Ford's Mulally Is The $13 Million Man

Posted by: David Kiley on March 24, 2009

Ford Motor Co. CEO Alan Mulally’s total compensation for 2008 dropped by 37% to $13.6 million last year. That’s still a hefty sum, considering Ford’s record losses and continued financial fragility. Meanwhile, Mulally — who, like his counterparts at General Motors (GM) and Chrysler, was excoriated by Congress and the media last November for flying a private jet to Congressional hearings — no longer flies on Ford-owned jets. But he does fly on chartered private planes.

Mulally’s pay and perks are detailed in a preliminary proxy filed with the U.S. Securities and Exchange Commission. While his compensation may still seem generous for a company that lost $14.7 billion in 2008, Wall Street analysts and even harsh critics of the Detroit Big Three in Congress have credited Mulally for swiftly transforming Ford (F) into a company that, if the U.S. economy would cooperate even a little, should be ready to compete head to head with Toyota and Honda.

Ford so far has not taken loans from the U.S. Treasury’s Troubled Asset Relief Program like GM and Chrysler. Indeed, Mulally has been furiously restructuring the automaker and striking deals with bond holders and the union to avoid taking government loans or having to enter Chapter 11 Bankruptcy.

Mulally has agreed to take a 30 percent cut in his $2 million salary this year and next year. Though the company has sold its corporate aircraft, the CEO remains required to fly on private aircraft for personal and business travel due to security concerns, according to the Ford proxy. The automaker valued Mulally’s compensation for personal use of company and private aircraft in 2008 at $344,109, less than half the $752,203 the prior year.

Executive perks have become a particularly sensitive issue amid U.S. government bailouts aimed at reducing the impact of the recession. Ford said in its filing that Mulally’s family will be allowed to accompany him on trips when he flies on private aircraft and the company will pay the cost of coach-class commercial flights for his family when the travel is at his request.

Mulally, who became CEO in 2006, has been granted the right to remain in “temporary housing” near Ford’s headquarters, which cost the company $110,000 last year.

The automaker has said it has enough liquidity to make it through the deepest downturn in U.S. sales in 27 years without seeking emergency U.S. government loans, unless conditions worsen dramatically beyond current levels.

In addition to Mulally’s salary cut for the next two years, Ford has eliminated performance bonuses for global salaried employees and senior executives for 2009 in a “shared sacrifice” with unionized hourly workers. The UAW has agreed to concessions on overtime, holidays and other areas, changes that Ford has said push its hourly labor costs closer to parity with the U.S. operations of Japanese rivals.

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Reader Comments

Mergen

March 25, 2009 01:36 AM

Was this a PR job for Ford? If so, this was quite nicely written. However, I cannot say anything negatively about Ford's recent efforts. They really do seem to be making all the right calls. As much as I love the Toyota SUV's, Acura sedans, and Japanese engineering in general, I would at least make a half-hearted attempt to buy a Ford IF the vehicle is highly rated for quality by users and IF the car just feels like a quality product (i.e. not just a motor with wheels).

Mergen from Colorado / Mongolia
Internet Marketing Consultant at www.WEBGURU-CO.COM

SteveMD2

March 25, 2009 01:45 AM

Isn't it amazing how capitalism has become "Total Greedism". I think he could live quite well, on a couple mil.

The norm has become that failing CEOs get to rob their companies blind.

This sort of thing always existed, but instead of being the occasional disgrace, it has become the norm.

Because of the Bush Administration, whose "moral values" represent almost total criminality, greed, and the use of religious hatred to win elections.

Bush came up with the term Axis of Evil. He must have been looking in the mirror, along with his cronies.

Never again will I vote repub till the poeple who gave us Iraq, grand theft America, and used religious hatred to win elections are expunged from that party. McCain was basically a good man, but he was tied to the party, and didn't have the guts to say to them that they change, or he publicly would refuse their nomination. And Palin - Mrs Taliban in waiting, who would turn us into a theocracy. A Kristian version of Saudi Arabia.

And then the world, or civilization would end, in the ultimate struggle between mad Ultra-extremist Islam, and the same type of Kristian mentality, just as extreme. A new dark ages would descend,

SteveMD2

March 25, 2009 01:45 AM

Isn't it amazing how capitalism has become "Total Greedism". I think he could live quite well, on a couple mil.

The norm has become that failing CEOs get to rob their companies blind.

This sort of thing always existed, but instead of being the occasional disgrace, it has become the norm.

Because of the Bush Administration, whose "moral values" represent almost total criminality, greed, and the use of religious hatred to win elections.

Bush came up with the term Axis of Evil. He must have been looking in the mirror, along with his cronies.

Never again will I vote repub till the poeple who gave us Iraq, grand theft America, and used religious hatred to win elections are expunged from that party. McCain was basically a good man, but he was tied to the party, and didn't have the guts to say to them that they change, or he publicly would refuse their nomination. And Palin - Mrs Taliban in waiting, who would turn us into a theocracy. A Kristian version of Saudi Arabia.

And then the world, or civilization would end, in the ultimate struggle between mad Ultra-extremist Islam, and the same type of Kristian mentality, just as extreme. A new dark ages would descend,

Bill

March 25, 2009 11:16 AM

There you go Mulally!

Calvin C

March 29, 2009 07:41 PM

It appears that SteveMD2(does the MD stand for Mad Dog?)has been drinking the socialist Kool Aid. Fortunately, neither he nor the government can tell Ford how much to pay their CEO unless they own stock or loan money to Ford. I applaud Ford's efforts to avoid taking taxpayer money. They would be wise to file for bankruptcy rather than take TARP funds. The government will ruin the companies they take control of.

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Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.

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