DEARBORN, Mich. - Ford Motor Co., which turned its biggest profit in more than a decade last year, has rewarded CEO Alan Mulally with stock worth $56.5 million before taxes.
The man who hired Mulally, Executive Chairman Bill Ford Jr., also got stock worth $42.4 million.
The Dearborn, Michigan, company (NYSE:F) disclosed the stock in filings Monday with the U.S. Securities and Exchange Commission, and the shares were granted to the men on Thursday, when they closed at $14.76. Several other top executives also received stock awards.
Ford was in financial peril late in 2006 when Bill Ford removed himself as CEO and hired Mulally away from aviation giant Boeing Co. Under Mulally, the company mortgaged its assets to borrow more than $23 billion, allowing it to weather the recession. It avoided filing for bankruptcy or following General Motors Co. and Chrysler Group LLC in taking government aid.
Mulally is widely credited with turning the company around, raising the quality of its cars and trucks and shifting its model lineup from trucks and sport utility vehicles to smaller vehicles such as crossovers.
In 2006, the year Mulally was hired, Ford lost $12.6 billion. But last year the company made $6.6 billion, its best year since 1999, and sales were up almost 20 per cent.
Ford spokesman John Stoll said the stock awards were part of compensation packages that were disclosed in filings from previous years. "We align executive compensation to company performance and long-term shareholder value,'' Stoll said.
Ford's stock in January closed at a five-year high of $18.79 after falling to as low as $1.43 in 2008, when the future of Ford and its Detroit rivals was uncertain.
But the shares have since fallen to around $14 after Ford announced fourth-quarter earnings that fell short of Wall Street expectations and gas prices started to rise due to turmoil in the Middle East.
Mulally received 3.8 million shares worth $14.76 each on Thursday, according to the filing. But the company withheld 1.56 million shares worth $23 million to pay taxes on the stock award, giving Mulally a net award worth about $33.4 million.
Bill Ford got 2.87 million shares worth $14.76 each, and the company withheld 1.17 million shares to pay $17.3 million in taxes, giving him a net stock award valued at $25 million.
Mulally also will get another 543,734 shares as of March 3, 2013, and he has options to buy another 884,433 shares over the next 10 years at $14.76 each. But those options now are worthless because he can buy the stock for less on the open market. Ford stock closed Monday at $14.01.
Bill Ford also will get another 253,742 shares in March of 2013, and he has options to buy another 412,735 shares at $14.76 over the next 10 years. Like Mulally's options, those also are now worthless because the option price is higher than Ford's trading price.
Ford shares rose 31 cents, or 2.2 per cent, to $14.32 in morning trading Tuesday.
