28 Million for Four Months of Work?!

[omix-ada]

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.

 

Link to Article: http://money.cnn.com/2007/04/05/news/compa...dex.htm?cnn=yes

[J-150]

telling half of the story to make a point is akin to lying.

 

 

would you care to tell the rest of the story?

 

 

Or do you wish to continue lying?

[01FOCI]

Poll from CNN's website:

 

1. Is the $28 million in compensation given to Ford CEO Alan Mulally...

Appropriate pay for his job? 1%

Appropriate if he can turn Ford around? 19%

Inappropriate no matter what he does? 79%

Not sure 1%

total responses to this question: 6679

 

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.

 

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.

 

So for cold hard cash ford is only shelling out 666,667 hmm such a lucky number the poor suckers who sill own ford stock will shell out the rest in diminished value per share.

[Joe771476]

Totally ridiculous! For what? I said a long time ago to keep the Taurus name! Uh, Ford, I tell you what: Just send me $1 million. I don't want to bankrupt you! Morons!

[NickF1011]

Totally ridiculous! For what? I said a long time ago to keep the Taurus name! Uh, Ford, I tell you what: Just send me $1 million. I don't want to bankrupt you! Morons!

 

And how many executive management positions have you held at Fortune 500 companies in your lifetime?

 

There's a lot more involved than saying "Change the Five Hundred back to Taurus. Okay. My job here is done. Where's my bonus?"

[NickF1011]

But, in reality, that's all he really did.

 

CHING!

 

Mmm hmmm.

[suv_guy_19]

But, in reality, that's all he really did.

 

CHING!

 

 

How do you know what he's done...he won't get paid this every year anyway....they had to do something to attract someone good.

[ZanatWork]

So many threads on so many sites for the same pathetic whining.

 

And, of course, "all he's done" is rename the D3 cars. I'm certain that the fine posters wouldn't just make that up, so they'll be presenting copies of his daily schedule and intinerary for each day in that four month period...because these fine people certainly know exactly what they're talking about!

 

In fact, it'd take the lowest of drooling morons to make that kind of comment without anything solid to back it...right?

 

So, post the proof, fine whiners, and prove your statements to be the carved-in-granite truth we know you bring to BON!!

[Deanh]

So many threads on so many sites for the same pathetic whining.

 

And, of course, "all he's done" is rename the D3 cars. I'm certain that the fine posters wouldn't just make that up, so they'll be presenting copies of his daily schedule and intinerary for each day in that four month period...because these fine people certainly know exactly what they're talking about!

 

In fact, it'd take the lowest of drooling morons to make that kind of comment without anything solid to back it...right?

 

So, post the proof, fine whiners, and prove your statements to be the carved-in-granite truth we know you bring to BON!!

hey...I'll just be honest...I'm F'in jealous....nuff said.

[J-150]

How do you know what he's done...he won't get paid this every year anyway....they had to do something to attract someone good.

 

 

exactly.

 

He negotiated all of his bonuses upfront, in cash.

 

Smart guy when you're heading to a company on the verge of bankruptcy.

[ZanatWork]

How do you know he's done more? As Zan said, post your proof.

 

 

Actually, the burden of proof falls on the whiners, as they're the ones claiming to know what he did.

 

 

 

So...get cracking! Back up your talk! We'll wait.

[silvrsvt]

Ford lost 12.7 Billion dollars last year, and the CEO was rewarded for it with a larger bonus than his contract states he was supposed to receive. What else do you need?

 

 

Uh He started September 2006...so your going to blame all of last year on him?

[silvrsvt]

What puzzles me is why the people on this board cheer for the overcompensated executives, while bashing the people that actually go into a plant and do an honest days work.

 

Lets see...people who don't work for Ford don't care, but the people who do are the ones making the issue over it...look at this way..would you rather not have a job in a couple years because you couldn't get talent in to fix the problems? You have ever right to bitch if the company goes under, but the guy has been on the job 6 months and your calling for his head since he's getting paid too much?

 

Most people are bitching on CNN are bitching because they are jealous. I know I am but I'm not going to cry over it...

[silvrsvt]

Why not? He's getting credit for things happening now, that were planned well before he took the job. Water flows both ways.

 

Investors don't know that...they are too fixated on the future...

[J-150]

Investors don't know that...they are too fixated on the future...

 

 

I think the problem is that Wall Street is fixated on the present... and short term at that.

Many companies are screwed right now (including Ford) because they were playing by Wall Streets rules for too long and did not invest for the future.

[ZanatWork]

Ford lost 12.7 Billion last year, and the CEO was given a bonus. That is all the proof I need. Look at the CNN poll. I am not the only one disgusted. What puzzles me is why the people on this board cheer for the overcompensated executives, while bashing the people that actually go into a plant and do an honest days work.

 

So you're holding him accountable for losses that were results of previous planning, and then use the COMPLETE STACK OF STEAMING B.S. excuse that he's getting the credit.

 

 

Your pathetic excuse means nothing, as I'm asking you to tell us what he really DID do...not handing him extra blame, nor undeserved credit...

 

 

...just proof that "all he did" was rename the D3s. Quit dodging, facts only. We're still waiting, no more dodging please.

 

Memos? Appointment book pages? Receptionist notes? Again, you wouldn't talk smack about the guy without PROOF, right?

