Ford also gave its top executive 613,747 stock options as part of an incentive plan for 2013, according to a filing yesterday with the U.S. Securities and Exchange Commission. Mulally is restricted from selling the 882,352 shares of stock until March 4, 2016. The options, with a strike price of $15.37, vest in thirds annually over the next three years.
Mulally, 68, will receive other compensation for 2013, including salary and benefits, to be disclosed later this month. Though briefly wooed by Microsoft Corp. last year to be its CEO, Mulally has said he’ll stay at Ford at least through December. Since arriving from Boeing Co. in 2006, he has led a turnaround that let Ford avoid the bailouts and bankruptcies that befell predecessors of GM and Chrysler Group LLC.
“He’s done so much for the company, at this point, they have to continue to provide him with very rich compensation,” David Whiston, an equity analyst with Morningstar Inc. in Chicago, said in a phone interview. “Other than turning around Lincoln, he’s really done everything he can do at Ford.”
|Ford Motor CEO Alan Mulally. (Bloomberg)|
In addition to the new awards, Mulally now is free to sell 376,016 shares, worth $5.9 million at the close on March 5, which he received in 2012 for the company’s performance in 2011. Ford fell 0.3 percent to $15.62 at the close in New York, after trading for less than $2 five years ago.
“We are committed to align executive compensation with the company’s business performance and to tying a significant portion of executive compensation to long-term shareholder value,” Todd Nissen, a company spokesman, said in a telephone interview, adding that Ford outperformed the S&P 500 over the past five years.
Mulally is credited with cultivating a more collaborative culture at Ford, which had long been characterized by backbiting. He also slashed costs by closing factories, cutting workers and selling off European luxury lines including Jaguar. He restored profits by broadening Ford’s lineup with fuel-efficient models loaded with technology, such as voice-activated controls. Ford has earned $42.3 billion in the last five years after losing $30.1 billion from 2006 through 2008.
Mulally has received total compensation of about $303 million since 2006, and last year Ford made him the world’s highest paid automotive CEO. For 2012, Ford paid Mulally almost $21 million in salary, bonus, stock, options and other compensation. Plus, he received an additional stock award worth $11.7 million last year.
The company revealed last year that it would give Mulally another bonus after he leaves the company in reward for leading the turnaround. The Dearborn, Michigan-based automaker didn’t disclose the amount.
Ford shuffled its leadership team in late 2012 to prepare for Mulally’s eventual departure. Ford elevated its Americas chief Mark Fields to chief operating officer, positioning him as front-runner to take over as CEO when Mulally retires.
Separately, Chrysler Group LLC revealed in a filing with the SEC that it paid CEO Sergio Marchionne $307,989 in 2013, consisting of $200,000 in stock awards for serving on the automaker’s board, and $107,989 for housing, security, expatriate allowances and tax preparation.
Marchionne, who is also CEO of Fiat SpA, doesn’t take a salary as Chrysler chief. Fiat’s 2013 executive compensation will be filed next week, according to Shawn Morgan, a Chrysler spokeswoman said.