And that $60m does NOT include Bill Ford's deferred tens of millions. Anyway, United Auto Workers (UAW) Boss Big Ron Gettelfinger is not well pleased with Ford suits' '07 compensation– given his members' buyouts, two-tier wage deals and all. Automotive News [sub] gives the inside skinny on FoMoCo exec compensation for their five top talents and it certainly seems a touch… generous. Ford CEO Al Mulally is the conductor on the bank laughter express, pulling down $21.7m including "salary, bonuses, company-recognized expense for stock options and other stock awards, plus other compensation such as vehicle and travel expenses. CFO Don Leclair was Ford's second-highest paid executive, earning $11.7 million in total compensation… Americas President Mark [Tool Time] Fields was paid a total of $8.4 million. That included $1.3 million in salary and $2.9 million in incentive bonus awards." Apparently, Gettelfinger considers the pay-outs "excessive and unjustified." Well, The Blue Oval Boyz did lose $2.7b during the payment period.
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I don’t know how this can be called Pay For Performance, so I’m inclined to agree with the UAW’s view of it: Insult after injury.
I can’t slate Alan Mulally for his payment, since he needed compensation for leaving his life’s work at Boeing, but how do you justify the other two?
Mark Fields is president of Ford of the Americas, he is responsible for pulling Ford out of the quicksand in the United States, yet, Ford are losing money and haemorraging market share. I’m surprised that he still has a job at Ford, I think he should have been sacked a long time ago. I don’t believe he was the instrumental one in the turnaround at Mazda, PAG still didn’t turn a profit when he was in charge and Ford America is performing absymally.
And we wonder why the UAW are inflexible when it comes to THEIR pay…..
Yes, they lost $2.7B in 2007, but they lost over $12B in 2006, so from their perspective, they improved year over year, so they deserve what they got. Gotta love MBA logic…
I wouldn’t give any of them a dime until they get their quality products over on these shores and ditch the appliances we are sold here.
Imagine what they’d get if the company actually turned a profit.
LOL, and people still buy Fords.
I don’t see how the UAW has a leg to stand on. The executives are under an obligation to increase stock value and turn a profit (perhaps by reducing payroll costs.) The UAW is obligated to do a job for a wage.
Regardless of profit or loss, and regardless of plummeting stock value, the UAW is supposed to do job X for $Y/hour.
If you don’t like the buy-out, don’t take it. If you don’t like a two-tier wage system, work elsewhere. If you decide that your time is worth $12/hour, take the job. Otherwise, move along, son.
I can’t believe I’m going to do this, but for a better summary, check Matthew 20:1-16 for the parable of the workers in the vineyard.
UAW without a contract will be like everyone else. A lot like me. I feel fine asking for a bigger portion of the profits the Business I work for, sorry I mean with takes in. That is as long as I stay true to my integrity. What am I willing to do for it? What might I do? I dunno for sure. I’m learning.
I do not have a problem with others making a lot of cash, as long as it does not infringe on my welfare and future progress. Although I’ll take the good with the bad and improve my status (its a process). I do not perceive Mulally’s pay in and of itself as a problem. The problem I prioritize is that of the UAW and/or its members do to improve their welfare and future welfare. Also Welfare does not really mean (just) money.
Treating the Execs poorly is just that, poor behavior. A better (happier) choice is to be honest and say that they think they can do better. To ask the Execs for better performance or they will take their jobs. Treating execs (or anyone) like incompetent and shameful beings is horrible. Although many people do not know better than poor behavior sometimes. Which results in poor relations. Its an opportunity for growth (independently) as individuals on both sides.
@ kjc117 :
Did you see that news where the ex-Ford employee who struck it big with the lottery win didn’t even want a Ford? I’d be surprised if Mulally himself would buy a Ford.
If you don’t like the buy-out, don’t take it. If you don’t like a two-tier wage system, work elsewhere. If you decide that your time is worth $12/hour, take the job. Otherwise, move along, son.
Too bad jobs don’t grow on trees. Then again, given the current employment climate, such a tree would be quite barren right now.
I’d like to see the executive compensation history, year over year over year. When, if ever, have they got a pay cut, and on what basis? I wonder if the directors have even been able to tell when the wrong decisions were made.
I don’t have a problem with huge pay as long as it’s tied to results. Mulally has at least given a time limit for a return to profits. He should be held to it.
Although, I think the ultimate answer to this problem is to make corporate raiding and takeovers easier.
