| The Ford Motor Co. said Allan Mullaly, | | | | million stock option grant is $1 million |
| the company's new CEO, will be getting | | | | more than the baseline bonus promised by |
| an additional $1M bonus. The board of | | | | the board when he was hired last fall. |
| directors of the company has approved a | | | | The bonus comes in the form of stock |
| $6 million stock option bonus, $1 | | | | options and is payable over the next |
| million more than what was previously | | | | three years. |
| promised for Mullaly. | | | | Ford is now preparing to enter |
| Ford said Mullaly's bonus was based on | | | | negotiations with United Auto Workers |
| his performance during the first several | | | | (UAW) and is anticipated to ask union |
| months of working in the company. For | | | | workers to accept sacrifices to help the |
| 2007, his total compensation package | | | | company rebound. UAW President Ron |
| could add up to $16.5 million. | | | | Gettelfinger has been highly critical of |
| According to documents filed with | | | | executive bonuses proposed by bankrupt |
| Securities and Exchange Commission, | | | | Delphi Corp. according to analyst |
| Ford's board also approved cash payments | | | | Bradley Rubin of BNP Paribas, Wall |
| to other senior executives to compensate | | | | Street is unlikely to care much either |
| them for a bonus program the company is | | | | way. "What's a million? Plus or minus a |
| scrapping in favor of a new compensation | | | | million dollars is not going to |
| plan. | | | | determine whether Ford succeeds or |
| The news about Ford's payouts came as | | | | fails," Rubin said. "You've got to pay |
| thousands of salaried workers who signed | | | | the guy for the risks he's taking." |
| up for buyouts or early retirement | | | | Rubin added that Mulally quit his job as |
| packages bid farewells to their friends | | | | the CEO of Boeing Co., a commercial |
| and workmates. The announcement was also | | | | aircraft division, to come and rescue |
| close to the reporting of the 2007 $12.7 | | | | the ailing Ford. The transfer was made |
| billion loss report of the automaker. | | | | at a time when the company has archrival |
| "(It was a) sad day today, lots of | | | | Airbus SAS against the ropes. |
| people I knew left," one worker said. | | | | Ford's board also changed the |
| "Many of the engineering offices look | | | | performance-based bonus plan for its |
| like Swiss cheese with all of the empty | | | | senior executives. This is to reflect |
| cubicles that have opened up." | | | | the "one plan, one team" approach |
| Ford spokeswoman Becky Sanch | | | | favored by the new CEO. The plan will |
| acknowledged the timing was less than | | | | base executive bonuses on the same |
| ideal. "There's no ideal time to | | | | metrics as other salaried workers. |
| separate for our employees. Today's | | | | Nevertheless, since the current plan was |
| announcements were driven by SEC | | | | already part of executive contracts, the |
| disclosure requirements," Sanch said. | | | | company agreed to buy them out with a |
| "Regarding the overall pay, the company | | | | one-time cash payment. |
| has always said it is committed to | | | | The company did not disclose the actual |
| providing employees with competitive pay | | | | amount involved in the buy out |
| and long-term incentives," she further | | | | transaction. Their new bonuses for the |
| notes. The announcements were critical | | | | senior executives, which can total eight |
| and demanded from the company. No amount | | | | times their base salary depending on how |
| of force and efficiency from EBC Active | | | | close they come to meeting the new |
| Brakes Direct could prevent the | | | | goals, will be deducted by the amount of |
| revelation. Timing is no moment because | | | | that payment. |
| it is not one of the opportunities | | | | Ford said the new bonus plan will be |
| afforded the company. | | | | more consistent and allow each |
| Mulally's bonus is part of a | | | | white-collar worker to be judged by the |
| compensation package potentially worth | | | | same standard. The new bonuses will be |
| more than $35 million for 2006 and this | | | | paid in equal shares of stock options |
| includes one-time hiring bonuses. The $6 | | | | and restricted stock units. |