It might just be time for a CEO salary cap.
I like Ford. I like Mustangs. I like that in the dark days of the “Great Recession” Ford alone eschewed federal bailout money and survived — indeed thrived — on its own war chest.
But paying nearly $200 million in stock benefits to its savvy, and needless to say, talented CEO, Alan Mulally? Are the days of a billion-dollar CEO just around the corner? Something ain’t right. For $200 million Ford could buy a new plant, fund R&D into solar automobiles, bring back some of the tens of thousands jobs lost over the last decade. And call me crazy, but why not issue a dividend to its millions of shareholders. Sure Mr. Mulally is doing a nice job, but it’s not as if he donned a Lions helmet and won the Superbowl. (If he did that the people of Detroit — as beleaguered as they are — would probably pass the hat around.)
I can hear Ford’s defense. This is deferred money. It arises from an executive compensation policy that rewards profit and an increase in the stock price. "It aligns the interests of management with shareholders." But something is wrong when the CEO’s income is 1,000 times (or likely much more) the guy on the shop floor’s — he who must house, feed, clothe and educate a family of four or more.
Why not a salary cap? We have them in professional sports. Would Mr. Mulally work any less if his salary was topped out at say $100 million per year?