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Report: Alan Mullaly, Bill Ford Jr. get huge bonuses from Blue Oval *Update

Report: Alan Mullaly, Bill Ford Jr. get huge bonuses from Blue Oval *Update

Posted Mar 8th 2011 3:32PM

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Ford Motor Company Executive Chairman Bill Ford, Jr. and Chief Executive Alan Mulally have reportedly been given big-time bonuses by the Blue Oval for keeping things moving when General Motors and Chrysler filed for bankruptcy. Mulally received $56.5 million worth of Ford stock before taxes and Ford got stock worth $42.4 million.

Ford, Jr. hired Mulally from Boeing in 2006, before they went around to different banks to secure restructuring loans to stay solvent through the lending crisis and economic recession. In 2010, Ford saw its best year since 1999, clearing $6.6 billion in profits.

To add to their enormous bonuses, ~~the Los Angeles Times says that Ford, Jr. and Mulally opted to purchase Ford stock at $14.76 a share~~. *Update: Ford tells us that Ford, Jr. and Mulally do indeed have stock options but have not cashed them in at this time. Market value of Ford stock rose three percent today to $14.46 a share.

[Source: Los Angeles Times | Image: Bill Pugliano/Getty]

Category: Etc., Ford, Earnings/Financials

Tags: alan mulally, bill ford jr, blue oval, executive bonuses, executive pay, ford, la times, mulally

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Avinash machado

They both deserve it. Far more than the AIG execs who got bonuses.

March 09 2011 at 2:36 AM Report abuse Permalink rate up rate down Reply

556hp

The first new car I bought was a 1971 Mustang Grande. Mechanicaly, the car was at best fair, but the rest of the car was from hell. Rust through on the rear quarters within a year and a half was the final straw. I vowed to never again step foot in a Ford dealer. I broke that vow in the fall of 09 and ended up buying a Taurus SHO. The car blew me away with the build quality, the features, the power and the amazing ride comfort. Had it not been for Mulally taking the helm, this never would have been a conversation. It's a very big deal when someone can turn a company around enouph to earn my respect.

Kuddos to you Mulally, you deserve every penny.

March 08 2011 at 7:34 PM Report abuse Permalink rate up rate down Reply

Fulorian

Most people aren't noticing that this is stock compensation. The company did not just hand the man a check for $50 million. Nothing was taken from the company coffers to give to Ford/Mullaly. This is shareholders diluting their share, ever so slightly, for the compensation of the Chief Executive who has taken their stock from $1.60 to $14.50.

I know it's the in thing to bash CEO's getting large compensation packages and the meandering of the workers of America getting the shaft as a result - but that's such faulty reasoning. I somehow suspect that if Ford had decided to pay the entirety of the workforce that money and not compensate the CEO (because he's there out of the goodness of his heart), the shareholders would not be that happy. No offense to the workers - but they aren't the reason that Ford was saved from bankruptcy. What they do is admirable, but they get compensated VERY nicely for it - UAW workers have by far the highest compensation and nicest lifestyle for their relative education/skill level, in the world.

The auto industry has become so insulated from reality.

March 08 2011 at 6:47 PM Report abuse Permalink rate up rate down Reply

1 reply to Fulorian's comment

rog_carl

"Nothing was taken from the company coffers to give to Ford/Mullaly."

Except money. When employees exercise stock options or are given stock grants, the company has to present stock to the employees (or their agent, like a stock broker). Whether the company hands over stock held by the company's treasury or the company has to go out and buy shares on the open market, the company is transferring wealth from its corporate coffers to an individual.

Stocks are only diluted when a company issues more stock and that isn't happening here (and usually doesn't in these situations).

Now matter how you slice it, Ford has $99 million less in assets than it did before Ford gave the stock grants to Bill, Jr. and Mulally.

March 08 2011 at 8:17 PM Report abuse Permalink rate up rate down Reply

John P.

They both deserve the bonuses. Hopefully they won't rest on their laurels and keep plowing ahead full steam.

I like how they aren't focused on being the biggest, just being the best they can be in each segment they compete in. Keep it up!

March 08 2011 at 6:01 PM Report abuse Permalink rate up rate down Reply

john m

Why did Bill get a bonus??? Wasn't he the one who almost ran the company into the ground in the first place with his lack of leadership skills??? Oh well, at least he was smart enough to find someone good to run things... I guess that explains his bonus.

March 08 2011 at 4:58 PM Report abuse Permalink rate up rate down Reply

1 reply to john m's comment

rog_carl

No, Bill Ford, Jr. is the one that the Board of Directors thought had the background to perform well and would be best able to protect their interests (Ford's board is heavily populated by Ford family members.) Previous leaders had pummeled the business and massively de-valued the stock, the Ford family's primary source of wealth. The Ford family wanted someone in charge that would work in their best interests.

When Bill came to the realization that he wasn't up to the task, he told the Board. Intially the Board tried to talk him out of finding a replacement, but Bill persisted and eventually got the go-ahead to recruit a replacement. Bill approached Mulally personally and convinced him to take the CEO position of a company that had been suffering multi-billion dollar losses and had been in decline for decades. (That doesn't exactly sound like a slam dunk sales pitch to me.)

Although he may not be doing it in the way the Board originally conceived, Bill is representing the family's interests -very- well. Whatever bonus Bill got is a rounding error when compared to the value of the Ford family's preferred stock holdings. I'm sure the Board thinks Bill's bonus is money well spent.

March 08 2011 at 5:36 PM Report abuse Permalink rate up rate down Reply

vindicatorprime

Any word as whether it was stock that was bought back or stock that was newly issued?

Mullaly for President :p

March 08 2011 at 4:39 PM Report abuse Permalink rate up rate down Reply

1 reply to vindicatorprime's comment

evensteven

X 2...Mullaly for Prez. Someone who is smart enough to understand what is working and what isn't and then to take the proper action to correct it even if it isn't the most popular action. This is who we need running this country!

March 08 2011 at 5:14 PM Report abuse Permalink rate up rate down Reply

B-rock

Er....and the rich get richer. I hope Ford is as generous to all the people behind the scenes who made Mr. Ford and Mulally look so successful.

March 08 2011 at 4:35 PM Report abuse Permalink rate up rate down Reply

IamXD

This is reward for past work, but what have they done lately?

About a year ago, Ford stock was trading around $14.50 per share. It closed today about the same price. No increase over a year? That's not an investment. I could have stored the cash in my mattress or even a lumbering behemoth like GE would have been a smarter investment, and that's saying something.

I did own the stock from a low of around $7, so I made some money on it, but I cashed out a few weeks ago and started looking elsewhere...

March 08 2011 at 4:28 PM Report abuse Permalink rate up rate down Reply

foxhound

As a Ford shareholder, I totally approve this bonus. This is how CEO should earn their bonuses.

March 08 2011 at 4:28 PM Report abuse Permalink rate up rate down Reply

JakeK66

American this and American that... Remember Ford is bigger than just us, it's worldwide success. That's almost hard to imagine turning around a company that large in so many markets. In the UK, for example, Ford is considered like a domestic brand, same with Australia.

March 08 2011 at 4:18 PM Report abuse Permalink rate up rate down Reply

1 reply to JakeK66's comment

nardvark

Last I remembered, these two guys live in the US and work in Dearborn...what's your point?

March 08 2011 at 4:46 PM Report abuse Permalink rate up rate down Reply