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post #1 of 22 (permalink) Old 04-05-2007, 06:39 PM Thread Starter
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we all have the wrong job.

Ford CEO Alan Mulally got $28 million, for 4 months of work.

Link to CNN article
http://money.cnn.com/2007/04/05/news...ex.htm?cnn=yes

man.. i would only work 2 months and take like 10 million

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post #2 of 22 (permalink) Old 04-05-2007, 06:42 PM
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Isn't Ford going belly up? Or is that another American car mfg I'm thinking of?

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post #3 of 22 (permalink) Old 04-05-2007, 06:43 PM Thread Starter
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Quote:
Originally Posted by down_on_monday View Post
Isn't Ford going belly up? Or is that another American car mfg I'm thinking of?
Ford reported net loss in 2006 of $12.7 billion

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post #4 of 22 (permalink) Old 04-05-2007, 06:44 PM
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Ouch....but yet the CEO makes an ass load.

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post #5 of 22 (permalink) Old 04-05-2007, 06:48 PM
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Just think how much he would have earned if Ford made $.

That is pretty stupid, isn't it. You have to wonder about how our industry leaders are motivated to succeed.

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post #6 of 22 (permalink) Old 04-05-2007, 06:52 PM
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My ex-girlfriend's uncle is CFO of Coors and he only brought in about $6-8M a year. But he did get to spend a lot of time with the coors twins so I guess that makes up for the difference.

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post #7 of 22 (permalink) Old 04-05-2007, 06:52 PM
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From what I read Ford paid out bonuses last quarter, too. Many CEO's are paid WAYYY to much. Just look at the who ran Home Depot.

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post #8 of 22 (permalink) Old 04-05-2007, 06:53 PM
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Only $6-8 million? hahaha. About $500 of it is mine too....mmmmhmmm coors.

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post #9 of 22 (permalink) Old 04-05-2007, 06:55 PM
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Yeah reported salary is about $500-$700k the rest were all paid out in bonuses. At least that is what he told us.

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post #10 of 22 (permalink) Old 04-05-2007, 07:09 PM
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You should consider the amount of money that a good CEO/CFO can generate usually greatly outweighs the money they earn. There are instances like this one with Ford where they posted a net loss, but look at Michael Eisner, he gets paid HUGE amounts of money, but he pulled Disney from being in the red in 1999, to posting $25 billion in revenue in 2000, with over $1.9 in profits, even if they paid him $100,000,000, it's still only 5% of the PROFIT he helped generate that year alone.

http://www.forbes.com/2001/01/16/0116faceseisner.html

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post #11 of 22 (permalink) Old 04-05-2007, 07:15 PM
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I saw that on the news and was like WTF.... He was getting payed shitloads less in his previous job...
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post #12 of 22 (permalink) Old 04-05-2007, 07:18 PM
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Brian, that is the way it should work, shouldn't it?

Internally I look to much more revenue for my business than I will ever take out and my good employees do too.

There is nothing firm, nothing balanced, nothing durable in all the universe. Nothing remains in its original state, each day, each hour, each moment, there is change. Change is the essence of life. Embrace change as you do life. To fight change is to live in the past.
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post #13 of 22 (permalink) Old 04-05-2007, 07:21 PM
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Quote:
Originally Posted by Blade Runner View Post
Brian, that is the way it should work, shouldn't it?

Internally I look to much more revenue for my business than I will ever take out and my good employees do too.
Absolutely, I didn't mean to insinuate otherwise. If he's changing things and pulling the money in, he should be rewarded as such. I'll throw out a little bit of social justice here too though, no man needs to earn that much money in our world of poverty, but what he does with it is up to the individual to decide.

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post #14 of 22 (permalink) Old 04-05-2007, 07:24 PM
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Not that it matters, but the $28mm is not accurate, just another case of the press making numbers look the way that they want.

Fords loss is not his fault, so that isn't relevant to his compensation.

Here is what he was paid.

He was hired at a $2mm base salary.

$7.5mm hiring bonus. (although the article doesn't state the distribution, it is highly doubtful that he was paid that all at once for tax purposes, if nothing else) That was the incentive to leave a very highly compensating job that he was already at. Amazing isn't it? We are amazed at what athletes get and impressed, even if they are on a losing team (most of the top paid athletes are). But when we have a guy who is in the top .01% of experience in running a business, we bitch when he gets paid far less than many star athletes. I'll bet there are a heck of a lot more $10mm athletes on losing teams than CEOs making $10mm or more on contract.