[Mark B. Morrow]

I think the problem is that Wall Street is fixated on the present... and short term at that.

Many companies are screwed right now (including Ford) because they were playing by Wall Streets rules for too long and did not invest for the future.

 

 

You are absolutely correct. If Mulally can change Ford's corporate culture,which he has apparently started to do, he is worth every penny. If he can't then his stock options are worthless anyway.

[J-150]

You are absolutely correct. If Mulally can change Ford's corporate culture,which he has apparently started to do, he is worth every penny. If he can't then his stock options are worthless anyway.

 

 

 

so his compensation is much more perfomance driven than people would like to think.

 

From what I've seen so far, I think he can do the job. I don't think he is necessarily the best one for the job, but there are few people capable that would take it at this point. He is available, capable and willing to do it.

 

That puts Ford in a better position than 12 months ago.

[J-150]

Yeah. The more money Ford loses, the more they award their executives in bonuses.

 

 

his compensation isn't necessarily tied to profits.

 

We don't know what his contract states. Sometimes, in situations like this, the performance targets may be to slow sales decline, or speed up plant closings or reduce overhead costs. But not always profits.

 

 

Remember how we got in this mess? We focused too much on trucks. Why? Profits. Thats what everyone was concerned with.

 

 

Should we be worried about profits now? The answer is no. Learn from the past. The ducks need to be in a row so that when profitability returns in a couple of years, it will be long term, stable profit.

[J-150]

Yeah. The more money Ford loses, the more they award their executives in bonuses.

don't get me wrong.

 

I'm not defending his pay package.

 

I'm just trying to illustrate why he would still get a bonus while they lose money.

[J-150]

We do know that his contract only stipulated a $5 Million dollar bonus, yet he was given $6 Million.

 

 

which was most likely not a unilateral decision. Typically, this requires a Board vote. So they must feel that he hit his targets so they gave him a little extra.

 

Of course, if this takes the form of stock options and the stock price never rises, he won't see it.

 

 

If it trulyis that incentive based, then he will work harder to make it happen (I hope)

Edited April 5, 2007 by J-150

[ZanatWork]

Well, I do have to stoop to your level for you to understand me, right?

 

 

With your whining, you couldn't reach the bottom rung of the ladder to my level. For what it's worth, I don't consider myself special; on the contrary, I find that there's another 6.5 billion people on Earth that I share this level with...but we're all above whiners.

[xr7g428]

What is he lying about?

 

Reading comprehension seems to be a rare skill.

 

The first paragraph, while factually correct is meant to mislead. The lie is a better story than the truth. There is no downside for the "journalist", so they go with the misleading but sensational.

 

First the SHOCKING, SHOCKING I TELL YOU, head line:

 

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.

 

Then we get to the rest of the story.

 

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.

 

So as it turns out, he was already making $925,000 a month at his current employer ($11.1Million/year). Is it reasonable to expect that he would leave to go to Ford for less?

 

Mulally's pay package at Ford included a $7.5 million hiring bonus,

 

Less than a years salary at Boeing, not unreasonable, in light of the fact that they are paying UAW workers more than a years salary to quit....

 

as well as $11 million that Ford described as an offset for forfeited performance and stock option awards at Boeing.

 

Again, they were just making him whole on money he had ALREADY earned.

 

In addition he received $55,469 for relocation costs and temporary housing.

 

Seems cheap compared to what it would cost to fly him around on the jet... Maybe he decided he would rather move and take the money in cash.

 

His base salary was $666,667, which works out to annual pay of about $2 million.

 

Nobody ever said you had to be good at math to be a writer. $666,667 per month is a wee tad over $2 million: try $8 million per year.

 

He also received restricted stock grants, which the company valued at $920,404,

 

Now add in the stock grants for another $920,404 and you get about $9 million total. Still less than what he was making at Boeing.

 

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.

 

So these options are worthless right now. The stock price will need to rise above $8.28 before they will be worth a dime.

 

The company had disclosed in a footnote buried on page 228 of an earlier filing with SEC that Mulally saw the value of his stock bonuses increase to $6 million from the originally agreed to $5 million "after reviewing the company's 2006 performance results and Mr. Mulally's leadership role in progressing his key priorities."

 

I will need to find this one, but I suspect that this part is the value of the bonus he would have earned at Boeing, had he stayed.

 

Most salaried workers and supervisors received between $300 to $800, depending on their location and rank in the company. Most union members received about $500. The company did not detail the overall cost of the bonus program, but the widespread bonuses cost the company at least $62 million, based on the 125,000 employees who were eligible for the payment.

 

It looks to me like Mulally didn't get any kind of bonus for poor performance, but every one else did.

 

And just in case you missed it the first time, better repeat that sensational, but intentionally misleading headline:

 

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.

[ZanatWork]

A self-accountable working man (which is why every company owner I've worked for has sought my advice regularly), a car enthusiast, a recording/performing musician, and a lifelong student of the country's car culture.

 

My boss outearns me by a huge amount...and I understand he's in the Big Chair, and if I want what he's got I need to do what it takes to get there.

 

Note how many threads I go around crying about my boss' earnings...then compare it to yourself...and feel rays of wisdom wash over you!

[ZanatWork]

I wouldn't be asshat enough to blame my boss for losses that were due to actions before he got there. Having intentionally bad aim is...well, something I can't begin to understand.