Despite Ford's mostly successful efforts to yank its product line along by the earlobes, it still needs to find cost savings. To that end, the advertising arms of the Ford and Lincoln-Mercury divisions have been combined, bucking the traditional Balkanization in the marketing wing.
Ford traditionally maintained separate sales and marketing groups, though a single person did serve as brand overlord for all three. Now, the marketing and sales efforts will be by product type, rather than brand, so the Edge team will also shill the MKX, for example. To execute this change, a game of musical chairs has been going on, with Brett Wheatley moving from general manager for Lincoln-Mercury to the customer incentives group, Lincoln brand manager Tom Grill will be joining the global marketing group, while global media manager for Ford, Mark Kaline, has separated from the Blue Oval. This deck shuffling may wind up with a good marketing hand, or it could be a whole bunch of worthless cards.
Ford revealed today that its CEO Alan Mullaly was compensated with a package worth $21.7 million last year. His base pay was $2 million and he received incentive bonuses totaling $7 million. The rest of his money pile comes from stock options and the like. All told, Ford's top five highest paid execs accounted for some $60 million of the Blue Oval's total bill in 2007. Mulally actually made $28.2 million in 2006, but $11 million of that was what it cost Ford to buy out his contract with Boeing.
$60 million is a lot of money to pay five people in one year, which strikes at the heart of an age old question in modern American business: how much should executives get paid? If they're doing their job and the company is profitable, no one seems to quibble over a million here and a million there, but instead credits the CEO for his or her expert leadership. When a company is losing money like Ford, however, those big bucks suddenly seem like funds that could have been used to develop new products, pay lower-tiered workers better or pad the company's cash reserves just in case.
Bill Ford Jr., Ford's last CEO who has turned down a salary until Ford turns a profit, hired Mulally to do what he couldn't: make Ford profitable again. But hiring a guy like Mulally costs money, which is what we're seeing here. It is too early to determine if Mulally is earning his wage, so the impatient see his compensation package as completely unwarranted. We're willing to wait a few years, and if Ford is back in the black by then, we know the cost of doing business with Mulally was worth it for the guys and gals from Dearborn.