According to this article:
http://www.msnbc.msn.com/id/23959693/
Mulally made 42% less than the previous year. I don’t know if they calculate it the same way they do car sales (based on the number of days per month, etc), but that sounds like a pay cut to me. Yes, there is no signing bonus, but everything else is possibly tied to the performance of the company. And yes, there are perks that are included that most people do not get, unless you are a CEO of a large corporation. Don’t like his compensation? Become a CEO and take his job away from him.
jolo : From that article… "Ford’s compensation committee determined that Mulally partially met his performance goals for the year and mostly met goals for operational effectiveness and strategic direction." Partially? Mostly? And what EXACTLY were those goals? Seriously, does anyone outside of Ford know the benchmarks for their turnaround? Or are we supposed to [mostly] take their word for it?
Robert:
First, I believe Ford has a operational scorecard for success and talk about it regularly. While the detail of the scorecard might not be as transparent to the general public as you would like it does exist and is discussed weekly at meetings Mulally chairs. This is one reason (combined with a coherent strategy) I have faith that Mulally has a fighting chance to turn the Titanic around….unlike his crosstown neighbors who seem to have no scorecard nor coherent strategy. Now—-if Ford does not turn a profit by the time Mulally’s “One Ford” plan takes full shape (2010)….you and all of us will have a right to bitch big time about the compensation
Second, I believe it is a little disingenuous to continue to publish Mulally’s salary without the caveat regarding the “buyout” of his Boeing future compensation. Your credibility on this discussion would be enhanced if you did so. I mean really—-did you expect him to leave Boeing for a turnaround and work for free ?
Third—I do not begrudge someone making money if it is earned—lets stay away from “wealth envy” and thinly veiled class warfare discussion. We will certainly have our fill of this lunacy during the upcoming election.
Last, as for the UAW—I certainly did not hear any of their membership bitch when the UAW protected janitor was pulling down $75/hr in wage and benefits…..please spare me your outrage at Mulally’s salary.
umterp85 : First, I believe Ford has a operational scorecard for success and talk about it regularly. While the detail of the scorecard might not be as transparent to the general public as you would like it does exist and is discussed weekly at meetings Mulally chairs. Lest we forget, Ford is a publicly traded company whose fortunes affect hundreds of thousands of people (workers, customers, suppliers, investors, etc.). It is not unreasonable to ask that the company tell its “stakeholders” the company’s goals on the way to turnaround– especially when the people in charge are pulling down such large levels of (performance-related?) compensation. Second, I believe it is a little disingenuous to continue to publish Mulally’s salary without the caveat regarding the “buyout” of his Boeing future compensation. We have mentioned this many times. But the pension issue was “resolved” during Mulally’s first year of employment ($25m plus). The new figure is entirely ‘07-related. As for the UAW's compensation, those levels were negotiated with [previous] management. While Mulally and his minions [mostly] inherited that legacy, it is not an excuse to stick their collective noses in the trough. I was raised to lead by example.
Robert:
First, all the Ford stakeholders and shareholders (of which I am one) want and need to know about the company’s performance is PROFIT….Mulally has promised to be profitable by 2010—this is the scorecard I am holding him to. Net, I do not believe I need to know the detail operational scorecard he is working against if there is tangible evidence Ford is working against the right things. I have that evidence via factors like a coherent operational strategy and increased product quality.
I know my company (which is publically traded) does not get to this level of operational detail in public communication—nor do others. I don’t know why you are demanding this of Ford.
Second—I do believe the Mulally’s pension issue affected both 2006 and 2007 compensation…could be wrong on this one but his pension was year one compensation and it affected both years (remember he was a late 2006 hire).
Last, Mulally signed on to Ford under certain contract terms. I am quite certain Ford fulfilled their end of the bargain by paying him what his contract calls for (based upon AGREED to metrics). I do not think this is rubbing the nose in the UAW trough—-it is paying what was promised—-a precept I was raised on.
Treating the Execs poorly is just that, poor behavior.
Why? I know you gave an explanation, but it still doesn’t make sense. If an Exec sucks, he should be fired. Period. A lot of these guys have made bad decisions that would have cost others their jobs.
Treating execs (or anyone) like incompetent and shameful beings is horrible.
Who is treating these executives like “shameful beings”? If anybody should be, it’s the executives themselves. They’re being paid millions while their company is collapsing. I think they deserve to be attacked by Gettelfinger. As much as I think that the unions are a ridiculous exercise in shortsightedness, I think they’re right on here. $21.7 million is a lot to pay a CEO, regardless of credentials, when you’re dealing with a company losing over two billion dollars a year. Even if Mulally is turning the company around, his exorbitant salary is contributing to hastening Ford’s bankruptcy.
Mulally’s contract and compensation package has been public knowledge since he was hired in late 2006. To bitch about it now like it is some “new news” is purely political posturing on the part of the UAW and Gettelfinger…he knew these facts during the recent contract negotiations.
