Mulally, Other Ford Executives Take Pay Cut in 2008

Compensation awarded Ford Motor Co.’s Alan Mulally in 2008 totaled $2 million in salary, 30% less than he received the previous year, according to the auto maker’s 2009 proxy statement released today.

The auto maker’s president and CEO did not collect any bonus money, says the statement filed with the Securities and Exchange Commission.

Other top Ford executives saw their compensation reduced in an attempt to “decrease costs and conserve cash in response to the difficult global economic climate,” the auto maker says.

Lewis Booth, executive vice president and chief financial officer earned $1,075,000 in 2008, marking a 66% cash compensation reduction compared with like-2007.

Mark Fields, executive vice president and president-The America, earned $1.3 million in salary. He received no bonus.

Fields’ cash compensation declined 68%, while his total compensation, including the amount the auto maker expensed in 2008 for the value of long-term stock options and other stock-based awards, dropped 42%.

Marketing and Communications Group Vice President Jim Farley earned $700,000 in salary, plus a $660,000 bonus related to a 2007 employment agreement that led to his defection to Ford from rival Toyota Motor Corp.

Farley’s total compensation in 2008, including the amount Ford expensed in 2008 for the value of long-term stock options and other stock-based awards, was $2,648,398.

David Leitch, group vice president and general counsel, earned $850,000 in salary, in addition to a $150,000 bonus related to a 2006 retention award. Leitch’s total compensation, including the amount Ford expensed last year for the value of long-term stock options and other stock-based awards was $2,620,783.

Other cost-reduction steps cited in the proxy include the elimination of annual incentive compensation program bonuses for 2008 and 2009 and cash compensation for Ford’s board members this year.

“Ford is acutely aware that current economic conditions have had a significant adverse impact on our shareholders, customers, dealers, employees and other stakeholders,” the auto maker says in its proxy. “We do not view these actions as merely symbolic, but as a necessary step in the restructuring of our business in which all our stakeholders have been asked to participate.”

Ford describes the statement as preliminary because it requires shareholder approval to issue stock as payment for 50% of its cash obligation to the Voluntary Employee Beneficiary Association (VEBA). Its use of stock in this manner already has been approved by the United Auto Workers union, whose members benefit from the VEBA.