Mulally tops the 2011 CEO-pay list
Stock awards account for most of the Ford chief's compensation
Alan Mulally's total compensation in 2011 was more than triple what the Ford CEO made in 2010.
An automaker CEO was the top-earning chief executive among publicly traded North America-based automotive companies in 2011.
That may not sound surprising. But in recent years, automaker CEOs have taken a back seat to supplier and dealership group CEOs. In the past decade, no automaker CEO has been the biggest earner.
Alan Mulally, CEO of Ford Motor Co., took the top spot in an annual survey of executive compensation prepared by Equilar Inc. of Redwood City, Calif.
Mulally earned $68,247,702 in 2011, most of which can be attributed to more than $58 million in stock award gains. Mulally's total compensation in 2011 more than tripled what he made in 2010, when he ranked No. 3. That year, his stock award gains accounted for only about $9.3 million of his approximately $20.8 million total compensation.
Mulally is reaping the benefits of Ford's continuing recovery, Equilar research analyst Aaron Boyd said. Boyd pointed out that much of the stock from which Mulally is making gains was given to him in 2008 and 2009 at a lower value. Much of that equity is beginning to vest now.
Boyd said Mulally gets yearly stock awards from Ford that have been more and more valuable as the company's finances have improved.
Mulally switched places with last year's biggest earner, John Plant, CEO of TRW Automotive Holdings Corp., who is now in Mulally's former No. 3 spot, earning almost $30 million -- about $11 million less than he made in 2010 when he was No. 1.
Bill Ford’s 2011 total compensation beat that of most CEOS.
Cashing in on stock
Boyd said Mulally's stock success represents a wider trend of higher executive pay in the auto industry, as well as other industries across the United States.
"As the market has recovered from the lows of 2009 and stock prices have risen, we're seeing executives begin to cash in on the equities that they were holding," Boyd said. "You're starting to see people finally realize gains from those awards that they were holding, as opposed to back when stock prices were at 10-, 15-, 20-year lows, in which case nobody was selling stock, nobody was exercising options, and so pay was going down."
Among the 35 CEOS ranked in this year's list, only two -- Roger Wood of Dana Corp. and Jose Maria Alapont of Federal-Mogul -- had no compensation from stock awards or options. The rest, particularly the top five, saw a large portion of their compensation coming from stock growth.
"Equity really does drive pay," Boyd said.
Mulally had company at Ford: Bill Ford, the executive chairman, made $42,361,200 in stock award gains, which make up more than 89 percent of his 2011 compensation. Mulally's stock awards make up 86 percent of his 2011 pay. Bill Ford's compensation was higher than all the CEOs except Mulally. The No. 2 CEO, Tim Manganello of BorgWarner, made about $39.3 million in 2011, moving him up from No. 4 on the 2010 list.
Another non-CEO, Frank Stronach, Magna Corp.'s honorary chairman, pulled in hefty compensaton. But most of Stronach's $59,207,120 came from bonus and incentive plan compensation.
Though it was reported, according to proxy statements, that General Motors CEO Dan Akerson made $7.7 million in 2011, Boyd said Equilar's methodology for calculating CEO compensation found that Akerson's compensation did not make the list, which ends with No. 35 Steven Borick, CEO of Superior Industries International, who made about $2.3 million.
Boyd explained that Akerson's perceived $7.7 million compensation was calculated based on the value of his stock awards on the day they are granted, resulting in a hypothetical value of how much he would make from a stock award. Equilar calculates the value of stock based on the day it vests -- when the shares are eligible to be sold, and their value can be realized.
BorgWarner’s Tim Manganello moved up from No. 4 on the list in 2010 to No. 2.
Bonuses are down
Though executives are generally seeing higher pay, they're not necessarily seeing higher income from bonuses and incentive plan compensation. In fact, cash bonuses are down roughly 5 percent for the 35 executives on this list. Boyd said that the decrease in cash bonuses likely means that while those executives may be putting more money in their pockets, they're not meeting their companies' profit targets.
James McElya, CEO of Cooper-Standard Automotive, saw the highest drop in bonuses among executives on the list, taking home 74 percent less in bonuses than he did in 2010.
Roger Penske, CEO of Penske Automotive Group, was the only CEO who did not take home any bonus in 2011.
You can reach Adam Rubenfire at firstname.lastname@example.org.