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