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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]


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  • 54 Comments
      • 4 Years Ago
      Inside ownership is a very good indicator of future success for a company (i.e., the executives have skin in the game). If they are opting to buy additional shares of F rather than cashing out what they have, then I suspect they are extremely optimistic about the future of the company.
      • 4 Years Ago
      If you turn a behemoth like Ford around and make it a profitable company like he did it's more than deserved. Well done.

      I will definitely consider Ford in my future car buying.
        • 4 Years Ago
        Mulally did take good steps to keep Ford from failing. But how can you credit all the turnout to him? GM has turned around too. Chrysler also. Were both of those because of their excellent CEOs?

        The rebound of the automakers has a lot to do with improved credit markets (government help), Cash for Clunkers (government help), flat-out financial assistance to their credit arms (government help) and a general improvement of the economy.

        Mulally did a lot to keep Ford from going under. But to say he made them profitable would imply that GM and Chrysler's CEOs were responsible for them becoming profitable too and I don't think that makes sense since GM hasn't had a good CEO (either of them) during the turnaround period.
        • 4 Years Ago
        spin cycle,

        Yes the things you mention helped the entire auto industry, however, I completely disagree that GM or Chrysler have "turned around".

        Borrowing tens of billions of dollars from the taxpayers followed by filling chapter 11 to shed all of your burdens, followed by more loans does not make a turnaround. Borrowing money, shedding dying brands while making good on your promises and debt, followed by record profits for the decade does make a turn around.

        There's a huge difference here.
        • 4 Years Ago
        "The rebound of the automakers has a lot to do with improved credit markets (government help), Cash for Clunkers (government help), flat-out financial assistance to their credit arms (government help) and a general improvement of the economy."

        While the issues you mention helped Ford, they helped -all- auto brands selling in the United States, both foreign and domestic. Ford has outperformed its peers in many key measures despite having a significantly higher debt load than GM or Chrysler.

        None of the things you cite had any effect on Ford's efforts to focus on the core Ford brand, reduce costs, re-organize global engineering and production resources and make significant improvements in product quality. Those are the things are the primary drivers of Ford's success and they happened by design. Clearly, there's much more to the story than you are willing to recognize.

        I have no problem with huge pay if it reflects huge performance and in this case there has been an amazing performance that's likely to be studied in business schools worldwide for decades to come.
        • 4 Years Ago
        mike:
        You forgot the additional loans while they turn "record profits for a decade".

        All 3 companies are profitable right now. From losing money, that's a turnaround.
      • 4 Years Ago
      "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."

      This is incorrect. There was no lending crisis nor recession in 2006. Although Ford itself was in crisis.
        • 4 Years Ago
        "they took the money"

        Ford didn't "take" anything. They applied for loans, just like everyone else, had to promise everything Ford owned as collateral and have to pay interest on the loans, just like everyone else.

        At first Ford had only loan guarantees, not money in hand. As soon as Mulally and the Board saw the meltdown starting, they drew every last penny of every loan they secured. Mulally's plan, approved by the Board, literally risked the company. It was a make or break moment and Mulally clearly made it and then some.
        • 4 Years Ago
        @nardvark: It was luck because no one ever predicts these recessions with any accuracy, and certainly not some small fry automaker (relative to the hands behind the big banks)
        • 4 Years Ago
        Read it again, it's accurate. He was hired in 2006, and one of the first things he did was take on a massive amount of cheap debt, shortly before the credit crisis hit. If Ford had needed to secure $20B in financing in 208-2009, they would have been screwed.
        • 4 Years Ago
        How do you know it was luck and not skill?

        They could have very easily said "We'll just get $3B for the year and hope things are better." Instead they got a ton of extra financing while it was dirt cheap and invested in their business. Seems pretty smart to me...
        • 4 Years Ago
        The implied wording is that they took the money to weather the crisis. They took the money because Ford was in crisis without the credit market freeze and before the recession. The timing was luck.