The $11mm offset was not to compensate him for performance at Ford, it was to pay him what he gave up at Boeing. It was already his money if he would have stayed where he was.


His relocation costs were paid at $55,469. That is not income, that is offset expenses and none of it goes to him. FWIW, $25-50k relo packages are the norm for many companies with positions over $250k. Again, that is NOT income.


Stock - it is all restricted. The grants was only $920k in stock, AND it is restricted. Translation, he owes the taxes on it at ordinary income (~$400k of it) even though he can't exercise, sell or use the stock. In other words, on PAPER, he has the stock, but he has no cash value from it, only the IRS debt, which is due in spite of the fact that it is restricted.

Restricted Options that aren't vested yet? - Standard for any exec comp package, however, they have no value unless he performs and the stock price is higher at the end of the vesting period (typically 3-5 yrs). Otherwise they have no value at all. And even then, the VALUE is not the face value, but is is the DIFFERENCE between the option price and the current price at the time of exercise. So a $8.01 share is worth $.01 if the option is at $8 per share.


Translation - He has ONLY been paid his base salary and his hiring bonus. There were no additional bonuses to him based on the article.

So here is the question. Who should we be pissed at?

The Board of Directors hired him, and approved his compensation package.

And winning or losing, top level CEOs are far rarer than professional athletes. you have to pay them what they contract for, just like anyone else.

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Last edited by Wink; 04-05-2007 at 07:38 PM.
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post #15 of 22 (permalink) Old 04-05-2007, 07:35 PM
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Wink that makes it easier to understand and FORD can't do under until I get my superduty

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post #16 of 22 (permalink) Old 04-05-2007, 07:41 PM
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I want a turbo-diesel excursion! (and the cash to pay for it)

Anyone wanna offer me a hiring bonus?! (I only need $100k signing bonus)

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post #17 of 22 (permalink) Old 04-05-2007, 07:43 PM
 
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Quote:
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I want a turbo-diesel excursion! (and the cash to pay for it)

Anyone wanna offer me a hiring bonus?! (I only need $100k signing bonus)

Lifted with big tires and an exhaust and turbo upgrade. Man


I could go for one too Wink.
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post #18 of 22 (permalink) Old 04-05-2007, 08:19 PM
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Gould has one, and it is NICE!!

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post #19 of 22 (permalink) Old 04-05-2007, 08:28 PM
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Wink:

Personally I believe the hiring bonus and the salary offset should have been contingent on a minimal length of employment. With a $2,000,000 base, there is very little motivation to stay employed with Ford or to do a good job. He now gets the $11,000,000 salary offset for doing nothing vs. working for Boeing . Add the signing bonus and he has even more of a reason to walk.

You hit the important issue right on the head! CEOs have to be treated like professional athletes. In this case Ford negotiated poorly in setting up the contract and are stuck. On the other hand, Alan is walking away with a pile of cash that even after ordinary income taxes is rather significant for 4 months of work. Smart boy. There was probably more effort on his part in the hiring negotiations than on the job.

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post #20 of 22 (permalink) Old 04-05-2007, 08:31 PM
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Quote:
Originally Posted by thepro8 View Post
My ex-girlfriend's uncle is CFO of Coors and he only brought in about $6-8M a year. But he did get to spend a lot of time with the coors twins so I guess that makes up for the difference.
Damn, if he ONLY makes $6million to $8million, I must be frickin poor at what I make J/k, I know what you mean, just wish I could say that's all I make
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post #21 of 22 (permalink) Old 04-05-2007, 09:40 PM
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The other thing to keep in mind is that BoD's take care of their own, and many times the same cast of characters sit on multiple boards of different companies and are or were CEOs themselves and they tend to use the revolving door methodology.

A former CEO sits on the BoD there who hires their friend to be CEO with this nice package and he then goes onto sit on a board over there and they hire the first guy and load his ass up to return the previous favor.. lather, rinse, repeat. That sort of shit got so old in Silicon Valley. Guys hopping from board to heads of companies and visa versa collecting cash and just cycling through at the expense of the stock holders.

Everyone Exaggerates

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post #22 of 22 (permalink) Old 04-05-2007, 09:50 PM
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Arch, all good points. I think the part that was missing here was the Golden Parachute. Those were HUGE in the hey day.

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