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UPDATE 2-Ford cuts CEO's pay as company falls short of targets
March 15, 2013 / 2:05 PM / 5 years ago

UPDATE 2-Ford cuts CEO's pay as company falls short of targets

* Mulally received $21 mln last year, vs. nearly $30 mln in
    * Ford met only 3 pct of market-share goal last year
    * Company lost $1.8 bln in Europe last year
    * Mulally still earns much more than GM, Chrysler CEOs

    By Deepa Seetharaman
    DEARBORN, Mich., March 15 (Reuters) - Ford Motor Co 
slashed the 2012 compensation of its chief executive officer by
29 percent, in part because the No. 2 U.S. automaker missed some
key goals for market share, profit and cash flow, the company
said on Friday.
    Alan Mulally, who has led Ford since 2006, received $2
million in salary and nearly $4 million in cash bonuses, Ford
said in its preliminary proxy filing. His overall pay was $21
million, including stock awards, options and other perks.
    That compares with an overall package of $29.5 million in
2011. This included a one-time restricted stock grant, worth $8
million at the time, for the CEO's role in reducing the number
of Ford's vehicle platforms, a move that could cut costs and
    "We believe our 2012 performance clearly shows our
management team performed exceedingly well in a difficult
environment," Ford said in its proxy statement.
    Mulally, 67, is credited with spearheading Ford's turnaround
by mortgaging the automaker's assets, including the Blue Oval
logo, and executing his "One Ford" strategy to cut costs. 
    Ford beat its goals for cost controls and quality last year,
but fell short of its benchmarks for profit and cash flow, two
areas of heavy focus. In 2012, Ford met about 75 percent of its
performance targets, Ford said in its proxy.
    Ford's pretax profit was $8 billion, lower than the $8.7
billion aim. Its global automotive operating-related cash flow
was $3.4 billion, less than the desired $4.6 billion. Ford said
it met only 3 percent of its market-share target. 
    Europe was a key challenge last year. In 2012, Ford lost
$1.8 billion in the region, where a punishing downturn has hurt
industry sales. The company predicts it will lose another $2
billion in Europe in 2013. 
    Ford shares were off 0.2 percent at $13.40 on Friday
afternoon on the New York Stock Exchange. The shares have gained
about 3.5 percent so far this year.
    Between 2006 and 2008, Ford lost $30 billion. But the
company made a profit of $5.7 billion in 2012, its fourth
straight year in the black. 
    The automaker also achieved an investment-grade credit
rating from two agencies, allowing the company to reclaim assets
that it mortgaged to pay for its turnaround.
    Mulally's efforts helped Ford avert a federal bailout in
2009, when a global recession pushed General Motors Co 
and Chrysler Group LLC go through government-financed
bankruptcy restructurings.
    Mulally is paid far more than his counterparts at GM and
Chrysler. GM CEO Dan Akerson was given $11.1 million in
compensation for his 2012 performance, a person familiar with
the matter said last month. 
    Chrysler CEO Sergio Marchionne received $1.2 million in
stock awards and other compensation, according to the company's
annual regulatory filing.
    Over the last year, investors and analysts have raised
several questions about the timing of Mulally's eventual
retirement. Last year, Ford announced that Mulally agreed to
stay on as CEO at least through 2014. 
    Ford also promoted Mark Fields to chief operating officer,
one of several other management changes made last year. Fields,
who was paid $8.9 million in compensation in 2012, is considered
a frontrunner to be Ford's next CEO.
    Executive Chairman Bill Ford's compensation came to $14.8
million last year. Chief Financial Officer Bob Shanks earned
slightly more than $5 million, while Jim Farley, head of global
marketing, earned $4.6 million.

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