In case you were wondering, Alan Mulally is a wealthy man, and he’s about to get even wealthier: we hear that Mulally has received a whopping $58.3 million stock option package from Ford Motor Company. The company says that it’s compensation for his work bringing the company back from the brink during the 2009 automotive industry collapse, but we say it’s one of the world’s largest thank-you notes.
Mulally took the job as CEO of Ford Motor Company in 2006, just a couple of years before recession gripped all three of America’s biggest automakers. Under Mulally’s tutelage, Ford mortgaged nearly all of its assets, giving it enough capital to avoid receiving bailout funds from the U.S. government–a fate that greeted both of Ford’s American competitors, the Chrysler Group and General Motors.
Obviously, fortunes have turned around for all three, and Mulally’s compensation has risen just as Ford’s future looks brighter. Mulally’s most recent compensation package, according to Automotive News, included 1.28 million stock options which can be sold as early as next year, as well as 376,016 so-called restrictive stock units that Mulally can convert to shares and sell in 2014.
Those 1.28 million stock options wouldn’t have been worth much at the height of the recession–Ford stock hit a low of $1.01 in November of 2008, meaning Mulally’s package would have been worth just $1,292,800. Today, the package is worth considerably more: each option is worth $12.46, which means Mulally stands to earn $15,948,800 from stock options alone. Between stock options, stock, and restricted units, Mulally’s 2012 windfall is $58.3 million.
We should note two things: first, Mulally will actually take home $34.5 million after taxes (meaning he pays an effective tax rate of 41 percent) and he’s not the only Ford employee getting a bonus. Under the terms of the Ford/UAW 2011 contract, American plant workers received about $16,000 in bonuses, between a $6,000 signing bonus, a profit-sharing deal that was said to be worth about $3700, and a $7000 inflation protection/cost of living increase.
Either way, it looks like Mr. Mulally–and Ford — is enjoying the company’s return to success.
Source: Automotive News (Sub. required)