Ford Resists Pressure to Cut CEO Compensation By MATTHEW DOLAN
Ford Motor Co. is so far resisting pressure to cut the salary of its chief executive despite increasing scrutiny of top management at all three Detroit auto makers seeking emergency help from the federal government.
In a statement Wednesday, Ford said that its board of directors' compensation committee regularly reviews pay packages, but the Dearborn, Mich., company didn't indicate any changes for Chief Executive Alan Mulally are imminent.
Questions about executive pay surfaced again this week as American International Group Inc.'s chief executive agreed to cut his salary to $1 after the insurer received a second installment of a multibillion dollar bailout.
Ford, General Motors Corp. and Chrysler LLC have asked Congress to make $25 billion in loans available to shore up their finances and keep them going through a deep trough in auto sales. Congress has said the companies will have to accept limits on executive compensation as part of any bail-out program.
Mr. Mulally was asked last week by members of Congress whether he'd cut his $2 million salary to $1. Mr. Mulally demurred, saying, "I think I'm ok where I am." His total compensation in 2007 was $21.67 million, according to Securities and Exchange Commission filings. In the same year, Ford posted a loss of $2.72 billion.
Testifying before a House Committee, GM Chief Executive 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 totaled $15.7 million. GM reported a loss of $38.7 billion last year.
Chrysler's Robert Nardelli said he would accept a $1-a-year salary, although he isn't paid a salary now under his current employment agreement, people familiar with the matter said. He will be compensated when or if Chrysler's owner Cerberus Capital Management LP make a profit on its acquisition of the auto maker. Because Chrysler is a private company, it doesn't disclose details about Mr. Nardelli's pay package.
A GM spokesman didn't respond to phone messages and emails seeking comment if Mr. Wagoner is considering cutting his salary.
The three CEOs also come under fire from Congress and the target of late-night comic jokes for flying in private jets to ask for a taxpayer bail-out. Earlier this week GM and Ford said they are giving up some of the corporate jets they've been using.
Ford wouldn't say if Mr. Mulally was reducing use of the company's corporate jets, or if he or his family is using the aircraft to travel over the Thanksgiving holiday, citing safety concerns. Mr. Mulally's contract allows him to use Ford's corporate jets for personal travel. Another top Ford executive who was allowed the same kind of privileges drew a wave of negative media reports and eventually gave up the perk.
Like Mr. Mulally, Mr. Nardelli has used Chrysler's jets to travel to visit his family home in Atlanta. The company said neither he nor his family were using the planes over Thanksgiving and confirmed the company is considering other ways to travel to Washington to make a second pitch to Congress next week.
In a radio interview that aired Tuesday night, Ford Executive Chairman William Ford Jr. addressed the issue head on, saying that Ford is "talking to Alan [Mulally] about it," adding that the company is "sensitive to public opinion."
Criticized by Congress and lampooned by NBC's "Saturday Night Live," the leaders of the nation's largest U.S.-based auto companies have suffered through weeks under a harsh public spotlight in their efforts to secure $25 billion in government loans to help them weather an economic downturn. U.S. sales of new vehicles is expected to crater again in November, putting more pressure on General Motors and Chrysler LLC -- the two auto makers who have indicated that they might run out of operating cash if they do not quickly secure the federal aid.
Despite the pressure, Ford has so far failed to yield on the issue of top executive compensation beyond a companywide cut to white-collar employee bonuses announced earlier this month. It also comes as voices in Congress and the Bush Administration have pressured organized labor to make its own concessions in wages and benefits to help keep the auto makers afloat.
"The Compensation Committee of the Board of Directors is always reviewing our executive compensation plans, including Alan's, to ensure they are competitive, in line with business conditions, and aligned with shareholder interests," Ford said in a prepared statement. "As we announced a few weeks ago, Alan and all of our executives and salaried employees globally, will forego a bonus in 2009 for 2008 performance
—Neal E. Boudette contrivuted to this article.