Ford CEO to accept $1 salary, will still get over $20 million in other compensation

On the face, Alan Mulally, President and Chief Executive Officer of Ford Motor Co. is making valiant strides in his bid to win over the American congress and public. However, when you dive a little deeper, you will see his accepting a $1 salary is nothing more than an ersatz attempt to cover up his true goals, to receive the vast majority of his compensation (in 2006 this totaled over $28,000,000, and in 2007 nearly $22,000,000), as his salary in 2007 only represented a mere 10% of his total compensation. This is not an attempt to sabotage the man, nor is it an attempt to discredit what he could possibly do for Ford, the purpose is to make everyone aware of the complete picture.

Taking a deeper look into Ford’s financial statements (namely their 2008 proxy statement, see pg. 55 for executive compensation) you will see that Salaries in total for officers and directors compared to total compensation is rather insignificant. In 2007, the total compensation for all (top) directors and officers  was around $60,704,000, while their salaries were a mere 7,838,000, or less than 13% of their total pay!

These guys are not paid like most people folks, where your salary constitutes 90% or more of your total pay, it’s the inverse, and Mulally and his counterparts are trying to make us feel all warm and fuzzy inside thinking they are working for nothing, when in reality they have alot on the line.

My opinion and point in writing this is as follows;

  • Giving up 10% is a nice stride, but their other option is to give it all up as they know if they go bankrupt they won’t get anything.
  • Giving the Big 3 money is not in the best interest of the entire American Public, rather in the interest of less than 1% of the Public.
  • Giving these guys money hurts the efficient businesses and rewards the poor management of these companies, and stifles innovation

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