I think your may be right Luigiian. I perhaps made a mistake. I may be reacting to something I’ve read at another time I felt was shaming language. Although The UAW seem like they are comparing Mulally to other UAW workers salary. Which I think may be a shaming message. How rich Mulally deserves to be is not dependent in any way on how he compares to others, or how others are doing or how moral his behavior is. How abundant the life of someone is is not up to humans to determine.
I agree that If an Exec is not a good one he needs to be replaced for the company to progress to elect a more suitable person. Still how is a lesser (skilled) exec aware of a bad one? How is $22 million to much if its what is needed for the hire? Who am I to decide what conclusion Mulally should have? A good exec is arguably as important as a good factory. THE UAW leader may believe his pay is unjustified but based on what criteria? Results? Again how can one really hold Mulally responsible for results if one does not understand themselves how to produce results?
Also some folks seem to expect consumers to be compliant or something. That is delusional. So Mulally is getting a offer for his time. He has a right to come to his own conclusion about what he will work for. He does not deserve poor treatment for that is what I am saying. Neither does anyone. I felt he was getting poor treatment, but I may have over reacted. I do not have enough details to know if the response to the Ford execs was a shaming message. I may have processed the info through an old inner filter of mine snd reacted from one of my issues, earlier.
I totally agree with umterp85’s position (re: my earlier post). Alan Mulally had to be coaxed from Boeing (where he spent 37 years). His deal was public and always in the open. To be honest, I wouldn’t have expected Mulally to move for any less. He had a cushy job at Boeing, where he was respected and had a body of work he could be proud of. Ford wanted him? Then, pay him enough to leave. It’s only fair.
Mulally has only been in the job for 18 months and yet he’s achieved more than Rick Wagoner has in 8 years.
Mulally is cutting the bureaucracy down to get cars quicker to market, he’s paring down Ford’s bloated portfolio (The sale of Aston Martin, Jaguar and Land Rover) and ordering focus on the ones they have (i.e his insistence on making Lincoln a viable luxury brand).
However, umterp85, how do you justify Mark “Corporate jet” Fields’ pay? Like I said earlier, he’s president of the Americas’ division. He is responsible for saving Ford’s biggest market and yet, he’s presided over the worst losses and market share hamorraging the company’s ever seen, but he gets rewarded handsomely for failing at his job. In the mean time, he asks the working men (and women) for concessions. It is difficult to wrap one’s head around that state of affairs…..
Incidentally, I remember Mark Fields declaring that Ford be profitable by “no later than 2009” in his “Way Forward plan”, yet now Mulally says Ford will be profitable by 2010. Huh? What’s the target date, lads….?
Katie – Per other posts on the same topic (re: Fields)…we are in TOTAL alignment. Like you I believe Fields is an empty suit who spouts platitudes and has proven ziltch.
While Mulally inherited him—I am unsure why he has retained him. That said—I am initially encouraged from what I see from the Farley hire—Mulally’s judgement in hiring him seems sound—unlike the judgement used to progress Field’s career (I put that one on Bill Ford).
As far as the target date for profit—Mulally has set the bar at 2010—that is my expectation. Maybe 2009 now means the target date for Fields departure :)
This type of executive compensation is shameful.
I recently had the misfortune of renting a 2008 Ford Edge during a trip to Orlando Florida.
What a pile of crap. The interior was lined with cheap, hard plastic, fake metal accents, and a plain weird console/center stack.
To make matters worse, the engine was underpowered (no low-end grunt at all), and its gearing was all wrong.
At $26,000 to start, you’d think they would put a little work in design and materials.
The top five guys are pulling down $60 million in compensation, and products like the Ford Edge are the best they can do?
Good luck Ford. You guys are dead meat.
zerofoo: be careful what you wish for !
BTW—either alot of Americans are idiots or you had a bad Edge experience. I’ll bet on the former (sans the idiot comment) as the Edge has been very well received by the public (sales are good…even on the coasts) and quality is excellent per Consumer Reports and JD Power.
BTW—sit in a Highlander (the product the Edge benchmarked). You will be comparing your preference in hard plastic.
Nobody in America has produced more complex, profitable, union built products. Mulally has earned his pay by being the only guy worth hiring for his position, and also because he just could have collected fat cash and a boieng executive pension instead of going off to captain the titanic.
