Ford Pays Chief $28 Million for 4 Months’ Work
By NICK BUNKLEY
The Ford Motor Company paid its new chief executive, Alan R. Mulally, $28.18 million in his first four months on the job, the automaker said in a regulatory filing today.
Mr. Mulally’s compensation included an $18.5 million bonus that Ford, which reported a record $12.7 billion in losses last year, disclosed in September when it hired him from Boeing.
Figures detailed in Ford’s annual proxy statement show that he earned more than three times as much as any other company executive, including the executive chairman, William Clay Ford Jr., who has kept a promise made in 2005 not to accept any new salary, bonus or stock awards until Ford can consistently earn a profit. The second-highest pay, $8.67 million, also was for only a few months’ work; it went to James J. Padilla, who retired as president and chief operating officer in July.
Three executives received bonuses for their roles in reducing manufacturing capacity, cutting costs and achieving other goals as part of Ford’s restructuring plan, known as The Way Forward. The awards were part of a retention program that the company recently abandoned.
Mark Fields, president of the company’s Americas division, earned $2.29 million of his $5.57 million in total compensation from that program. Lewis W. K. Booth, executive vice president for Europe, received a $1.7 million retention incentive, while Don R. Leclair, Ford’s chief financial officer, received $1.32 million.
Ford said it spent $517,560 to give Mr. Fields use of a company jet in 2006, a perk he stopped using in January after it received considerable negative publicity. Ford now buys first-class commercial airfares for Mr. Fields to fly from the company’s offices in Dearborn, Mich., to his family’s home in South Florida each weekend.
Executive compensation at all three Detroit automakers has been closely scrutinized since they began restructuring plans that will close dozens of factories and eliminate tens of thousands of jobs. They are attempting to overcome multibillion-dollar losses and become more competitive with foreign-based rivals like Toyota and Honda.
This year, as the automakers negotiate a new labor agreement with the United Automobile Workers union, workers are certain to resist demands for concessions if they consider company executives to be earning excessive salaries.
In recent months, union members have criticized the awarding of restricted stock option bonuses to top executives at General Motors — although G.M. paid no cash bonuses for the second consecutive year — and a proposal at Ford to pay bonuses to executives there. Ford later announced a program to pay “modest” bonuses of at least $300 to all employees.
Mr. Mulally earned a base salary of $666,667, which on an annualized basis translates to $2 million. He was granted a $7.5 million signing bonus and $11 million to make up for bonuses and stock options he forfeited by leaving Boeing. Ford valued the stock and option awards he received last year at $8.68 million.
In his final year at Boeing, where he headed the commercial airplanes division, Mr. Mulally earned a total of $9.96 million.
