Filed under: Ford, Earnings/Financials
Mulally pockets $28 million in 2006
Reuters is reporting that while Ford Motor Co. posted a $12.7 billion loss last year, its new Chief Executive earned $28.18 million. And that was for four months worth of work. Alan Mulally's pay for 2006 included salary and stock options, as well as an $18.5 million bonus. The man Mulally replaced, Chairman Bill Ford, had made good on his pledge to forego compensation until the company made a turnaround, and had no salary, bonuses, or stock earnings during the first 8 months of 2006. In the grand scheme of things, $28 million is a drop in the bucket compared to the huge corporate losses Ford has posted, but hopefully Ford is getting what they are paying for with their new CEO. Only time will tell, as the automaker isn't expected to get back into the black until 2009 at the earliest.In all fairness, Mulally's package included a $7.5 million signing bonus and Ford had to pay an additional $11 million to compensate for getting him out of his Boeing contract early. And in case some think Ford would be smart to dump him and take the company in a different direction, the EXIT package would be almost as big. If the CEO is released during his first five years on the job, his exit package is valued at $27.54 million. Mulally gets that amount if he is let go for anything other than cause. That includes being let go due to a merger or bankruptcy filing. To put it in perspective, Ford President of the Americas Mark Fields made $5.57 million last year. That included a salary of $1.25 million and something related to using a jet. And CFO Don Leclair had $4.4 million in total compensation for 2006.
[Source: Reuters]
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Reader Comments (Page 1 of 2)
Don 3:12PM (4/05/2007)
Wow. I hope the new product in the pipeline justifies this expense.
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Realist 3:12PM (4/05/2007)
He can buy a lot of Lexii for that amount.
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Bryan 3:14PM (4/05/2007)
This sounds outrageous to us, but I am assuming that this kind of pay is normal. I think he is doing a great job so far. He is leading the company in a way Bill Ford wanted to, but just could not. The new products are what is going to help them, and as long as they continue with them, there is no reason they won't be in the black come 2009.
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Elliott 3:18PM (4/05/2007)
Stock options make for great headlines of obscene amounts of "Total Compensation", but in my opinion the figure that should be front and center is the amount of cash he received.
He's not going to get rich(er) until/unless Ford finds its way.
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DPC car videos 3:22PM (4/05/2007)
He got 28 million for 4 months of work? no wonder Ford is heading down. Instead of paying the factory workers more to do a better job, one guy makes all the money. I saw Toyota's pay structure and now I see why their company is so successful.
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Sandeep 3:24PM (4/05/2007)
Reminds me of an old Dilbert cartoon:
"The CEO, stepping down today, made more money as CEO than the entire company. When asked, he responded 'Maybe you should've bought stock in me! Who's your daddy?'"
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John 3:32PM (4/05/2007)
I would have taken over Ford for half that amount...
It would be interesting to see a list of all the major OEM's bosses and how they are compensated for their work..
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Gizmo25 3:33PM (4/05/2007)
That is unbelievable! What a waste...Ford is struggling and they pay out that kind of money? Who needs Lotto when you can sit in an office and say " lets change the the Taurus name" Oh " Lets change it back".....Only in America
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Carlos 3:56PM (4/05/2007)
I do think he's doing a good job, and if that's the case then I can understand the money.
But... if we were doing a bad job, he'd be getting paid the same. That bothers me. It bothers me that the upper management at companies that have been doing terribly for years have been making that kind of money. It's even worse that many execs have helped tank their companies, and kept their salaries AND made millions more for being fired, and they'll be picked right up by someone else. Once you're in that club, you can be the biggest idiot in the world and be financially safe.
Mulally's not seeming bad. My concern in this case is that Ford can't ask the UAW for significant concessions with executive compensation like this. It'll be insulting to the UAW and they'll make it a "matter of honor" to hold out.
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aaron 4:04PM (4/05/2007)
"Instead of paying the factory workers more to do a better job..."
