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Ford execs take 30% pay cut

 
8 1,334 views Feb 25, 2009
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Ford execs have reason to smile, with analysts also predicting profitability in less than two years

Ford execs have reason to smile, with analysts also predicting profitability in less than two years

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Ford has been one of the most active of the Detroit 3 carmakers when it comes to cutting executive pay and white collar jobs, and today the Blue Oval announced its latest measure for weathering the economic storm and turning around its slumping performance. Hourly workers at Ford will get yet another round of buyout and early retirement offers, while the company’s top two executives will take a 30% pay cut.

Ford CEO Alan Mulally and executive chairman Bill Ford Jr. will see the salary reductions this year and next, according to a memo obtained by The Associated Press. Interestingly, Ford Jr. had previously forgone his entire salary and was prepared to stick to the plan until the company was posting profits again.

The executive pay cuts are part of the company’s effort to stay afloat without government aid and remain competitive with General Motors and Chrysler. It's not clear how many other executives will also experience reduced pay but according to the memo the entire board of directors will not receive cash compensation this year.

As for the latest round of buyout and early retirement plan, up to 42,000 U.S. hourly workers are expected to be offered the option. Other cost cutting measures include suspension of cost-of-living pay raises, as well as the elimination of lump-sum performance bonuses and some end-of-the-year bonuses.



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Comments (8)

  1. ma_gus avatar Gus Chyba Posted: 2/25/2009 8:03am PST

    Maybe Ford gets it.
     
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  2. ma_www.mywheelsonwalls.com avatar www.mywheelsonwalls.com Posted: 2/25/2009 9:01am PST

    Hang on Gus not so fast. Did'nt Bill Ford announce in 07 he was only taking a dollar in pay for 08 until Ford turned around?

    What Ford does get though is that by not accepting government money your not on the government hook. The fact that they went out to the credit markets six months before they crashed and secured 24 billion dollars was a very smart move.
     
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  3. ma_Chris avatar Chris Posted: 2/25/2009 10:19am PST

    mwow: to hell with having a government backed loan.. i know there arent many people out there buying cars but how many of those who are buying cars are going to ford now because they ARENT asking for loans?

    its the best advertising campaign ever. everyone wants to cover how GM and chrysler is getting bailed out, and every time they do, they remind everyone that ford ISNT getting that money cause they just dont need it. wait.. why doesnt ford need money? they must have good products. who would have thought!
     
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  4. ma_www.mywheelsonwalls.com avatar www.mywheelsonwalls.com Posted: 2/25/2009 12:27pm PST

    Chris- I think you'll be surpised how many consumers subconciously are staying away from GM and Chrysler. In regards to Ford they do make a great product and I myself will be in the market for a new car this May as my current lease expires. So whats on the table? a Ford F250 crew cab or a VW Touarag V10 TDI. Complete opposites on the customer demographic spectrum but they both check all the boxes and tow 7,000 pounds plus!!!!
     
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  5. ma_gus avatar Gus Chyba Posted: 2/25/2009 4:39pm PST

    MWOW - The Tourag is the better vehicle for sure, but it's got to be loads more money?

    I've always liked Fords, they aren't the best cars (I've owned several Mercedes, so I know what is possible at the high end) but they are great value for the money. My Expedition is a swiss army knife and has never given me 1 problem in 80,000 miles, and my new Mustang GT convertible is just such a blast for 1/2 the price of a CLK500, which as for as I can tell is the only other mid-size, high horsepower, RWD, 4 seat convertible on the market.
     
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  6. ma_www.mywheelsonwalls.com avatar www.mywheelsonwalls.com Posted: 2/25/2009 11:52pm PST

    Gus- Have you priced out an F250 crew cab with 4wd lately? I too almost fell over and now appreciate dealer showrooms with couches, now only if they came with professional help too....
     
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  7. ma_RichardLevick avatar RichardLevick Posted: 2/26/2009 12:35pm PST

    It is wonderful to see some leadership involving executive compensation in today’s market. Ford seems to have gotten the hint that many other large companies have yet to pick up on: the public needs to know that executives are sharing in the economic hardship that they are in part responsible for.

    Since Ford has made the announcement, their stock price has jumped nearly 30 percent (at the time of this writing), providing ample reason for others to follow its example.

    You can read more about how Ford’s sacrifice may pay big dividends at my blog: http://www.bulletproofblog.com/2009/02/25/ford-executives-sacrifice-just-might-pay-off/
     
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  8. By  Don Posted: 9/21/2010 1:29pm PDT

    http://dtp-rouge-issues.blogspot.com/
    Ford doesn't care about anyone, either does the UAW anymore.
     
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