After yesterday's post on Bill Ford's compensation package, I had a little chinwag with FoMoCo PR Supremo Oscar Suris. Suris explained that his boss– the automaker's Executive Chairman and former CEO– has, indeed, "modified" his May 2005 pledge. (Billy swore on a stack of dry cleaning bills that he wouldn't take a plug nickel from his family namesake until the company was profitable for a full financial year.) The new deal is this: from 2008, Ford will "postpone" Billy's annual compensation until Ford is profitable. In other words, if and when Ford gets back in black, cha-CHING! All the money from '08 forward comes due. How much? Suris wouldn't say. "The Committee felt this was a fair and reasonable way for Bill Ford to stay true to his pledge on some level." Yes, well, keep in mind that Ford is no longer making dividend payments; the Ford family's auto-related cash flow has stopped. As to what Bill Ford has done to aid the "company's progress in restructuring its troubled North American operations," he hired Alan Mullaly. What do you want, blood?
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“stay true to his pledge on some level” ROTFL, for sure!
Do the outsiders want blood? No, they want TTAC (The Truth About Compensation).
As for dividends, it is a sign of Ford and GM’s unwillingness to be honest about their finances that they both continued to pay dividends that weren’t supported by profits; i.e., they were paying dividends out of capital and borrowed money. Sort of like an old-time steamship that burns planks from the hull to keep the boiler fired. Ford’s dividend should have been cut back when Jac Nasser got the ax for squandering the company’s cash on foolish acquisitions.
Seems fair enough to me.
I don’t see any problem with this.
“jkross22 :
I don’t see any problem with this.”
Nor do I. If he ever sees any money, it’ll be a trifle compared to what Ford will have accomplished.
mel23 : “jkross22 : I don’t see any problem with this.” Nor do I. If he ever sees any money, it’ll be a trifle compared to what Ford will have accomplished. By "Ford" do you mean the company? What will Bill Ford have done personally to bring Ford back tp profit? Will his contribution to Ford's turnaround be worth $25m plus per year? That's more than Alan Mulally will make. Remember: Bill Ford has stock in the company. Lots and lots of stock. If/when Ford returns to profitability, the company will resume paying dividends and he will make millions and millions IN ADDITION to these payments.
RF,
If you want to argue he is overpaid, I will agree. I thought we were talking about there being some problem with his promise of not getting paid until the company is profitable. While I agree there may be some flip flopping, I am happy to see that he is at least betting his paycheck on the fact that they will one day be profitable again. The fact that he has so much stock is also a good thing. All corporate leaders should be so invested.