DETROIT – Ford Motor Co Chief Executive Alan Mulally's total compensation fell 37 percent to $13.6 million last year and he received no bonus — but he won't have to fly commercial.
Mulally, who has agreed to take a 30 percent cut in his $2 million salary this year and next year, remains required to fly on private aircraft for personal and business travel due to security concerns, according to a preliminary proxy filed with the U.S. Securities and Exchange Commission.
Executive perks have become a particularly sensitive issue amid U.S. government bailouts aimed at reducing the impact of the recession.
The top executives from Ford, General Motors Corp and Chrysler LLC were widely criticized for traveling by corporate jet to congressional hearings late last year when the companies were seeking government aid.
Ford, which did not seek emergency loans but is seeking to sell its corporate jets, will continue to pay the charter costs for Mulally's use of private aircraft.
The automaker valued Mulally's compensation for personal use of company and private aircraft in 2008 at $344,109, less than half the $752,203 the prior year.
The automaker also said Mulally's family will be allowed to accompany him on trips when he flies on private aircraft and the company will pay the cost of coach-class commercial flights for his family when the travel is at his request.
Mulally, who became CEO in 2006, has been granted the right to remain in temporary housing near Ford's headquarters indefinitely and would receive relocation assistance if he chooses to move his household, the proxy statement said.
Ford, which posted a company record $14.7 billion loss in 2008, has been restructuring its operations over the past four years including job cuts, plant closings and the sale of several brands from its former luxury division.
The automaker has said it has enough liquidity to make it through the deepest downturn in U.S. sales in 27 years without seeking emergency U.S. government loans, unless conditions worsen dramatically beyond current levels.
That position sets Ford apart from U.S. rivals GM and Chrysler, about 80 percent controlled by Cerberus Capital Management. GM and Chrysler have received $17.4 billion of emergency loans and have sought about $22 billion more.
In addition to Mulally's salary cut for the next two years, Ford has eliminated performance bonuses for global salaried employees and senior executives for 2009 in a "shared sacrifice" with unionized hourly workers.
The unionized workers agreed to mid-contract concessions on overtime, holidays and other areas, changes that Ford has said push its hourly labor costs closer to parity with the U.S. operations of Japanese rivals.
The automaker's annual meeting is scheduled for May 14 in Delaware. The agenda includes a request for shareholders to confirm the funding arrangement Ford has reached with the United Auto Workers union for a retiree healthcare trust.
The agreement allows Ford to fund up to half of the $13.1 billion of obligations to the healthcare trust using Ford stock over the next decade, saving cash for its turnaround plan.
Ford opposes several shareholder rights resolutions, including an annual advisory poll seeking the elimination of special voting rights that confer a 40 percent voting stake to the Ford family, which holds 3 percent of the shares overall.