Ford Increased Mulally’s Pay 11% to $29.5 Million, Cut Bonus
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Ford Motor Co. (F) raised Chief Executive Officer Alan Mulally’s 2011 compensation 11 percent to $29.5 million, while cutting his cash bonus 42 percent for a year in which the profitable automaker’s stock fell 36 percent.
He received $2 million in salary, $5.46 million in bonus and $22 million in stock, options and other compensation, the Dearborn, Michigan-based company said today in a regulatory filing. The company this month gave Mulally $58.3 million in stock as part of an incentive plan for 2009 performance.
Mulally, who joined Ford in 2006 from Boeing Co. (BA), engineered a turnaround by globalizing operations, cutting costs and adding fuel-efficient models such as the Fiesta subcompact. Ford fell last year on uncertainty about the global recovery; the shares have risen 16 percent this year.
“He’s doing a lot better than the shareholders,” said Gary Bradshaw, a fund manager at Dallas-based Hodges Capital Management, which owns about 250,000 Ford shares. “He’s done as good a job as any executive out there, but it’s getting harder and harder to justify the big salary and big stock options he gets when the stock isn’t performing.”
Executive Chairman Bill Ford received total compensation of $14.5 million, down 45 percent from 2010, when he received pay deferred from 2008 and 2009. For 2011, Bill Ford received $2 million in salary, $1.56 million in bonus and $10.9 million in stock, option awards and other compensation.
United Auto Workers President Bob King in July called Mulally’s compensation “outrageous” and “excessive.” Ford rewarded Mulally with $56.5 million in stock last year and boosted his 2010 compensation 48 percent to $26.5 million. For 2010, Mulally was the highest paid person in the global auto industry, according to an analysis by Towers Watson & Co., a U.S. benefits consultant.
Ford has awarded Mulally stock worth more than $100 million the past two years. His cash bonus was cut for 2011 because Ford fell short of market share and quality goals. Mulally’s compensation for last year was still his highest since joining Ford. The automaker posted operating earnings of $8.8 billion in 2011.
“Our stock has appreciated under his leadership 370 percent over the last three years,” Jay Cooney, a Ford spokesman, said of Mulally. “Clearly, he’s delivered shareholder value.”
Ford achieved 55 percent of its corporate quality goal, according to the proxy. Last year, the automaker plunged in quality rankings by researcher J.D. Power and Associates due in part to malfunctions with touch-screen dashboard controls on Ford and Lincoln models.
The automaker also realized just 8 percent of its corporate market share goal, including achieving 6 percent of the target of a winning 13.7 percent of the auto market in North America and South America, according to the proxy.
Bonuses for Ford’s top five executives, including Bill Ford and Mulally, fell in 2011, according to the proxy.
Ford borrowed $23.4 billion in late 2006 after Mulally, 66, took over as CEO, putting up assets including its blue oval logo as collateral. That helped the automaker stay out of bankruptcy in 2009 as the predecessors of General Motors Co. and Chrysler Group LLC sought court protection and reorganized with U.S. aid.
To win concessions from the UAW in 2009, Mulally and Bill Ford agreed to 30 percent cuts in their 2009 and 2010 salaries and to forgo bonuses for 2008 and 2009.
GM, VW CEOs
GM CEO Dan Akerson, whose pay must be approved by the Obama administration’s special pay master, said Jan. 10 that he won’t get a cash bonus for 2011, the year the Detroit-based automaker earned a record profit and again became the world’s largest.
Akerson, who served as CEO for four months in 2010, received $2.53 million in total compensation for that year, including a $566,667 salary and $1.96 million in stock awards and other pay, GM said in a proxy statement last year. His annual salary was $1.7 million, the filing said.
Volkswagen AG boosted CEO Martin Winterkorn’s 2011 compensation 87 percent to 17.5 million euros ($23.3 million) for leading the world’s second-largest automaker to a record profit. Winterkorn’s pay was the highest among CEOs in the 30 companies that comprise Germany’s benchmark DAX Index.
Chrysler, Nissan, Toyota
Sergio Marchionne, Chrysler’s CEO, didn’t receive a cash salary or shares from the Auburn Hills, Michigan-based automaker, according to a company filing March 6. Marchionne is also CEO of Fiat SpA, which owns 58.5 percent of Chrysler. Fiat paid him 14.5 million euros in 2011, mostly in stock grants, according to a March 15 filing.
Nissan Motor Co. Chief Executive Officer Carlos Ghosn received 982 million yen ($11.9 million) in total compensation for the 2010 fiscal year, including salary and stock options, making him the highest-paid leader among Japanese companies. Ghosn is also CEO of Renault SA, based in the Paris suburb of Boulogne Billancourt.
Ghosn’s pay was lower than the 2010 average for global automotive companies, estimated at about $15.3 million by Towers Watson & Co.
Other Ford Executives
Ford Chief Financial Officer Lewis Booth, who retires April 1, received $7.7 million in total compensation for 2011, less than the $8.2 million he received a year earlier, the company said. Booth’s bonus for 2011 fell 47 percent to $1.4 million. His 2011 compensation also included a $1.25 million salary and $5.1 million in stock, options and other compensation.
Mark Fields, the company’s president of the Americas, received total compensation of $8.84 million, more than the $8.82 million he received a year earlier. Fields’s cash bonus for 2011 fell 58 percent to $1.5 million. He also received salary of $1.35 million and $5.99 million in stock, options and other compensation.
Joe Hinrichs, president of Ford (F)’s Asia Pacific and Africa region, received total compensation of $5.3 million, 40 percent less than Fields. Hinrichs received a salary of $751,250, bonus of $925,000 and $3.6 million in stock, options and other compensation. Fields and Hinrichs are candidates to replace Mulally when he retires, people familiar with the deliberations have said.
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