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.