$28M for 4 months work

NEW YORK (CNNMoney.com) -- Struggling Ford Motor Co., which posted a record $12.7 billion net loss in 2006, gave its new CEO Alan Mulally $28 million for four months on the job, according to the company's proxy statement filed with the Securities and Exchange Commission Thursday.

http://money.cnn.com/2007/04/05/news/companies/ford_execpay/index.htm

The Way Forward involves thumbing fat coin into the new CEO's palms.

The regular employees get a massive $300-$800 bonus.

I wonder what Toyota execs get paid...

 

You do realize that a lot of that 12.7 billion was spent buying out old, worthless, and albatross-esque labor contracts, right?

The best money Ford's ever spent, and an action that probably took a strong CEO to get done.

But I digress - your decades of experience running the third largest auto manufacturer precludes my silly assertions. Let's give bigger bonuses to the poor, over-worked, under-paid, and thoroughly oppressed UAW workers.

 

Yah, I saw that on ABC news, it said Salary: $666,667 Commission was something like $11 mill, and there was quite a bit more that i don't recall. Insane amount of money for only 4 months of work.

 

What does that mean ?

as well as $11 million that Ford described as an offset for forfeited performance and stock option awards at Boeing


And, is this $28M sum for 4 months or is what he will be making after his first year ?

 

So...you have decades of running the world's 3rd largest auto maker?

 

Whoa, they can't both have decades of experience at the number three. What's up with that...

 

The 11 million is to pay him for money he was going to make at Boeing, but lost when he became CEO of Ford. One time payola.

The $28M is a combination of stock grants and options, base pay, and pay for leaving Boeing.

It's a large up front cost they paid to get him into the CEO seat and won't be as high next year or in the coming months.

 

Mulally was paid a salary of $666,667 in 2006, a prorated amount based on the $2 million annual salary that the company agreed to pay him, according to Ford's proxy statement filed with the Securities and Exchange Commission.

Mulally also received a $7.5 million hiring bonus and $11 million to offset performance and stock option awards that he forfeited when he left his previous employer, aircraft maker Boeing Co.

He got other compensation totaling $334,433, which included $172,974 for required use of corporate aircraft and $55,469 for relocation costs and temporary housing.

Ford also gave Mulally stock and options awards that had an estimated value of $19.6 million when they were granted his first day on the job, the company said.

The Associated Press calculates total pay including executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock and options awards granted during the year. The calculations don't include changes in the present value of pension benefits or the company's cost of stock and options granted before 2006, and the figures can differ from the company's total.

 

The previous CEOs were prob equally qualified as him and still managed to screw the company.

I have nothing against compensation of that size but only when the company is doing much better than its next competitor/the year before ( Ie : Goldman Sachs ..)

I hope he will prove to be deserving of that money.

 

Gotcha, thanks for the clarification.

 

Strange how people always have a low opinion of those supposedly OVERpaid UAW workers and blue collar people in general, but yet who do you think is actually buying all those working class Ford cars and trucks and keeping Ford in business?......South Hampton debutantes and European royalty?

 

FordMoCo should send a 12.7 Billion Dollar Bill to one Mr Jacques Nasser.

Bill Ford's bail-out bucket was too small for the job, so they (hopefully) found a guy with a bigger bucket.

I've got no problem with huge executive payola so long as the company is doing well and it's employees are prospering. It's way too early to tell what impact Mulally will have.

 

I don't know if Bill Ford was CEO (I'm thinking he was chairman only), but I honestly don't think he's qualified to run such a large company.

Me too. Whether you like Ford or not, it's a big part of the US economy. It'd be a shame if it weren't able to rebound.

 

No. Centuries.

 

I'm sorry that I have a low opinion of members of an organization that has managed to sap dry the coffers, skill, and expertise of three enormous (and now ailing) American giants.

You can debate if you like, but there is absolutely no way you'll convince me that I should cry for UAW members.

 

Unions are slowly killing the auto industry. When you have to deal with unions rather than your customers, this is what happens.

 

Unions. Bad management. Horrible vehicles.

 

In contrast...Frank Stronach (Canadian) who is the Founder and CEO of Magna International, the 3rd largest auto parts manufacturer in the world, gets paid $50,000,000 a year, his salary is something like 1.2$mil, then add bonuses and consulting fees gets him the 50$mil. (The company grosses $25 Billion a year.)

BTW, his company is NON-UNION, which is why they are 1. Profitable and 2. Not Bankrupt

Last year, the company was profitable, but missed revenue targets, his pay was demoted to $30,000,000.

Pretty honest, don't you think?

