EXCESS……..Mulally, Ford rewarded for firm’s success
March 8, 2011
Mulally, Ford rewarded for firm’s success
Detroit News Washington Bureau
Ford Motor Co. disclosed Monday it awarded Ford President and CEO Alan Mulally $56 million in stock and Ford Executive Chairman Bill Ford Jr. $42.4 million in stock before taxes.
The Dearborn automaker disclosed its stock awards to the two men, among the most lucrative in U.S. auto industry compensation, and to about a dozen top executives in securities filings Monday.
Mulally was awarded 3.8 million shares of stock worth $56 million before taxes on Friday at $14.76 a share. But the company withheld $23 million in stock to pay the taxes on the award, so Mulally’s net stock award was about $33 million. Mulally also received 884,433 stock options priced at $14.76, meaning they are underwater, since Ford’s stock closed at $14.01 on Monday.
Mulally can exercise those options until 2021 but under terms of his stock option award, he can’t exercise all the options until 2014. He also received another 543,000 stock units that will be converted to stock in 2013 as part of the company’s long-term compensation program.
Bill Ford received 2.87 million shares worth $42.4 million, but the company withheld 1.17 million shares to pay taxes on the award, meaning he took home stock worth $25 million after taxes. Ford also received 412,735 stock options to buy Ford stock at $14.76 a share. They can be exercised through March 2021. He also received 253,742 stock units that will convert into common stock in March 2013.
Ford Motor Co. earned $6.6 billion in profit in 2010, its largest profit since 1999. The company’s stock is up more than 50 percent since its 52-week-low and it is awarding profit-sharing checks to hourly workers that average $5,000.
Other executives who received stock awards include: Lewis Booth, Ford executive vice president and chief financial officer, who was awarded $3.2 million in Ford stock, and received about $1.9 million after taxes. He also received 129,716 stock options at $14.76. Dave Leitch, Ford’s general counsel and group vice president, who received $2.9 million in stock and realized $1.7 million after taxes.
Joe Hinrichs, Ford’s group vice president and president, Asia Pacific and Africa, who received 123,000 shares of stock worth $1.8 million, but realized just over $1 million after taxes.
Just four years ago, Ford was forced to mortgage nearly all of its assets, including its fabled Blue Oval trademark, to borrow $23.5 billion to survive the downturn. Unlike General Motors Co. and Chrysler Group LLC, Ford didn’t go through bankruptcy or accept a federal bailout. Both GM and Chrysler remain under pay restrictions imposed as part of their government bailouts.
“I don’t begrudge the big pay days for these guys. I think they’ve earned it,” said David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor.
“They have presided over a remarkable turnaround at Ford and when you think what people on Wall Street make — these guys actually run companies that make things.”