DEARBORN -- Ford Motor Co. CEO Alan Mulally saw his total compensation cut by 37 percent last year, according to documents filed Tuesday with the Securities and Exchange Commission, but the package was still worth more than $13.6 million in cash, stock and stock options.
Most of that -- $8.7 million -- represents stock options that are worthless at the current share price. The automaker said Mulally has yet to receive any stock options that he could cash.
Ford said it will reduce Mulally's salary by another 30 percent for 2009 and 2010, and eliminate merit pay increases and bonuses for U.S. salaried workers because of the challenges facing the company and the auto industry.
The Detroit News also has learned that stock bonuses paid to Ford managers in the United States will be lower this year because of new limits being imposed by the company, according to sources with direct knowledge of the plan.
Details about the changes were not available.
"Ford is acutely aware that current economic conditions have had a significant adverse impact on our shareholders, customers, dealers, employees and other stakeholders," the company said in its preliminary proxy filing Tuesday. "We do not view these actions as merely symbolic, but as a necessary step in the restructuring of our business."
Mulally received a salary of $2 million in 2008. As he did not receive a bonus, his total cash compensation declined 78 percent from the previous year.
"He's sharing the burden with us -- and I think it's about time," said James Vanderbeke, a worker at Ford's Dearborn Engine Plant. "It's a good feeling to know that they're doing their share."
Other execs' pay falls
Chief Financial Officer Lewis Booth received just over $1 million in salary last year -- a decline of 66 percent over the previous year. He also did not receive a bonus, but his total compensation package was worth more than $4.7 million, including stock and stock options.
Ford Americas President Mark Fields received $1.3 million in cash, down 68 percent over 2007, and a total compensation package worth more than $4.8 million.
Jim Farley, Ford group vice president in charge of marketing and communications, received a salary of $700,000 and bonus of $660,000 related to his hiring agreement. His total compensation package was worth more than $2.6 million.
Some Ford shareholders believe that top executives still are paid too much.
Jack Leeds of Novi, who owns more than 4,000 Ford shares, submitted a resolution that would give shareholders the right to vote on compensation for Mulally and other senior executives. The vote would not be binding.
Mulally, whose compensation totaled $21.7 million in 2007, and members of his family were allowed to use company jets to travel between Dearborn and his home near Seattle last year. It was not clear how the company's decision to sell its corporate aircraft in the wake of congressional criticism last fall would affect that benefit.
Short of earnings goal
In its filing, Ford revealed that it had fallen well short of its internal earnings goals. The company had hoped to limit its loss to $400 million before taxes last year; its actual losses totaled $14.6 billion.
Ford was required to file the preliminary proxy because it will ask shareholders at its annual meeting in May to approve a resolution allowing it to issue a substantial amount of new stock to the Voluntary Employees' Beneficiary Association, or VEBA, it is establishing with the United Auto Workers to pay for hourly retiree health care.
The New York Stock Exchange requires companies to seek shareholder approval for any new stock issue that represents more than 20 percent of outstanding shares.
Ford's agreement with the UAW allows, but does not require, the company to cover half of its VEBA obligations with new company stock every time a payment is due to the fund.
"If we chose to issue stock every time we were allowed to, we would probably exceed that (20 percent) sometime next year," said Jerome Zaremba, Ford corporate counsel.
Ford's final proxy is due April 3, pending a review of the preliminary filing by the SEC.