Ford's Great Public Relations

[Dr Robert Harms]

Struggling Ford Motor Company, 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 a statement filed Thursday. The details were made public as Ford moves ahead with plans to close plants and cut more than 30,000 hourly positions from the company in an effort to stem losses.

 

[samthejeepman]

only in america !!!!!!!!!!!!!!!!!!!!!!!!!!

 

[usmcfred]

Yes, it is hard to fathom on first blush, however Billy Ford was not getting it done and the Board decided to go after a true superstar CEO with a proven turnaround record ... in Mulally's case, at Boeing. I believe about 40% of the $28 mil is in stock options that are worth nothing unless the share price rises and that means improved earnings. A second large hunk was to compensate him for value he gave up by leaving Boeing to join Ford.

These "fix it" CEO's are a rare breed and they get enormous incentive compensation for what they do. Time will tell if Mulally, or anyone, can "fix" Ford's problems. If he can, $28 million is a bargain given the current billions being lost annually by the company. usmcfred

 

[Empty Pockets]

Yes, it is hard to fathom on first blush, however Billy Ford was not getting it done and the Board decided to go after a true superstar CEO with a proven turnaround record ... in Mulally's case, at Boeing. I believe about 40% of the $28 mil is in stock options that are worth nothing unless the share price rises and that means improved earnings. A second large hunk was to compensate him for value he gave up by leaving Boeing to join Ford.

These "fix it" CEO's are a rare breed and they get enormous incentive compensation for what they do. Time will tell if Mulally, or anyone, can "fix" Ford's problems. If he can, $28 million is a bargain given the current billions being lost annually by the company. usmcfred

Footnote: his actual "salary" is a mere $2mil/yr acc'ding to a Fox News article.

 

[dbk]

How about:

America's Great Ability To Take Everything out of Context

He didn't get paid $28 million for four months. He got paid $28 million to leave Boeing and the guaranteed millions he had on the table for successfully turning around that company after 9/11 crushed that industry. And as USMC pointed out, much of this "pay" may remain worthless. Everybody who wants to take over one of the world's largest companies in a hyper-competitive market where you are handed a massive disadvantage from the start by your labor costs, raise your hand. Oh, and leaving that whole successful company you've already turned around too.

I think people should think twice about commenting on other people's pay, unless they also want to submit their W-2s for public review. Demonizing people who are compensated for their massive successes isn't something that should happen in America.

 

[GTNJ]

How about:

America's Great Ability To Take Everything out of Context

He didn't get paid $28 million for four months. He got paid $28 million to leave Boeing and the guaranteed millions he had on the table for successfully turning around that company after 9/11 crushed that industry. And as USMC pointed out, much of this "pay" may remain worthless. Everybody who wants to take over one of the world's largest companies in a hyper-competitive market where you are handed a massive disadvantage from the start by your labor costs, raise your hand. Oh, and leaving that whole successful company you've already turned around too.

I think people should think twice about commenting on other people's pay, unless they also want to submit their W-2s for public review. Demonizing people who are compensated for their massive successes isn't something that should happen in America.

Right on ! Mulally was paid a salary of $666,667 in 2006, a prorated amount based on the $2 million annual salary that the company agreed to pay him, according to Ford's proxy statement filed with the Securities and Exchange Commission.

 

[ROCMAN]

Dave,
You shoulda been a fireman! You are always putting out the fires!:wink :lol :biggrin

 

[AJB]

Speaking with my old friends at Ford, they (the ones that seem to understand the dynamics of the Auto Industry) feel that he is doing an outstanding job. Let's hope he 'guts it out' for 5-6 years. Many of us are counting on him as a leader.
andy
AJB 2006 Blue White #0541

 

[SYCO GT]

I'm holding shares that I purchased this year that say he will make Ford a winner again...

 

[dbtgt]

I'm holding shares that I purchased this year that say he will make Ford a winner again...

