I feel Ford is making better decisions. They seem to be getting back into making inexpensive cars and halting a silly effort to take their plebian brand "upscale". They will win points with consumers that way.
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wadacrock 3:48PM (3/01/2007)
Heck ..this guy's not gutting the company... what's another million in ANY kind of compensation after this... and forced to use his_own_money to buy the options?!! poor baby...where did it come from ?
"Effective as of September 1, 2006, the Company entered into an agreement with Alan Mulally relating to the hiring of Mr. Mulally as President and Chief Executive Officer. The Company agreed to pay Mr. Mulally a base salary of $2,000,000 per year.
As part of the hiring arrangement, the Company also agreed to pay Mr. Mulally, no later than September 15, 2006, $7,500,000 as a hiring bonus and $11,000,000 as an offset for forfeited performance and stock option awards at his former employer."
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