Factory workers get paid enough already with base pay and benefits that has been killing Ford for the better part of the decade. Paying them more doesn't guarantee better results.
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richardtoh 4:09PM (4/05/2007)
The standard for performance measure is obviously not very high at Ford. Ford should wait till concrete results showing a real turn-around before rewarding its CEO with enormous amount of money.
Whether the turn-around plan will succeed in the long-run remains to be seen. No matter which way, the CEO comes out OK.
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Bob R. 4:53PM (4/05/2007)
#10, they will just want more after.
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hotcams 6:14PM (4/05/2007)
Why wonder he's all smiling and feeling warm and fuzzy in the photo.
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Daniel 8:26PM (4/05/2007)
Hell, I'll a better job for GS-13 pay.
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Chet 10:17PM (4/05/2007)
"Instead of paying the factory workers more to do a better job, one guy makes all the money." Do you have the slightest clue what Ford's total labor budget is?
"I saw Toyota's pay structure and now I see why their company is so successful." Hint: it's not because Toyota pays their factory workers MORE...
"Ford should wait till concrete results showing a real turn-around before rewarding its CEO with enormous amount of money." What, you people think that the WORKING CEO OF BOEING was going to QUIT THAT JOB and come work for a company with an UNCERTAIN FUTURE in need of TREMENDOUS EFFORT and DIFFICULT, UNPOPULAR DECISIONS...
...and he'd take that job for peanuts?
CEOs don't work on commission.
Anybody who says "I'd take that job for a lot less" -- something tells me it's because you're NOT the CEO of a huge aerospace company and you DIDN'T just improve its fortunes and secure its future.
Star athletes don't switch from a winning team to a struggling one and a REDUCED salary, and they sure as HELL don't do it for a "you get paid only if the team wins" contract -- why should a business executive with proven top-flight talent in his field be expected to do that?
If a guy was willing to quit a great job with great pay at a great company with a great future that he helped create to go work for a company in trouble for no money... I'd seriously question that guy's financial acumen.
The ignorance here is staggering.
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whathe? 10:32PM (4/05/2007)
Somewhere in Tokyo the leaders of Toyota and Honda, who make far less in compensation are smiling as they know paying American auto execs obscene bonuses and salary accelerates the company losing focus.
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Bill 11:07PM (4/05/2007)
Those defending his obscene salary must be overpaid also.
Let me say one thing: There is NO MAN NOR NO WOMAN IN THIS WORLD WORTH THAT KIND OF MONEY -PERIOD!
This is another example of the state of our greed and power hungry nation.
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Doug P 1:39AM (4/06/2007)
This is appalling. Imagine how the people who have devoted 25 years of blood and sweat to Ford must feel right now. This is everything that is wrong with the US automotive industry and why they deserve to be out of business!
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whathe? 5:03AM (4/06/2007)
If he can turn Ford around out of their stumbling bumbling ways, then he's worth every penny because he'll save the company millions and billions in distracted, unfocused spending. So far, the jury's not only out, they're on a smoke break and are thinking of leaving early. Influencing the name-change to Taurus/Sable from 500/Montego is just more confusion to the mix and a step backward.
The cars making their way to market now were planned well before Fields and the Mul-i-na-tor arrived. Let's see what gets green-lighted on their watch. Their intrinsic operating costs and bloated dealer network with at least twice as many dealers as they need will plague them well beyond whether the new cars they produce are popular or not.
I'm not even slightly convinced they're fixing the sticky internal stuff and distractions because their public face in marketing and PR remains so disjointed, inconsistent and wasteful.
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Bob-o 5:14AM (4/06/2007)
"There is NO MAN NOR NO WOMAN IN THIS WORLD WORTH THAT KIND OF MONEY -PERIOD!"
I'm sure your sour tune would be different if you had one of the hundred of thousands of jobs being saved.
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