Ford's Mulally Earns $18 Million
DEARBORN - Ford Motor Co. CEO Alan Mulally's 2009 compensation package totaled nearly $18 million, including stock options and grants, the company reported.
Mulally's compensation was $1 million more than he received in 2008, even though he got less cash because of a voluntary reduction that dropped his cash pay from $2 million to $1.4 million, reported The Detroit News.
Ford swung back to a profit of more than $2.7 billion last year after years of staggering losses. So, most of Mulally's pay increase was a reflection of the increased value of the company's stock, which traded at about $8.50 a share when he was hired in September of 2006 and closed at $13.99 a share Monday
"When CEOs take a lot of stock, you can't complain because they've got to ride it up and ride it down just like the shareholders," said turnaround expert Van Conway of Conway MacKenzie Inc. in Birmingham.
"At $14, it's hard not to give the quarterback a little credit here. Ford avoided a bailout. They avoided bankruptcy. And shareholders would have lost everything if they had filed."
By comparison, General Motors Co. Chairman and CEO Edward Whitacre Jr. this year will receive a compensation package worth $9 million.
The United Auto Workers also has been a big beneficiary of Ford's rising share price.
Last February, the union received 362 million stock warrants with a $9.20 a share strike price that made them all but worthless -- then -- as part of a deal to take over responsibility for hourly retiree health care. At today's prices, however, the UAW has netted more than $1.5 billion.
"Compensation typically goes up when companies are profitable," Conway said.
One person who has yet to receive any increased rewards is Executive Chairman Bill Ford Jr., who has been working without compensation since 2005.
Ford spokesman Mark Truby said Bill Ford, the great-grandson of Henry Ford, will continue to forgo compensation "until the board determines we've achieved automotive profitability for a full year."
When that happens, his total compensation for 2009, including stock options and grants, will be $16.8 million.
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