Me too!:cheers

 

[dbk]

Me three.

 

[Empty Pockets]

Me three.

Me four. 'Profited from his stay at Boeing ... so I figgered ...:shrug

 

[Tonycan]

After dealing with the media for many years, I can tell you that when it comes to this type of story, ink always runs to the highest number. All CEOs have to live with that at this time of the year. The smart ones don't try to explain it, they just suck it up and eventually the story goes away, at least for another year.

 

[Gierkink]

How about:

America's Great Ability To Take Everything out of Context

He didn't get paid $28 million for four months. He got paid $28 million to leave Boeing and the guaranteed millions he had on the table for successfully turning around that company after 9/11 crushed that industry. And as USMC pointed out, much of this "pay" may remain worthless. Everybody who wants to take over one of the world's largest companies in a hyper-competitive market where you are handed a massive disadvantage from the start by your labor costs, raise your hand. Oh, and leaving that whole successful company you've already turned around too.

I think people should think twice about commenting on other people's pay, unless they also want to submit their W-2s for public review. Demonizing people who are compensated for their massive successes isn't something that should happen in America.

Very well said. Ford has a market capitalization of $15B. A little over three years ago it has a market cap of about $28B. Hiring the best person possible to get Ford turned-around could have a major impact on earnings and its resulting market cap. Paying such a person tens of millions of dollars via stock options for doing so is a bargain.

Rob

 

[Quickdraw]

Update: He's up to $39 million for four months...

http://www.reuters.com/article/basicIndustries/idUKN0541418420070405?rpc=77

Excerpts: DETROIT, April 5 (Reuters) - Ford Motor Co. (F.N: Quote, Profile, Research) on Thursday said it awarded new Chief Executive Alan Mulally compensation of $39.1 million for four months of work in 2006, a year when the second-largest U.S. automaker posted a $12.7 billion loss.
~~~
According to Ford's proxy filing with the U.S. Securities and Exchange Commission, Mulally's compensation included a prorated $666,667 salary, an $18.5 million bonus, $19.6 million of stock and option awards, and $334,433 of other compensation.
~~~
Mulally's bonus included $7.5 million awarded when he was hired, and $11 million to offset compensation he gave up when he left Boeing, where he led the commercial plane division.
======================

But agreed, if he can turn things around he is well worth it...

If he can't turn it around Ford will give him a Jac Nasser sized $22 million going away present...

 

[dbk]

Update: He's up to $39 million for four months...

Again, even including the words "four months" is a total mis-characterization.

 

[B O N Y]

How about:

America's Great Ability To Take Everything out of Context

He didn't get paid $28 million for four months. He got paid $28 million to leave Boeing and the guaranteed millions he had on the table for successfully turning around that company after 9/11 crushed that industry. And as USMC pointed out, much of this "pay" may remain worthless. Everybody who wants to take over one of the world's largest companies in a hyper-competitive market where you are handed a massive disadvantage from the start by your labor costs, raise your hand. Oh, and leaving that whole successful company you've already turned around too.

I think people should think twice about commenting on other people's pay, unless they also want to submit their W-2s for public review. Demonizing people who are compensated for their massive successes isn't something that should happen in America.

Have to agree with you 100%

 

[FlorIdaho Chris]

A great CEO is worth big bucks. If he is successful in turning this ship around he is entitled to way more that $28M in my book.

 

[Sinovac]

Again, even including the words "four months" is a total mis-characterization.

Dave, are you suggesting the press engages in "mis-characterization"? Say it ain't so.

 

[Doc]

Dave, are you suggesting the press engages in "mis-characterization"? Say it ain't so.

"Advertisements contain the only truths to be relied on in a newspaper". -Thomas Jefferson
:wink

Of course, I think today's media is built on hype, exaggeration, speculation, distortion, mind-numbing logorrhea, cheerful degeneracy, and political leanings. I'd rather go outside and wash my car. :biggrin