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Discussion Starter · #1 ·
Ford CEO earns 18 million U.S. dollars in 2009

CHICAGO, March 23 (Xinhua) -- Ford Motor Co. CEO Alan Mulally's 2009 compensation package totaled nearly 18 million U.S. dollars, including stock options and grants, local media reported on Tuesday.
Mulally's compensation was 1 million dollars 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 dollars, the Detroit News reported.
Ford swung back to a profit of more than 2.7 billion dollars 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 dollars a share when he was hired in September of 2006 and closed at 13.99 dollars a share on Monday.
By comparison, General Motors Co. Chairman and CEO Edward Whitacre Jr. this year will receive a compensation package worth 9 million dollars, according to the Detroit News.
The United Auto Workers (UAW) 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 dollars 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 dollars.
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 dollars.

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2,900 Posts
Discussion Starter · #2 ·
Why Ford's workers, retirees can cheer Mulally's big payoff

Thanks to Ford's surging stock price, CEO Alan Mulally appears poised to become, sometime soon, a $100-million man.

His accumulated stock options, grants and performance awards were worth $89 million at the end of 2009. A 40% jump in Ford stock since then has pushed the value of his future haul well into nine figures.

That's big money, bound to provoke some hoots of protest about runaway executive pay. But it's only a tiny fraction of the increase in Ford's total value, which has more than tripled -- from $15.3 billion to $46.8 billion -- since Mulally was named CEO in 2006.

Ford stock has jumped from $1.26 a share in November 2008, at the height of economic panic, to $13.99 on Monday.

The rising Ford tide is lifting many boats, not just Mulally's. The retiree health care trust fund for Ford's UAW workers holds warrants for 362 million Ford shares that can be exchanged at $9.20 a share. That means the trust stands to make a profit of about $1.7 billion at today's stock value.
Some perspective

Boffo compensation numbers north of 100 million smackeroos tend to get folks riled up, inciting shouts of "obscene" from some quarters, or "he's worth every penny" from business folks who aspire to someday ride the train Mulally is on at Ford.
But what we need here is some perspective.
Yes, we can soon call the Ford CEO a $100-million man, assuming he can keep the company's momentum and stock price surging.
At least that's what the numbers in Ford's annual tally of executive pay suggest Mulally's various stock and performance rewards will be worth a few years hence. The value of his "equity incentive plan awards," according to a chart on page 59 of the 84-page proxy statement Ford issued Monday, is $89 million, based on a Ford share price of $10 at the end of 2009.
With Ford stock gaining 70 cents to close at $13.99 Monday, up 40% so far this year, it's safe to assume Mulally's haul for leading Ford's recovery will be well into nine figures.
No wonder the guy is always smiling.

Define 'deserve'

Most of us don't make Mulally money and never will. A touch of envy or resentment is understandable

For an average person in the U.S., where the annual per-capita income is around $40,000, it would take about 2,500 years to earn $100 million. Even the new Obama health care plan is unlikely to result in lifespans that long.
But lots of Detroiters do own Ford stock and they're darned happy -- even if they didn't buy at the low point of $1.26 a share last November -- that its value has increased 11-fold since then. Mulally, hired away from Boeing in 2006, deserves much credit for steering Ford through the economic crisis, avoiding bankruptcy and government ownership, and putting the company on the path to profitability and improved market share and product quality.
Does that mean he deserves $100 million?
To paraphrase that great parser of language Bill Clinton, it depends on how you define "deserve."
No guarantees

Does Mulally deserve to make far less money than Alex Rodriguez of the New York Yankees, he of the 10-year, $275-million contract?
Do we begrudge Justin Verlander, ace of our beloved Detroit Tigers' pitching staff, the new five-year deal that will pay him $80 million to go out and throw baseballs once or twice a week?
Mulally isn't Detroit's only $100-million man. Miguel Cabrera, the Tigers' big bopper at first base, is being paid $152 million for eight years.
And for Verlander, Cabrera and Rodriguez, their money is virtually guaranteed if they show up to work, no matter how they perform.
Not so for Mulally, whose base pay was $1.4 million last year. Not chump change, certainly, but most of the rest of his compensation depends, as it should, on improving the value of Ford.

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