 

I'm not crying for the UAW, but there seems to be a stigma against American cars these days, and a certain "chicness" about buying foreign cars. Nearly every baby boomer in America grew up with American cars and trucks providing 99% of all the transportation needs of America. Yet many have turned their back on the big 3. Sales have dropped for, in my opinion, no good reason. Everybody that I know who owns a Ford, Chevy, or Dodge has driven the car for more than 100,000 miles with no major problems. I don't really understand the obvious bias against the products of the big 3 these days.

My favorite observation: How do they haul 10 year old scrap Toyotas to the salvage yard? With a 30 year old American truck!

As for blasting the UAW workers, how many of them actually have any input into the bad business decisions of the overpaid CEOs? None for the most part. Joe CEO decides that the factory should design and crank out yet another dull, uninspiring econbox minivan, and when the sales tank and profits drop, everybody blames it on Joe Worker who never had one iota of input into the project. Heads the CEO wins; tails the UAW loses.

But which of the two ends up having to eat baloney sandwiches because of the inevitable outcome of a faltering company?

 

Sales have dropped because the mainstream products (passenger cars) they have been making are carbage compared to a Toyota or a Honda. It is only very recently that Ford and GM have been making decent cars. The 500 is ok, bland but ok. The rebadged Opels at the Saturn lots are decent. The Fusion is decent. The new GM's are a step in the right direction, but they are still way off pace of what Toyota or Honda offers. The Chrysler products are all JUNK.

Some problems with friend's cars, off the top of my head:

2 year old Ford minivan 50kish on the odo...2 new transmissions and going to need a 3rd. Numerous other problems with electricals and seats.

3 year old Chevy truck 75kish in the odo, 6.0l. Rod knock. New engine $ out of pocket.

2002 Olds something or other 50kish miles...suspension rattles, interior rattles, door rattles, the works.

2001 Jeep Cherokee, 30k miles. New rear running bits.

Tally in the massive depreciation on any American car and it's easy to see why they are losing market share.

 

Probably non union because he takes good care of his people.

I have worked union jobs and union employers all have one thing in common, they deserve the union. Non union empolyers in traditional union industries generally have one thing in common, they are good to their people.

 

Every single one of the UAW workers has a hand in the troubles at Ford. Sucking the company dry of every dime in the good times, and refusing to give any slack during the bad times causes companies like Ford to do things like commit to pay and benefits packages that are unsustainable. The UAW does not care because they are the same as the corporation. The UAW big wigs just want their piece of the pie too and will do anything necessary to get it. The more $$ they squeeze out for the workers, the better chance of being kept in office and getting paid megabucks to do nothing all day. When times are bad, the UAW cannot give up ground because the workers would want to boot them for not getting them more $$.

As for the CEO. Let's say you have a piece of property worth billions of dollars. It's fallen into disrepair and needs fixed up. You know that if you can succeed in fixing it up, it will be worth billions again. Question: do you hire the cheapest contractors you can or do you invest some real money in GOOD contractors, knowing that if a good job is done, you will reap billions on the deal? Would you pay $28mm (or a lot more) for a GOOD contractor who will make you billions? Sure you do.

What incentive does the guy have to leave Boeing (one of the more profitable US companies with huge success) and go to ailing Ford, who is on the verge of not making it and where the odds are stacked against you. Well, I wonder what you would want Arlie if some crappy junky TV station wanted to hire you to turn them around. What would you want to leave your job with the best TV station in town to go to the worst in town? Probably a big chunk of change. Theres no difference.

 

Great post Mike, couldnt of said it better myself.

 

No argument there. But keep in mind that it was the poor treatment of working class people by big corporations that caused unions to be formed in the first place. Nobody is stupid enough to believe that if the UAW closed its doors that big corporate automakers would continue to treat their workers fairly. I don't think that you will find many sweat shops in third world countries that treat their workers fairly. And I don't think that you would find many factories here in America that would treat their workers fairly today unless there were unions and laws to FORCE them to treat workers decently.

I think that it's a nasty double edge sword. Greedy CEOs on one side and greedy union bosses on the other. As long as people continue to abuse each other, in this case the foreign automakers will become the winners in the long run.

I believe the government and big corporations do it every day; isn't it called "bidding on a contract" and the LOW bidder gets the job???

 

This is very true.

It has been the notion that American cars are "built by American people, for the American people", which seems like its run as a co-op business, or some sort of non-profit organization which is meant to support the lives of its workers despite economic problems.

If you look at Japanese or Chinese auto manufacturers, all of the millions of employees are living in apartments, units supplied by the company, nobody has cars or even health insurance benefits or pensions, its all supplied by the company inhouse.

How can NA compete with their methods? All of our UAW make $30 hour minimum and live in nice homes, and have access to great benefits and pensions, this costs major $$$$ to the manufacturers as we have seen them offer billions$ to buy out their contracts.