DETROIT -- New Ford Motor Co. CEO Alan Mulally stands to earn a pay package of nearly $35 million this year, the automaker said today.
Ford will pay Mulally a base salary of $2 million per year, according to a filing with the Securities and Exchange Commission. His pro-rated salary for this year will be $666,667.
Ford will also pay Mulally $18.5 million in signing bonuses and other compensation by Friday, Sept. 15. Of that amount, $11 million will compensate Mulally for lost performance and stock option awards at his former employer, Boeing Co. The other $7.5 million is a signing bonus.
In addition, Mulally received an award of 600,000 restricted stock units that can be cashed according to a three-year schedule, plus a grant of 4 million stock options.
A Ford spokeswoman said the stock options are valued at $10.5 million. The restricted stock units are valued at $5 million. With that, Mulallys 2006 compensation package could add up to almost $35 million, Ford estimates.
With additional performance awards scheduled next year, Mulallys 2007 compensation package could add up to $16.5 million, Ford estimates. That includes the $2 million base salary and a targeted bonus of 175 percent of that salary, or $3.5 million.
In addition, Ford agreed to grant Mulally performance-based restricted stock units and stock options in March 2007. They will have minimum values of $6 million and $5 million, respectively, on the grant date.
In a statement, Ford said, "Alan Mulally's executive compensation package was determined by the board's compensation committee based on the competitive environment for world-class talent, the demands of the position, and the need to recruit Mr. Mulally from a long, established career at Boeing.
The majority of Mr. Mulallys compensation is performance based, tying his future performance with that of the company. The committee believes the package is fair and reasonable given his qualifications and the magnitude of the position, the statement said.
At Boeing, Mulally was among the top paid executives in 2005 with a package of about $9.96 million that included a $7.58 million long-term incentive payout in addition to his $825,000 salary and a $736,300 annual bonus.
Reuters contributed to this report
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