Bad times? Not for CEO paychecks

What downturn?

For CEOs in the auto industry, hard times didn't necessarily translate to low pay in 2007. That was especially true for CEOs of parts suppliers.

Take Alexander Cutler of Eaton Corp., a maker of truck and automotive parts. He was the industry's top-earning CEO, according to Automotive News' annual executive compensation survey of about 35 publicly traded automakers, parts suppliers and dealership groups in North America. Equilar Inc. compiled the data.

Cutler's total compensation rose from $14.3 million in 2006 to $24.5 million in 2007. Nearly half of his compensation last year came from exercised stock options. He also pocketed $9.5 million in bonus and incentive pay.

Exercised stock options and awards were behind the hefty compensation in 2007 for Cutler — and for several other supplier CEOs.

The CEOs who ranked Nos. 2, 3 and 4 in 2007 total compensation also saw big stock-related increases: John Plant at TRW Automotive Holdings Corp., Robert Keegan at Goodyear Tire & Rubber Co. and Christopher Kearney at SPX Corp.

But the stock market gives, and it takes away. John Barth of Johnson Controls Inc., No. 9, saw a drop of almost $17 million in total compensation. In 2006, he was the one celebrating a big stock-related gain. In 2007, he recorded none.

Roger Penske, No. 33, of Penske Automotive Group Inc. also took a hit. His compensation dropped from nearly $16 million in 2006 to $1.1 million last year. His stock award and option gains totaled more than $15 million in 2006 but just over $349,000 last year.

The median compensation for CEOs in the survey was $4.1 million, slightly higher than the $4.0 million median 2006 compensation.

In 2007, nine automotive industry CEOs received at least $10 million. That's up from eight in 2006.

All but one of the nine worked for suppliers. The lone automaker CEO to make the list was Ford Motor Co.'s Alan Mulally.

Fortunate five
Here are the 5 top-earning automotive CEOs in 2007.
1. Alexander Cutler, Eaton: $24.5 million
2. John Plant, TRW: $22.7 million
3. Robert Keegan, Goodyear: $18.8 million
4. Christopher Kearney, SPX: $14.9 million
5. Theodore Solso, Cummins: $13.2 million
Source: Equilar Inc.

It's good to be Alan

In terms of a simple paycheck, Mulally, No. 7, was the big winner in 2007. He was the only CEO in the survey to take home $2.0 million in base salary last year. Mulally's total compensation was $12.0 million, more than half of which came from bonuses and incentive pay.

Mulally also topped all CEOs in the "other" compensation category, at $1.4 million. That figure included $109,543 in relocation costs and temporary housing and $752,203 for personal use of company aircraft. Ford allows the executive, along with family and guests, to use aircraft "in order to ease the burden of Mr. Mulally moving to Southeast Michigan and away from his family in Seattle," according to Ford's proxy statement. He joined Ford in September 2006.

The king of the "other" pay category isn't Mulally, however. He's not even a CEO. It's Magna International Chairman Frank Stronach. Most of his $65.7 million in compensation came from affiliate companies, and that amount is listed as "other."

Magna's co-CEO, Siegfried Wolf, received the lowest base salary in the survey, just $100,000. But additional forms of compensation made Wolf No. 6 on the CEO list, with total compensation of $12.7 million.

Magna's other co-CEO, Don Walker, made $10,500 more in base salary than Wolf. Walker's total compensation was $11.3 million, enough to put him at No. 8. Magna traditionally has offered low salaries and big incentives to top executives.

Dealership groups lag

Among the executives with more modest pay were the heads of the publicly traded automotive retailers. Their stocks have been battered.

AutoNation Inc.'s Mike Jackson, No. 20, saw his pay drop because of a dramatically lower bonus payout and lower stock gains. Lithia Motors' Sid DeBoer, No. 34, was one of just two CEOs on the list whose total compensation was below $1 million in 2007, thanks to his board's decision to cut bonuses.

The other CEO below $1 million was Theodore Zampetis, No. 35, of tiny Shiloh Industries Inc. The Ohio maker of blanks, stampings and assemblies is the smallest public company on the list, with 2007 revenues of $590 million.

The total compensation of Richard E. Dauch, No. 10, at $9.2 million can hardly be considered small. But the CEO of American Axle & Manufacturing Holdings Inc. may get more. A week after American Axle workers went on strike to protest the company's demands for big wage cuts, American Axle's board postponed acting on proposed executive bonuses and other incentives for Dauch and other executives for 2007.

You can reach Leslie J. Allen at lallen@crain.com

0

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters