Over the last year I have repeatedly criticized the executives of financial institutions who have very nearly wrecked their companies (completely wrecked, in some cases), received taxpayer-funded bailouts, and gone on to receive generous bonuses. Their cry of needing to retain "good employees" has rung hollow every time it was used - and was confirmed as hollow in a recent study.
But the other day I read of one corporate chieftain who stands out from the pack: Alan Mulally, CEO of the Ford Motor Company. Mr. Mulally joined Ford from Boeing in 2006, when Ford was struggling with huge losses and eroding market share. One of Mr. Mulally's first actions was to borrow $18 billion by mortgaging all of its assets - literally betting the company - to fund a turnaround. And since that time? GM and Chrysler, of course, went bankrupt despite billions in bailout money. Toyota, apparently distracted by its lunge for market share, has tarnished its reputation for quality. And Ford? Standing tall among automakers, Ford has been selling more cars and making more money. How did they do it? Mostly it looks like straight-up good business practice: study your customers and build cars that they want. No government handouts, thank you. And Ford's shareholders are enjoying a stock price higher than at any time since 2005 - an important part of any CEO's job.
So rare among corporate executives lately, Mr. Mulally's bonus is well deserved.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).