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.
The details of the compensation packages and costs come 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.
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 upon $5 million "after reviewing the company's 2006 performance results and Mr. Mulally's leadership role in progressing his key priorities."
The filing was made the day after Mulally was the keynote speaker at the start of the New York auto show.
And how is Ford doing? Well, check out this CNN.Com story on the Big Three auto sales figures:
NEW YORK (CNNMoney.com) -- U.S. sales at the traditional Big Three U.S. automakers continue to lose share to Toyota and other import brands in March, although sales at troubled Ford and Chrysler rebounded enough from weak February results to beat forecasts.
[....]
Ford (Charts) reported a 9 percent decline in sales to 264,975 vehicles. But the company had warned last week that it was looking a double-digit declines from what had been its best sales month of 2006, and sales tracker Edmunds.com had forecast a 17 percent drop in sales for the nation's No. 2 automaker.
The sales represented a 26 percent jump from the weak February sales total.
Ford saw good sales from its crossover vehicles, which are a vehicle is similar to an SUV with a more car-like driving characteristics. But it saw a drop in sales for the nation's best-selling vehicle, the F-Series pickup. Sales of the F-series were down 15 percent from a year ago.
George Pipas, the Ford director of sales analysis, said part of the decline was due to the cuts in production of the F-Series last year in the face of soft sales, which left dealers with a 40 percent reduction in F-Series inventory than a year ago.
"Maybe we went too far with production cuts at end of last year," said Pipas. "Hindsight is always 20-20. But when you're down 40 percent in inventory, a 15 percent decline in sales doesn't look so bad."
I should also point out that in a January 23, 2007 CNN story, Ford Motor Company planned to close 14 manufacturing plants in North America and lay off between 25,000-30,000 workers. The employee layoffs represent "about 18 to 21 percent of the [Ford] employees in its North American auto operations." Ford also plans to make cuts in its management, "trimming its officer ranks by 12 percent and its salaried work force by about 4,000 in the first quarter of this year." And finally, in this March 1, 2007 New York Times story, Ford is reporting that its restructuring program will cost around $11.18 billion. A February 28, 2007 Reuters story provides an interesting detail regarding the Ford restructuring, saying that Ford estimates that its North American operations will continue to lose money until 2009, and will run through $17 billion in cash over the next three years. This is the current state of Ford's woes.
And Ford CEO Alan Mulally is getting $28 million for the first four months on this job?
I will admit that I have a hard time justifying why anyone should receive $28 million for four months worth of work--especially in a company that has lost $12.7 billion for 2006. I've seen plenty of crooked CEOs who walked away with huge salary and compensation packages after sending their companies into the ground. Mulally has only been on the job at Ford for only four months. But still, $28 million for those four months? It is outrageous! If Mulally is able to pull Ford out of this mess, then give him the big pay package. But until then, he is going to have to show both Ford, and the shareholders, that he can do the job here to be paid this huge pay package. And if he can't, then he shouldn't be paid one frickin' dime! Because right now, I don't see a "white knight" in Alan Mulally riding to Ford's rescue from its auto woes.
I see another crooked, greedy CEO here ready to steal whatever he can from Ford Motor Company, before throwing Ford's lifeless, bankrupt corpse into the trash.
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