Ford CEO Paid $39.1 Million for Four Months

The Associated Press

Thursday 05 April 2007

Exec's compensation comes after automaker lost $12.7 billion in 2006.

Alan Mulally, Ford Motor Co.'s new president and chief executive officer, received compensation valued at $39.1 million during his four months on the job last year, according to an analysis of a federal regulatory filing made Thursday.

Mulally succeeded Bill Ford as CEO of the Dearborn, Mich.-based company on Sept. 1.

The nation's second-biggest automaker lost $12.7 billion in 2006, the largest loss in its 103-year history, largely due to a massive restructuring plan undertaken amid a withering assault from Asian automakers that have taken an increasing share of the U.S. auto market.

Ford expects more losses this year and in 2008, but expects to return to profitability in 2009.

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.

Mulally also received a $7.5 million hiring bonus and $11 million to offset performance and stock option awards that he forfeited when he left his previous employer, aircraft maker Boeing Co.

He got other compensation totaling $334,433, which included $172,974 for required use of corporate aircraft and $55,469 for relocation costs and temporary housing.

Ford also gave Mulally stock and options awards that had an estimated value of $19.6 million when they were granted his first day on the job, the company said.

The Associated Press calculates total pay including executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock and options awards granted during the year. The calculations don't include changes in the present value of pension benefits or the company's cost of stock and options granted before 2006, and the figures can differ from the company's total.

Bill Ford, who still is the automaker's executive chairman and is a great-grandson of company founder Henry Ford, received no cash salary or bonus in 2006 pursuant to his May 2005 compensation arrangement to forgo such compensation until its automotive sector achieves sustainable profitability.

The company did, however, give Ford stock and options awards that had an estimated value of $4.9 million when they were granted on March 10, 2006. He also got $393,848 in other compensation, including $185,232 for required use of corporate aircraft and $85,708 for security, giving him $5.3 million in total compensation.

The proxy statement said the automaker's annual shareholder meeting will be held May 10 at the Hotel du Pont in Wilmington, Del. Shareholders are scheduled to elect 12 members of the board of directors and vote on nine proposals, including ones that would:

• Give holders of 10 percent of Ford's outstanding common stock the power to call special shareholder meetings.
  
  
• Give one vote to each share of outstanding stock. Ford family shares now are allowed 16 votes each while other shares get one vote each.
  
  
• Set goals for reducing total greenhouse gas emissions from the company's products and operations.
  
  
• Require the board to publish annual reports on global climate change.
  
  
• Remove references to sexual orientation from Ford's written equal opportunity employment policies
  
  
• Compel Ford, in future proxy statements, to identify all executive officers who are contractually entitled to receive in excess of $500,000 annually.
  
  
• Require that at least 75 percent of future equity compensation awarded to senior executives be performance-based.
  
  
• Require Ford to issue a report on how it plans to address rising health care expenses without compromising the health and productivity of its work force.

The filing said the board recommends votes against each proposal except for one in support of selecting PricewaterhouseCoopers LLP as Ford's independent registered public accounting firm for 2007.