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Originally Posted by Rev
...Capitalism allows the judgement of energy companies to make a profit from good prognostications or losses from poor predictions. Why not? I don't think the world can be hoodwinked for very long on the true value of energy fuels...
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For me, the important thing to be concerned about is that capitalism absolutely depends on a thriving free market economy with aggressive competition. When you eliminate the competition, capitalism can quickly go very bad.
Anyway, back the subject, which is NOT George W Bush, Capitalism or Executive Compensation directly.
Interesting article regarding a new Ford Motor Company executive bonus calculation. I feel the revised bonus adjustment due to repairs is a step in the right direction. It should help Ford execs focus on the quality issue, and it's a nearly direct admission that the cars Ford is producing are not as good as they should be.
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Next time you have to dip into your pocket or purse because your new Ford Motor Co. vehicle has a problem, you can smile.
When you spend money to repair that car, it will cost Ford executives.
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New FoMoCo Executive Bonus Program
That being said, an article from last year focusing on shortfalls in pension funding and executive pay indicates that Ford is one of the worst (this is a subjective assumption) based on the $12.3 Billion in unfunded pension money.
Article On CEO/Executive Pay vs Pension Shortfalls
Despite Bill Ford refusing salary, he apparently made more money than his counterpart CEO at GM due to the overall compensation package. Keep in mind, the executive pay numbers are for the top 5 executives in the company only. If those were the compensation numbers for the entire VP or higher employee group, it would be dirt cheap. Even so, when placed next to the deficiency in the pension, the $105M is only 0.9% of the deficiency.
According to Ford Motor Company, Bill Ford donated all of his compensation (including stock options/bonuses) to charity this past year. Hopefully it made for a good write off. When your company is in the red, it might be a good time to think about spending money more wisely, no matter how noble the appearance is.