Ford CEO Alan Mulally at a Paris news conference.
The turnaround at Ford may not be playing out quite as fast as shareholders would like but it’s certainly delivering for CEO Alan Mulally, who landed a $29.5 million compensation package for 2011, the maker has revealed.
That’s more than double what the number two Detroit maker gave Ford family heir and company CEO Bill Ford in the form of pay and bonuses. And Mulally’s big payday follows the announcement earlier this month that the former Boeing executive had received $58.3 million as part of a long-term incentive package.
Few executives in the auto industry have received more kudos than Mulally, who is credited with initiating many of the critical steps needed to not only revive Ford Motor Co. but also help it sidestep the bankruptcy-and-bailout route taken by its cross town rivals, General Motors and Chrysler, in 2009.
Nonetheless, there has been at least some pushback.
Last year’s pay package triggered opposition from union leaders and the rank-and-file when Mulally was given another multi-million-dollar stock bonus prior to Ford’s return to the bargaining table with the United Auto Workers Union last year. It negotiated a conservative contract that is expected to ultimately lower labor costs over the next four years.
The $29.5 million package was up 11.3% from Mulally’s 2010 pay package. The latest figure includes $2 million in salary and $5.46 million in bonuses, according to Ford’s proxy statement. Meanwhile, about $22 million comes in the form of restricted stock options. Mulally will have to wait at least two years until he can cash out on those. And his actually payout will depend on the price of Ford’s stock at the time.
Under Mulally, the maker’s stock has soared dramatically, dipping to barely $1 a share at one point. Over the last three years, however, the price has risen 370% under the CEO, a Ford spokesperson noted. In recent weeks it has been floating between $12 and $13, up from a one-year low of $9.05 but well behind the 52-week peak of $16.18.
If there’s something shareholders are clearly pleased with it’s the fact that the maker has resumed issuing dividend checks again, albeit in a much smaller amount than was traditional at Ford.
Meanwhile, there’s no question the maker has seen some substantial improvements in bottom line performance. The maker reported a 2011 pre-tax operating profit of $8.8 billion, or $1.51 a share, an increase of $463 million over 2010. But what didn’t sit so well is that Ford still fell about a nickel a share short of early estimates, and more worrisome, total automotive pre-tax operating profits for the fourth quarter dipped to $586 million, a decrease of $155 million from the fourth quarter of 2010.
Mulally was by no means the only one to have a good payday. Among other senior managers:
- Ford Chairman Bill Ford received $14.5 million in combined salary and bonuses. That was a bit down from 2010, but his 2010 compensation included retroactive pay recognizing that the family scion went from 2005 to 2009 without pay;
- Lewis Booth, the Ford chief financial officer who will retire this weekend, saw a 6% drop in compensation, to $7.7 million;
- Mark Fields, Ford’s President of the Americas, and the man considered by many the most likely successor to Mulally, received $8.8 million;
- Joe Hinrichs, the head of Asia/Pacific and African operations, and a long-shot Mulally successor, banked $5.3 million in total compensation.