Notes from a Collapsing Empire (3)

By Mike Marsh

 

Alan Mullaly. Is this a name you recognize? He is the CEO of Ford Motors, arguably the most troubled of the US car manufacturers. Mr. Mullaly took over the reins of Ford in late 2006, when the former CEO and prodigal son Bill Ford decided the water was a little hot for his liking and he wasn't having fun anymore. Since then. Mr. Mullaly has treated his shareholders to losses of roughly $15 billion. Not bad for a newcomer.

 

Now when a company is this troubled, and a leader has failed this badly, it stands to reason that he gets punished in his wallet, right? Well, fortunately for Mr. Mullaly and his family, the answer is no. He received $28 million for his first 4 months of work, which included announcing a record $12.7 billion in losses. Since then he has “earned”- if this is the right word- an additional $22 million for presiding over the destruction of a once-great American company. That’s over $50 million in roughly 2 years. Like I said, not bad for a newcomer.

 

Mr. Mullaly is, of course not alone in receiving out-sized paychecks for pint-sized results. He joins a veritable parade of the Great and the Good hauling down multi-multi-million dollar packages for running around in their private jets to Aspen in the winter and Gstaad in the fall. What makes Mr. Mullaly noteworthy is the fact that since Ford is practically in bankruptcy, he would like you and me to bail him out of his mess to the tune of roughly $10 billion. This is on top of the $10 billion, give-or-take, we already agreed to give him to retool his business. When Mr. Mullaly appeared hat-in-hand before Congress 2 weeks ago demanding his pittance, he was asked if he would be willing to forego his rather handsome salary as one of the conditions for receiving more taxpayer loot. Seems like a reasonable question to me. If Joe-taxpayer is going to be asked to kick-in his weekly bowling money to save Ford, maybe the CEO of the company might want to consider kicking-in a little, too. Or maybe not. It seems Mr. Mullaly was deeply offended by the thought that he was not worth every one of the shekels he is paid, demurring, “I think I’m okay where I am.”

 

“I think I’m ok where I am.” Well, I think Mr. Mullaly is also pretty ok where he is, and I heartily wish he would stay there and keep the hell away from the tax money that I have paid to Washington.

 

Mr. Mullaly is not alone in his high regard for his personal financial well-being. His fellow auto CEOs are putting up a solid front on the salary question. GM’s Rick Wagoner also brushed back a request to trim his salary to almost nothing, saying "I don't have a position on that today." His 2007 compensation package was $15.7 million. GM reported a loss of $38.7 billion last year. One wonders what the credulous directors and shareholders would have paid Rick if, God forbid, he managed to make a dollar or two. Is there enough money in the world?

 

Do the auto makers deserve a government handout? Probably, in order to save a critical industry. But there had better be strings attached. Make that ropes, not strings. And one is that these failed “leaders” have to go, and the guys that replace them ought to get paid for results, not for simply occupying a seat. If we are going to give these companies money, we should use it to buy stock so we will be in charge. This means if and when they turn around, we share in the reward, not just Alan “I’m ok where I am” Mullaly, Rick “No position on that” Wagner, and the rest of the corporate grifters.