Ford Awards Top Two Execs $99 Million in Stock for Turnaround
Accompanying the former Boeing executive in the windfall was Executive Chairman Bill Ford, who received $42.4 million worth of shares. Ford paid the unrestricted stock to its top two executives as part of an incentive plan for 2009 and 2010, Bloomberg News reported, citing Securities and Exchange Commission filings.
Mulally's stock award is equal to about $27 for each of the 1.94 million cars the Dearborn, Mich.-based automaker sold in the U.S. last year. Overall, Ford sold 19% more cars in the U.S. during 2010 than in the previous year, although 2009 was one of the worst in recent memory. That sum, of course, doesn't take into account the millions of vehicles Ford sold in overseas markets, including Europe, India, China and Southeast Asia.
Both executives' total compensation for 2010, including salary and benefits, will be published in the company's proxy statement, which is expected to be filed with financial regulators in coming weeks. The automaker withheld some of the stock awards to cover the executives' tax liability, company spokesman John Stoll told Bloomberg. After taxes, Mulally received $33.4 million and Ford got $25.1 million.
"This is an indication of the performance that the company has experienced under Alan Mulally and Bill Ford's leadership," Stoll told the news agency Tuesday. "Ford is committed to aligning executive compensation to the company's performance and long-term shareholder value."
Share Prices Up More Than 1,000%
The automaker has come a long way since Mulally joined its ranks in September 2006. At the time, Ford was bleeding money and reported losses of $12.6 billion for the year. The company would go on to lose billions more during the next two years.
Unlike its domestic rivals, General Motors (GM) and Chrysler Group, Ford didn't seek a government bailout during the financial crisis, which has aided its turnaround. GM and, to a lesser extent, Chrysler, have suffered from image problems since accepting a combined $60 billion -- the bulk of which went to GM -- to aid in their restructuring. GM has acquired the nickname "Government Motors" among detractors of the bailouts.
Ford's stock price also has benefited from the company's resurgence. After falling to a record low of $1.26 per share in November 2008, it rebounded to a high of $18.97 on Jan. 13. The stock has lost a bit of ground since then, however, and was trading Tuesday around $14.50 a share.
In addition to their stock awards, Mulally and Ford were also given stock options. Mulally, 65, received 884,433 stock options, while Ford, 53, got 412,735 options. The executives have until 2021 to exercise the stock options, which have a strike price of $14.76. The pair also received restricted stock units that can be converted into shares in 2013. Mulally received 543,734 restricted stock units, while Ford was awarded 253,742, according to the federal filings.