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Mulally's Pay Shouldn't Be an Issue

Alan Mulally
Stan Honda | AFP | Getty Images
Alan Mulally

When Ford announced the CEO Alan Mulally made nearly $18 Million last year, I was surprised when I got a few e-mails from people suggesting he made too much money.

The basic gist of their complaints: nobody should get that much money in what is undoubtedly the toughest year the auto industry has seen in decades.

At first these suggestions made me chuckle. But after thinking about it, I believe those complaining about Mulally's pay need to get over it. As a friend of mine who runs a company is fond of saying, "When you write the checks, then you can determine how much someone should make. Otherwise, you're in no position to judge." I couldn't agree more.

In Mulally's case, I have no problem with the man's compensation. All CEO's are paid to perform, and in Mulally's case he's performed better than anyone could have imagined when he took the top job 4 years ago. Ford is on the cusp of being back in the black, its picking up market share with the freshest line-up in showrooms and it's a company setting the pace in the industry with the incorporation of technology in the car.

Did Mulally do all that single-handedly? No. But he's done a masterful job of bringing in all the right people and making the right strategic moves.

But beyond that, I'm a big believer that executive pay is determined by the board and what the market will bear. If Ford's board believes Mulally should get stock options and grants he is receiving, so be it.

They're writing the check, and they're the ones to judge his performance.

Ultimately, I think most people will see Mulally's pay as I do.

The man is driving Ford down a path toward profitability. When the first quarter earnings come out next month, it should be another profitable quarter fueled by not only higher sales, but also more profitable sales due to transaction prices well above the competition.

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