jpd80 Posted March 7, 2012 Share Posted March 7, 2012 (edited) LINK Ford Motor Co. President and CEO Alan Mulally received $58.3 million in company stock this week as part of a 2009 long-term incentive pay package, the automaker disclosed Tuesday. Mulally received 4.82 million shares of stock, but Ford withheld 1.97 million shares to pay the taxes on the stock award. After taxes, Mulally received 2.86 million shares of stock worth $34.5 million after taxes. Ford was awarded the shares as "stock units" in 2009, but they didn't "vest" or become Mulally's until Monday. Ford spokesman Jay Cooney said the company's compensation plan ties executives' pay to performance. "Our compensation philosophy is to align the interests of our leadership with those of our shareholders," Cooney said. "To do this, we put the vast majority of their compensation at risk through performance-based grants. Ford's stock was $1.96 a share at the time of the 2009 awards and is $12 a share today. That is more than a 500 percent increase, and this benefits all stakeholders in the Ford turnaround." Mulally also received a new stock award from Ford's board of directors of 376,016 shares of stock that will vest in 2014. Those shares are currently valued at $4.55 million. Mulally also was awarded options to buy 1.275 million shares of Ford stock at $12.46, which he could exercise over three years with 33 percent per year. Ford's CEO options have no immediate value — since Ford's stock closed at $12.09 on Tuesday. Ford Executive Chairman Bill Ford Jr. was awarded 175,473 shares worth $2.1 million that will vest in 2014. He also received 595,238 stock options that allow him to buy shares of stock at $12.46. The conditions on Mulally's options also apply to Ford's. Today's higher stock price explains why Mulally received 12 times more shares of stock in 2009 than this year. The compensation of top Ford executives was an issue last fall during talks with the United Auto Workers union. Impressive income, bet he's glad he left Boeing. Edited March 7, 2012 by jpd80 Quote Link to comment Share on other sites More sharing options...
focus05 Posted March 7, 2012 Share Posted March 7, 2012 This is being repeated at every company that awards risk-based compensation right now. I had options grants at my company from 2009 fortunately. At the time, it was a small amount of "face" value. But the strike price being so low it also meant a large number of options. Exercising those today at even beyond pre-recession levels rocked. I certainly don't get compensated at Mulally's level, but it's a really nice boost unrelated to anything other than stock performance (which theoretically is a health metric of the company as a whole). It's sort of a one time chunk - well, it might repeat itself a final time next year for the last time - but then it's all over. And our options award the last couple years (and particularly this year) will be worth much less. I think stock compensation is stupid because SEC regulations on reporting actually probably screw up priorities and force companies to act in short-term interests rather than long-term (e.g., we sacrifice something today to meet our EOY numbers estimated in SEC filings and speculated by analysts, and that will hurt us down the road). That causes increased compensation for what could be bad behaviour with respect to regulation... And heavy stock options can skew internal behaviour as well, separately from SEC regulations. It also ignores macro-economic trends. The whole stock market is up. The economy is up. Does that mean my company's good performance was a result of my work - or of larger externalities? But good for Mulally. I like him a lot. And I still believe he has been worth every penny. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted March 7, 2012 Share Posted March 7, 2012 More importantly - anyone who chose to buy stock at $1.96 per share back in 2009 would see the same type of ROI today, although you would have had to buy $10M worth of shares to equal the $58.3M windfall. Just think what it would have been if Ford stock was still around $18/share. 1 Quote Link to comment Share on other sites More sharing options...
aneekr Posted March 7, 2012 Share Posted March 7, 2012 For Mar 12 call options on F (3/17/12 expiration), the $14 strike price has the greatest open interest currently. For puts, highest open interest is for $12 strike price. Quote Link to comment Share on other sites More sharing options...
ausrutherford Posted March 7, 2012 Share Posted March 7, 2012 Waiting for the haters. Quote Link to comment Share on other sites More sharing options...
Moosetang Posted March 7, 2012 Share Posted March 7, 2012 No reason to hate. In a world full of silly/stupid-high CEO pay, Alan is one of the few who clearly deserves to be pulling down a hefty bonus for what he has done for the company. That said, the guys/gals on the line should not be forgotten when rewards for profitability are being handed out. 1 Quote Link to comment Share on other sites More sharing options...
Ron W. Posted March 7, 2012 Share Posted March 7, 2012 No reason to hate. In a world full of silly/stupid-high CEO pay, Alan is one of the few who clearly deserves to be pulling down a hefty bonus for what he has done for the company. That said, the guys/gals on the line should not be forgotten when rewards for profitability are being handed out. Agreed Would be nice if the "silly/stupid" part part was a bit lower world wide. 2 Quote Link to comment Share on other sites More sharing options...
pcwg Posted March 8, 2012 Share Posted March 8, 2012 i wish i bought more stock Quote Link to comment Share on other sites More sharing options...
pcwg Posted March 8, 2012 Share Posted March 8, 2012 as long as the companies in right directin he deserves it Quote Link to comment Share on other sites More sharing options...
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