        They've done a wonderful job since then managing the situation, especially PR.
      • 4 Years Ago
      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.
      • 4 Years Ago
      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.
        • 4 Years Ago
        Last I remembered, these two guys live in the US and work in Dearborn...what's your point?
      • 4 Years Ago
      Way to go Mr Ford and Mr Mullaly!

      You both earned it - you save the American Taxpayers billions of dollars from not having to save your collective hides and we thank you!

      In the end Government Motors' bailout will cost the American Taxpayers over $20 billion after all the deceit and dishonest dealings with this Administration is finalized.

      Plus, we have at least one American car company that we can be proud to call AMERICAN!

      As to Government Motors - go screw yourself.
        • 4 Years Ago
        "Politicization of our currency and our lending system would be even more dangerous than leaving it in the hands of a private institution who's continuity is directly correlated to our prosperity."

        Would be? It's already a done deal and has been as long as there has been a Federal Reserve System. The fact that you think that banks operate on some guiding principle of correlation to our prosperity is deluded. Banks do not give a darn about you or your prosperity. Free checking isn't free. When banks charge huge fees for overdrafts and then clear checks in an order that ensures that as many bounce as possible, I'm pretty sure they are not looking out for your prosperity.

        "We politicized home mortgage lending over a decade ago; look where that got us."

        Millions and millions of Americans, over the course of many decades, owning their own homes. Affordable interest rates and non-discriminatory, equitable lending and loan servicing practices. Sounds pretty darn good to me.

        "The government is not creating wealth out of thin air,"

        Um, yeah they are. That's exactly how the U.S. and many other modern economies do it. Our money isn't based on nor is it redeemable for gold, silver or any other valuable commodity. It's value is based on the full faith and credit of the United States, a fancy of way of saying "because we said so" or "just trust us" or "look at our track record". When the Fed increases the money supply, its effectively making money out of thin air. They may as well have the Secretary of the Treasury wear a wizard's costume and wave a wand.
        • 4 Years Ago
        Politicization of our currency and our lending system would be even more dangerous than leaving it in the hands of a private institution who's continuity is directly correlated to our prosperity. We politicized home mortgage lending over a decade ago; look where that got us.

        Our fiat currency functions somewhat like an equity instrument in which the value of the equity is based upon the wealth of our nation and the performance of our currency as an investment instrument. The government is not creating wealth out of thin air, they are diluting the value of our shares (so to speak) and they are attempting to "helicopter drop" the currency in hopes that the competitive throat slashing and loose spending will jump start the economy. You don't care if we do this? Really? Bailouts and trillion dollar helicopter drops to boost the money supply is akin to shocking your economy with a defibrillator. It's a big deal even if the individual loans are not that large.

        Keynesian economics is the cure for a bad disease. It would be a lot better to focus on prevention.
        • 4 Years Ago
        A loan is a business proposition. The U.S. government literally creates money out of thin air, loans it to commercial banks and those banks then loan it out to businesses and consumers.

        Who cares if the government cuts out the middle-man? Like banks have done anyone any favors, ever? I'm glad the feds are cutting the commercial banks out of the loop. The commercial banks don't deserve the profits they would get from the loans to Ford (or anybody else).

        Just in case you are confused about what a loan is and how that's different from a bailout -

        GM and Chrysler got "free" money (not loans) and all we taxpayers got was ownership in a couple of companies that could have failed massively, taking all that money with them had they continued to fail. The feds basically nationalized GM and Chrysler and that does not in any way compare to Ford taking out loans.

        Ford has loans, not charity. Ford has to make regular payments on the principal and Ford has to pay interest. That's a pretty standard business arrangement. Who cares if Ford gets the loans directly from the Federal government or a bank?
        • 4 Years Ago
        Glenn Beck called. He wants his schtick back.
        • 4 Years Ago
        Ford takes out $0.5B worth of loans from the US government every 6 months right now.

