Ford CEO Earns $28 Million for 4 months work

[Jcrowley]

Ford CEO: $28M for 4 months work
Former Boeing exec got $18.5 million bonus, almost $9 million in stock and options and base salary at annual $2 million rate, according to proxy.
April 5 2007: 6:31 PM EDT

NEW YORK (CNNMoney.com) -- Struggling Ford Motor Co., which posted a record $12.7 billion net loss in 2006, gave its new CEO Alan Mulally $28 million for four months on the job, according to the company's proxy statement filed with the Securities and Exchange Commission Thursday.

The Ford (Charts) pay package for Mulally comes on top of the $7.4 million that aerospace company Boeing (Charts) had previously reported paying him for his eight months running that company's commercial aircraft unit before he made the move to Ford at the beginning of September.

Mulally's pay package at Ford included a $7.5 million hiring bonus, as well as $11 million that Ford described as an offset for forfeited performance and stock option awards at Boeing. In addition he received $55,469 for relocation costs and temporary housing.
Big Three sales slide continues

His base salary was $666,667, which works out to annual pay of about $2 million. He also received restricted stock grants, which the company valued at $920,404, as well as 3 million stock options valued at $7.8 million. The stock options are not yet exercisable, and they have an exercise price of $8.28, or about 4 percent above current prices.

http://money.cnn.com/2007/04/05/news/companies/ford_execpay/index.htm?section=money_latest

[Ilsa]

1. Hey, I can run a company into the ground for alot less than $28 mil!

Just what the hell makes this sonofabitch worth this? Why was he so much better a choice for CEO than any other person who had been with the company and risen through the ranks?

Meanwhile, people are going to lose their jobs with Ford, lose their security, lose their homes and savings while this bastard cleans up. It's immoral! This game of shifting wealth amongst the superwealthy has got to stop.

Recommended because this is so indicative of what is going wrong in this country.

The French didn't lie down and take this shit.

[AndyA]

2. Executive salaries in this country are out of control. It's insulting to workers and the American

public.

How can one person possibly be worth that much money in that amount of time? What knowledge can he possess that someone else doesn't?

I'll bet the solutions to Ford/GM/Chrysler's problems are somewhere in their vast work force. Someone in marketing, design, engineering, etc., has an idea that would put these companies back on top. It's always the "little people" who really know the problem and can see the solution.

All too often, those people don't have access to the people at the top, so the company wastes time and money without fixing the problem.

I've seen this happen before. One of my former employers was trying to cut costs and was going about it in all the wrong ways. This ultimately hurt their ability to generate income. One of the guys at the bottom suggested to me a way to save money without sacrificing as we'd been doing.

It was a good idea, so two weeks later I marched him and his idea right over to the CEO of the company, who was in town for a visit. I told the CEO this guy had a great idea, and I wanted to make sure he heard it first hand.

The guy loved the idea, the company implemented it, it worked, the guy got a nice bonus for his idea, and a new program that made it easy for anyone in the company to submit ideas was put in place. It was called, "What Are We Doing That We Could Do Better?" or something to that effect.

In the three years I was with the company after that, that program was credited with saving somewhere in the neighborhood of $12 million.

The folks at GM/Ford/Chrysler need to skip management and go talk to the people in the field: dealers, salesmen, lower level designers, etc. I'll bet there are some good ideas there that aren't being shared.

[bryant69]

3. That's $528.83 a minute

If I did the math right, which who knows.

Incidentally it took me about 3 minutes to figure that out and write this post. Or $1,562.50. As someone else pointed out, it's entirely possible that our CEOs are a little overpaid.

Bryant
Check it out --> http://seventysketches.blogspot.com

[Captain Hilts]

4. I'll do it for half the money! nt

[Bluedogvoter]

5. I'm sending my resume right NOW!!!

I'll work for half of what he gets.

[valerief]

6. The more they lose money for their company, the more they reap for

themselves.

I wonder what he spends his money on.

[in_cog_ni_to]

7. THIS is the guy to blame for this obscenity we see in CEO salaries.....

He started it and it has only gotten worse over the years.


Iacocca: The man to blame


<snip>
Iacocca's ascent signaled a dramatic change in American culture. Prior to him, the popular image of the CEO had been of a buttoned-down organization man, pampered and well paid, but essentially bland and characterless. The idea of the businessman as an outsized, even heroic, figure seemed like the legacy of a long-forgotten past when men like J.P. Morgan and William Randolph Hearst were still around. In fact, in 1982, Forbes magazine wrote, "Tycoons are fairly rare birds in today's business world. We seldom hear of moguls." Within just a few years, that had all changed, with business journalists turning every clever executive with a good idea into the next Henry Ford, and with the Rupert Murdochs, Sumner Redstones, and Donald Trumps of the world actively cultivating the "mogul" label.<snip>

<snip>
No matter, though. Boards of directors were convinced that the CEO was the key to greatness (perhaps in part because so many directors were themselves CEOs), and they were willing to pay accordingly—after all, you don't treat a new messiah the way you would an ordinary mortal. So CEO pay packages skyrocketed, rising from 42 times the average worker's salary in 1980 to 531 times the average worker's salary in 2000.

And it wasn't just the very best CEOs who were rolling in filthy lucre, either. Since what one executive makes tends to depend on what other executives make—a typical corporate proxy statement will include a line such as "we want our compensation package to be competitive with the industry as a whole"—there was an irresistible ratcheting-upward effect. Then, too, in the 1980s and early 1990s, compensation committees were often made up of other CEOs. Who, really, was going to vote for what would have been an indirect pay cut for himself?

Executive pay was, on its own terms, scandalous. But what made it the engine of the kind of shenanigans we've seen at Enron and WorldCom was the fact that most CEO pay packages relied heavily on stock options. Options were not new—read any business history dating back to the 1950s, and it is clear that option packages were an important part of any CEO's compensation. But the nature of the options grants in the 1990s was qualitatively different.<snip>

More at link:

http://slate.msn.com/?id=2068448