FoMoCo Grants CEO Options on 5M Shares
Ford Motor Co.’s compensation committee has granted CEO Alan Mulally the option to buy five million shares. Of Ford. “It’s part of our long-term incentive plan to tie compensation to the performance of the company and the performance of the shares for investors,” Ford spokesman Mark Truby told Reuters. Or wrote in a press release. Or something. Big Al’s “strike price”: $1.96. The Blue Oval’s current share price at close of play Friday (as seen on TTAC stock tracker): $2.19. “Mulally may exercise one-third of the options a year from now, two-thirds after two years and all of them by March 2012. The options expire in March 2019.” And become worthless the moment Ford files for bankruptcy. So don’t expect Alan to see C11 as a viable option—even if GM and Chrysler go through that door first. Meanwhile, Big Al scored 136,005 shares of restricted stock and took a 30 percent haircut for 2008 and 2009. Reuters forgot to mention the bottom line on that: $1.4M p.a.. But don’t worry. In ’07, Mulally’s total take home—and we’re just talking about salary for one year—was a cool $21,670,674.
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With a small percentage of the world's population isn't there an equally or more capable person outside the USA who can be brought in on an H-1B visa to work for a couple hundred thousand bucks yearly? How about an illegal alien with the qualifications who would do the work for 50K per year? The mere commoners are expected to compete with the visa holders and illegals, what's so special about the "upper crust"?
Well, I think RobertSD's claim of "cohorts" could easily extend towards any firm in the USA that is struggling mightily at this moment. I believe Thain and Blankfein stole more of the public's wealth than any of these Detroit CEOs, and they got paid way more to do it. Getting The Al for $20M seems like a steal. Keegan over at Goodyear lead a firm that had to sell a bunch of assets, close stores, and lay off about 10,000 people in 2008... but $12M of the guy's $21M compensation was cold hard cash. Sounds like he and your Detroit pals would have a lot in common to talk about over Sunday brunch with most any CEO out there. http://www.nytimes.com/interactive/2008/04/05/business/20080405_EXECCOMP_GRAPHIC.html As they say - don't hate the player hate the game.
I'm a union guy and I have no problem with massive reward for success. I just don't like massive reward for failure ala GM. We need to reward success but not failure. Failure must have its consequences. No bonuses unless a company is profitable should be a common sense rule for most company's BOD when setting executive compensation.