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March 30, 2012 2:11 pm
Ford Motor said it awarded Alan Mulally a package worth $29.5m in 2011 – an unusually rich return for the car industry, and one likely to feed the ongoing global debate about executive pay.
The US carmaker disclosed Mr Mulally’s earnings, along with large pay packages for four other senior Ford executives, in a proxy statement for its 2012 annual shareholders’ meeting filed with the US Securities and Exchange Commission on Friday.
Ford’s chief executive is credited with transforming the company from a chronic lossmaker with poorly ranked vehicles into one of the world’s most profitable mass-market automakers. The company reported an operating profit of $8.8bn last year, and resumed paying dividends for the first time in five years.
However, Mr Mulally’s pay packet could come under criticism as the company’s share price dropped 36 per cent in value last year, when Ford was struggling with volatile commodity prices, natural disasters in Japan and Thailand, and the European debt crisis.
Mr Mulally earned $2m in salary, $5.46m in cash bonus, stock options worth $7.5m, and performance-based restricted stock worth $13.9m last year, Ford disclosed on Friday. Additionally, he received $612,000 recorded in the proxy as “all other compensation”.
Ford’s chief executive was the car industry’s best paid in 2010, when he earned $25.8m in salary and stock, and will probably remain so this year. However, some of Ford’s competitors, including Renault/ Nissan and General Motors, have not disclosed their chief executives’ earnings for 2011 yet.
Sergio Marchionne, Fiat’s chief executive, earned salary and stock worth $19m last year, the Italian producer, which owns Chrysler, disclosed last month.
Dan Akerson, GM’s chief, received compensation worth $9m in 2010, and the company is due to report his 2011 earnings in April. Unlike Ford, which did not receive a taxpayer-funded bailout in 2009, GM is restricted by the US government in how much it can pay its top executives.
According to Towers Watson, the international compensation firm, the average compensation for top auto industry chief executives in 2010 was $15.3m.
Ford defended Mr Mulally’s generous pay award by pointing to its strongly improved profitability and cash flow, reduced debt, and rising market share in the US.
Over the past three years, Ford’s stock has appreciated 370 per cent, the company said, compared to 44 per cent for the S&P Index.
Ford awarded its blue-collar workers bonuses worth up to $6,300 for 2011, depending on how long they worked.
Among other Ford executives, Bill Ford, the company’s chairman, received salary and other compensation worth $14.5m last year, the company disclosed on Friday. Mark Fields, head of Ford’s Americas operation, received $8.8m, Ford said.
Lewis Booth, the company’s outgoing chief financial officer, received $7.7m in 2011. Joe Hinrichs, head of Ford’s Asia-Pacific and Africas unit, received $5.3m, Ford said.
The company scheduled its annual meeting for May 10 in Wilmington, Delaware.
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