In April, Ford reported Mr. Mulally received $2 million in base salary, a $4 million bonus and more than $11 million of stock and options in 2007. His base salary was unchanged over 2006. Mr. Mulally has earned nearly $50 million in compensation since taking the helm of the auto maker.
Why exactly are we listening to a man who has been paid $50 million while his firm is going down the toilet?
Here is the Wall Street Journal article, where I got this data: Ford’s CEO obscene pay package
In the same article it mentions that the GM CEO got a 33% bump in salary to $2.2 million while GM lost $38.7 billion.
Are you kidding me? Why should I pay my hard earned tax dollars to these bloodsuckers?
If the CEOs were the only ones overpaid, the automakers would be turning a profit. But when you spent $73 per hour in labor costs on high school grad factory workers — while your competition spends about half as much — that’s unsustainable. Are you outraged by the overpaid factory workers too?
One thing seems clear: if Ford goes bust, Mulally — who had a successful career at Boeing previously — will probably find another executive job paying him millions of dollars per year. Dems aren’t eager for a bailout to maintain his salary. On the other hand, if Ford goes bust the UAW workers will be unlikely to make six figures with OT in any other manufacturing job. The motivation behind the bailout is to save their inflated wages, not Mulally’s.
I couldn’t agree more with you Aaron. One of my biggest frustrations right now is seeing CEOs manage their companies NOT was is good for the shareholder, rather what is good for their own pocket. How many CEOs and their management teams are foregoing bonuses or taking cuts in pay? I haven’t seen many press releases about that topic, rather its ‘company xyz restructuring’ aka – we are firing 10-20% of our staff so our top 10 executives can still get their fat salaries and keep up their lifestyle.
It appalls me that the CEOs of the big three come to DC with their hand out and take the company jet to get there. Couldn’t they at least come on one jet, not three?
Also, the CEOs should all be ashamed of themselves, their testimonies to the government in my opinion was beyond poor, it was unacceptable. Basically they come with hands out and tell the government what kind of catastrophe they will cause if they don’t cut us a check. Rather they should of come to DC with a detailed plan showing why they need this money, what they plan to do with the money, how the money will not just save them but make them better going forward and when they expect to repay the money.
Adam,
Let’s say you were made the CEO of GM or Ford tomorrow. How would you make the company ‘better’? Bear in mind that you must spend twice as much on labor costs as your competitors, and, instead of just building the high-margin products that can overcome that handicap, you must continue to build low-margin small cars to meet CAFE regulations. Bear in mind also, that there is one car in America for every American old enough to drive, and auto sales (like home sales) have been goosed by cheap credit for the last several years.
Now, how do you fix the automakers without cutting labor costs or reducing capacity?
I would put together a pre-packaged bankruptcy plan and wipe the equity holders and give the debtholders equity. I would also get the union to give pension concessions for a stake in the equity of the company.
Most objective observers seem to agree that bankruptcy is the viable option, but I think the CEOs have said that bankruptcy is off the table and the union has said it won’t make any more concessions.