Overpaid company executives have become a hot topic in recent years with bank presidents and CEOs pocketing millions of dollars as their customers are buried further in debt, and Ford Motor Company recently created some debate when it announced last year’s salaries for its top guys including president and CEO Alan Mulally and Chairman Bill Ford, Jr.
Mulally took home $26.5 million in 2010 including $1.4 million in salary and $9.45 million in bonuses, while Ford brought home slightly less with $26.4 million with the same salary and $2.7 million in bonuses – the rest of each’s pay consists of stock awards, stock options and other perks. With that kind of money rising to the top, there have been plenty of detractors, but considering that the automaker’s value has quadrupled and its market share has risen over the last five years, I say they’ve earned every penny. In 2010, Ford’s stock improved for the second straight year growing by 68 percent, and it reported its highest net income in more than a decade after bringing in $6.6 billion.
When Mulally took the helm of Ford in 2006, Ford had three core brands (Ford, Lincoln and Mercury) that often had few distinctions in models and it also held four luxury brands (Aston Martin, Volvo, Jaguar and Land Rover) that consistently lost money. Now, Ford has just two brands, and is creating some of the best products on the market. Even more impressive is the fact that Ford outsold its main rival, General Motors, last month for the first time since 1998.
Of course, some of Ford’s profits were padded by the fact that it renegotiated pay rates and benefits for its blue-collar workers, so obviously the United Auto Workers union isn’t too happy seeing automakers executives earning so much.
“I think Alan Mulally is a great CEO, but I don’t think any human being in the world deserves that much money. I think it’s outrageous,” said Bob King, president of the UAW. “I like Alan Mulally. But I just think it’s morally wrong.”
There are definitely two sides to the story, but it’s hard to argue with the success of Ford in recent years. Ford and Lincoln are becoming frequent segment leaders for fuel economy and innovation
Below Mulally and Ford, Mark Fields, Lewis Booth and John Fleming all took home some pretty good salaries themselves. Fields, Ford’s president of The Americas, earned more than $8.8 million; Booth, Ford’s chief financial officer, earned almost $8.2 million; and Fleming, Ford’s head of Global Manufacturing and Labor Affairs, earned $5.9 million.
While there will definitely be debate on both sides as to whether or not these men deserve that kind of money, this group played a pivotal role in keeping Ford out of bankruptcy and away from taxpayer money unlike its Big Three rivals, General Motors and Chrysler.