Ford Motor Company’s CEO deserves to be compensated well. As the only Big Three automaker that didn’t get a bailout and fall into bankruptcy, the company weathered the economic downturn through cutting costs, having a well-defined strategy, and by focusing on improving existing products. Mulally has been an integral part of the Blue Oval’s ongoing turnaround, and as a result his efforts are reflected in his salary.
In 2009, Mulally reportedly earned $17.9 million in cash and bonuses, which is more than the CEOs of Toyota, Nissan, and Honda combined. This officially makes him the world’s top-paid auto chief. Taking in $10 million in 2009, Nissan’s CEO Carols Ghosn was the highest paid among Japanese companies. Honda’s Takanobu Ito earned $1.3 million, followed by Toyota’s Akio Toyoda who earned $1.1 million.
As a result of the government bailout and the limitations placed on their companies, Mulally’s counterparts at Chrysler and General Motors are not enjoying the same lofty earnings.
Although auto sales and the economy are still gaining traction, some experts like Katsuyuki Kubo, an associate professor of economics at Waseda University in Tokyo, believe that recent cuts to executive compensation might prove to be a weakness for Japanese companies.
“Because of globalization, competition is intensifying, and there is a greater importance placed on strong and decisive management,” said Kubo. “Without the pay incentive, Japan could lose out on competitiveness.”
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{ 2 comments… read them below or add one }
It is an obscene amount of money for one person, however Ford has been profitable and didn’t accept bailout funds. According to a 2009 study by the Global Economy Project at the Institute for Policy Studies, the CEOs of financial firms made an average of $13.8 million in 2008. These are stats pertaining to some of the companies at least partially responsible for the financial meltdown.
Ford deserves it. They have historically treated their workers better than any other company.
http://www.ford.com/about-ford/heritage/milestones/5dollaraday/677-5-dollar-a-day
http://www.upi.com/Business_News/2010/03/14/Study-Employee-confidence-up-at-Ford/UPI-64471268592246/
Henry Ford was a progressive.
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