UAW’s King Calls $56.5 Million Award for Mulally ‘Outrageous’
“Alan Mulally is a great CEO, but I don’t think any human being in the world deserves that much money,” King told reporters yesterday at the union’s bargaining convention in Detroit. “It’s outrageous.”
King, 64, elected president of the union in June, will negotiate new contracts this year with Ford, General Motors Co. (GM) and Chrysler Group LLC. While the agreements don’t expire until September, King has said workers must be rewarded for the $7,000 to $30,000 in concessions they each gave since 2005 to help the automakers survive.
Mulally, 65, who came to Ford from Boeing Co. (BA) in 2006, has revived the automaker by emphasizing quality and expanding its lineup with small cars such as the Focus and Fiesta. Ford earned $9.28 billion in the last two years after $30.1 billion in losses from 2006 through 2008.
As a reward for the turnaround, Ford on March 3 paid Mulally unrestricted stock worth $56.5 million and gave Executive Chairman Bill Ford unrestricted shares valued at $42.4 million. Ford withheld some of the stock awards to cover their income taxes. After taxes, Mulally received $33.4 million and Bill Ford got $25.1 million.
Ford shares rose more than fourfold in 2009 and gained 68 percent last year. The stock has declined 15 percent in 2011 and slipped 25 cents, or 1.7 percent, to $14.34 yesterday in New York Stock Exchange composite trading.
“I like Alan Mulally, but I just think it’s morally wrong,” King said. “It creates problems for Ford both in the salaried workforce and hourly workforce. It seems like one individual is getting all the gains instead of gains being shared by everybody.”
The size of Mulally’s stock grant will help the union get a better deal at the bargaining table this year, King said.
“Will that give us more traction and more support from the membership to make sure they get a very substantial share in the upside? Sure it will,” King said. “I’d rather not have that help.”
John Stoll, a Ford spokesman, said the Dearborn, Michigan- based automaker has a “strong relationship” with the UAW and it is in the company’s best interest to continue working together.
“In terms of the comments made about compensation, Alan Mulally’s leadership during 2010 has been widely recognized as extraordinary,” Stoll said. “His compensation reflects Ford’s goal of retaining a world-class CEO.”
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