From Wikipedia:
Mulally was hired by Boeing immediately out of college in 1969 as an engineer and advanced through the company in a series of engineering and program management positions, making contributions to the 727, 737, 747, 757, and 767. He led the cockpit design team on the 757/767 project. Their revolutionary design featured the first all-digital flight deck in a commercial aircraft, the first two man crew for long range aircraft, and a common type rating for pilots on two different aircraft. He worked on the 777 program first as director of engineering, and from September 1992 as vice-president and general manager, and was also the Vice President of Engineering for the commercial airplane group. He is known and recognised for elevating Phil Condit’s “Working Together”-philosophy through and beyond the 777-program. In 1994, Mulally was made the senior vice president of Airplane Development and was in charge of all airplane development activities, flight test operations, certification, and government technical liaison. In 1997, Boeing made Mulally the president of the Information, Space & Defense Systems and senior vice president. This lasted until 1998 when he was made president of Boeing Commercial Airplanes, Chief Executive Officer duties were added in 2001.[2]
Just another shameless haul for the top executives.
I guess they are “worth” more than their counterparts at Toyota and Honda, eh?
The pay handed out in the executive suite in America is way out of whack with anything reasonable, including at Boeing.
In the 1960s the CEO of a major company made about 40 times what the rank-and-file worker made. Today that multiple is well over 400 times. Believe it or not, today’s CEO is not smarter or harder working than his (almost always a he) counterpart from 1968 was.
In the 1960s GM and Ford were the undisputed worldwide leaders in automotive production and profitability, today they are the struggling laggards.
The “market” for CEO pay isn’t a real market because the ones who make the decisions are the small group of people who are in fact setting the pay levels for themselves. Board compensation committees are made up of other overpaid CEOs and they hire consultants not to set reasonable pay levels but to justify ever higher payouts.
holydonut :
Did you see that news where the ex-Ford employee who struck it big with the lottery win didn’t even want a Ford? I’d be surprised if Mulally himself would buy a Ford.
The Detroit paper that ran this quote ran a retraction on the weekend. The lottery winner said he’d worked at Ford for 34 years and would never buy foreign. He’s planning to use part of his winnings to buy two Ford vehicles.
Responding to Robert Farago’s original article … it’s not just the UAW that’s unhappy about executive compensation at the Blue Oval. Quite a few white-collar workers in Dearborn are angry as well. The only one who frequently gets a pass from this outpouring of bile is Alan Mulally, who’s actually doing a lot to clean up the mess that he inherited.
Same old story, execs fail upwards. Unlike the guys on the shop floor there are no consequences for not doing your job. However many may argue that execs are being rewarded for their willingness to sell their integrity, self respect and more on that long climb to the top.
The average Joe in the US cannot even afford the cars/trucks that Ford or anyone makes for that matter-and the fat cows in the glass towers just keep getting fatter and fatter off of the stocks and bonuses and golden parachutes that they all have. I say get rid of them all-and let real car guys run Detroit and do what has to be done to make reliable cars and do it within an average Joes salary. Once upon a time AMERICANS could buy a decent car for $ 8,000-10,000 dollars. and now all we’re paying for is for the UAW to pay their employees salaries/pensions/health care;
and for the fat cows to keep getting fatter. So where’s it gonna end ? When a sub-compact costs an average of 14,000-17,000 dollars now; and people cannot even afford cars much less gas and insurance-but CEO’S can go purchase 3rd world countries on their bonus’s alone-something’s wrong with this picture.
Third—I do not begrudge someone making money if it is earned—lets stay away from “wealth envy” and thinly veiled class warfare discussion. We will certainly have our fill of this lunacy during the upcoming election.
You are correct in stating that one should not begrudge someone for earning their compensation, provided they earn it. In this case “Earning it” could be, in part, defined by how well your company performs. By any yardstick, Ford is not performing nearly as well as it should. If it were, most would not raise their eyebrows as much at the numbers. People recognize that some jobs simply are worth more than others. That is not wealth envy. As for this ‘lunacy” being at the forefront of the election, I HOPE SO!! When the top 1% get 50% of the tax breaks, when Bear Sterns gets bailed out in a weekend while homeowners lose their houses due to predatory lending practices, there should be outrage. The Bush administration has done much to drive the middle class out of existence. I have no hope that either party is going to change much though. The wealthiest people have their hands on the power levers of the country so there is no incentive for any change.
kjc117 :
April 4th, 2008 at 8:52 pm
LOL, and people still buy Fords.
The answer to the above statement is: Some people just never seem to learn.
But i guess some people are learning about FoMoCo as it is losing customers each month (consistantly) for several years now and losing them faster than the Titanic sank.
With this type and kind of management (thanks to the mis-management of and by the Ford family and board of directors) , is it any wonder FoMoCo is going to Hell in a handbasket and doing it fast? I just wonder how long and when (not if) FoMoCo will file chapter 11? Should someone start writing the eulogy and obit now? Maybe FoMoCo should change it’s name to Titanic?