        The idea that Ford did this with no government help is incredibly misguided.
      • 4 Years Ago
      Mr. Mulally saved Ford... Ford Jr. did not make the decision by himself to bring him in. All you have to do is look back and see how uncharacteristic it was to make an admirable decision. I, however, could become a Ford guy after Ford had the guts to stick it out and stay non-government funded. Here's to Ford.
        • 4 Years Ago
        Hear you loud and clear! Bill Ford wanted Carlos Ghosn or Dieter Zetche to take the CEO spot at Ford but both passed. Bill Ford does NOT deserve 46 million!!

        He dumped the Taurus and Explorer names, cost cut all vehicles, avoided European operation alliances...and ON and ON.

        • 4 Years Ago
        I've worked for a number of bosses who didn't have the guts and self-awareness to recognize when they didn't have what it takes to make a plan succeed. That's a hard thing to do and I give Bill Ford, Jr. a ton of credit for realizing that he wasn't going to be able to turn Ford around and recruiting someone who could.

      • 4 Years Ago
      Mulally earned every penny, Bill Ford? Not at all. Go look at the nose dive the Company took over the years he was CEO. Only good thing he did was admit failure and hire Alan!
        • 4 Years Ago
        @Lionsfan

        And that was worth 46 Million? Give me a break.
        • 4 Years Ago
        Hey, that's still doing something. Obama should do so much.
        • 4 Years Ago
        "Only good thing he did was admit failure and hire Alan!" - which saved the company. Seems like he was smart enough to make the change and should be rewarded as such.
        • 4 Years Ago
        The company was already in a nose dive way before Bill Ford took over. The road to recovery started with him and he knew it was too big a task for someone of his experience. He had the forsight to hire Mulally away from Boeing which turned out to be the best move made by any CEO in years. He's still chairman of the board and has singlehandedly kept the Ford family from jumping ship. One of the other things that kept Ford solvent was that the holders of the family stock didn't part with it when it was near going bust.

        That being said, none of the work-a-day employees got a raise at Ford (they got a pittance one time bonus). If I were as rich as these two, I'd have given up my bonus checks and made sure that my employees that don't make millions each year got a simple cost of living raise.
        • 4 Years Ago
        No,all of the employees gave up millions of dollars in consessions and have yet to get any of it back! So no they shouldn't get bonuses until the employees get there consessions back first,without that the turnaround may not have happened
      • 4 Years Ago
      That's too much. I know CEOs are valuable, but $56M? Come on.

      Greed just has no bounds.
        • 4 Years Ago
        well they have something called skill and a bit of "luck".
        • 4 Years Ago
        I in no way said they weren't skilled. They are skilled. Mullaly is skilled. And you pay for that. But $56M is too much.
      • 4 Years Ago
      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.
      • 4 Years Ago
      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.
      • 4 Years Ago
      No government bailout and just finished one of the most profitable years ever, well deserved indeed.
        • 4 Years Ago
        WRONG. Ford got government $$$ (read loans), even more than Chrysler. But who here cares about the facts.

        Mullaly's bonus was well deserved. Ford's name on the logo says he gets "Royalties".
        • 4 Years Ago
        @ Dr. Greenthumb

        The loan was not government money. They obtained the loan from a syndicate formed many different banks around the world.
        • 4 Years Ago
        ....from a syndicate formed "by" many different banks....
        • 4 Years Ago
        "Ford got government $$$ (read loans)"

        The key word there is loans, implying risked collateral, principal re-payment and interest. Loans are not a bailout, they are a business arrangement.

        And frankly, who cares if Ford got government loans? The Import/Export Bank (that's a U.S. Federal government bank, not a private or commercial bank) makes -huge- loans to private, foreign companies all the time so those companies can buy U.S. goods. It's not like the Feds making loans to private companies is a new thing. I'd MUCH rather see the U.S. government making loans to domestic companies like Ford.

        By making loans directly to Ford, the Feds are cutting the commercial banks out of the loop. I'm all for that. Commercial banks aren't your friend - they've never done anything good for anybody. I have no sympathy for them not being able to profit off of making loans to Ford (or GM, Chrylser, Bob's deli, whatever).

        Ford cutting out the middle man and getting its loans directly from the government is a good thing as far as I'm concerned.
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