Ford’s CEO Mulally Gets Pay Slashed After This

Ford Motor Company (NYSE:F) fell short in three crucial areas last year: market share, cash flow, and profit. As a result, CEO Alan Mulally has received a pay cut of 29 percent. The board of America’s second largest auto manufacturer awarded the chief executive a 2-million-dollar salary, $3.95 million in bonuses, and $15 million in stock, according to regulatory filings. This payment brings the total amount he has earned since joining the company in 2006 to a total of $162 million.
Ford has undergone large-scale restructuring efforts in Europe, where a dismal economic climate has taken its toll on a number of manufacturers, and served Ford some significant losses as well. Fortunately for the company, North American sales were up, and the profits carried the dragging markets, although not enough to reach the company’s targets.

You Just Got Lucky! Our Stock Picks Newsletter is Half OFF through St. Pat’s Day! Click here to Take Advantage Now!

“To the mass majority of people, these are enormous numbers,” David Whiston, an equity analyst with Morningstar, told Bloomberg. “But is it excessive? It really depends on who you ask. Ford shareholders, especially those that bought in the low-single digits, are probably thinking Mulally’s worth every penny.”
With the given salary figures, Mulally has made an average of $73,000 per day since 2006, and that assumes he worked all 365 days of the year.
However, Ford’s stock rose 20 percent last year. At Friday’s close, Ford shares were trading at $13.45, demonstrating the enormous rise that Ford’s value has seen over the past year and the past several years. It is a noticeable improvement from the approximately $2-per-share price the stock had four years ago.
Last year, the company also reclaimed investment-grade credit ratings, paid out its first dividend since 2006, and reported net income of $5.67 billion, according to Bloomberg. So all in all, it was a good year for Mulally and his company, and for that kind of money, those are the performance numbers that you want to see.

You Just Got Lucky! Our Stock Picks Newsletter is Half OFF through St. Pat’s Day! Click here to Take Advantage Now!

Mulally has also been a driving force in Ford’s overhaul of its international operations; he initiated substantial cost cutting measures and reformed the company’s lineup of vehicles. With the success of Ford’s turnaround under his belt, Mulally has discussed leaving his position in the next few years, but no sooner than 2014, and Ford is reportedly grooming chief operating officer Mark Fields to replace him.
“It’s a major accomplishment for him to have come in from outside the auto industry and unify Ford and get rid of all those fiefdoms that they had regionally,” Whiston said of Mulally. “They’re bringing the company up to its true capabilities. Before, there was a lot of waste.”
Don’t Miss: Don’t Forget About the S&P 500.