Contrast the reaction to rewards paid to UK bank executives – £28m in share bonuses and long-term incentives to nine Royal Bank of Scotland officers, for instance – with the response to stock awards worth almost $100m for Ford Motor’s Alan Mulally and Bill Ford.
Both pay-outs are being made to executives who took on big turnround jobs – and had no responsibility for what went before. Both contain deferred elements. Both, let’s face it, are huge in absolute terms, however you cut them. But whereas many people seem to believe Mulally, Ford’s CEO, deserves his pay-out, his RBS counterpart Stephen Hester and colleagues have attracted mainly brickbats for their rewards.
Look at the reader responses to this report on Autoblog about the Ford rewards – Mulally gets a slap on the back from many readers, both for the scale of the task achieved, and even for the step-change in the quality of Ford cars. (They seem more equivocal about the prize claimed by Bill Ford).
Meanwhile, the stream of invective about Hester’s remuneration at the UK’s Telegraph (which, in its business comment, remains staunchly pro-bonus) is representative of the deep and abiding anger at any and all bank bonuses.
It’s worth remembering, of course, that there were immense doubts about Mulally’s ability to revive Ford. The FT’s Bernard Simon wrote after it was announced in 2006 that the “doubters appear in a majority”.
But Mulally has pulled it off. Ford has also blunted any adverse union reaction to the executive pay-outs by awarding $5,000 to each of its 40,600 US hourly workers – the impact of which is well-documented by the Wall Street Journal.
The real reason for the differing reaction to the two sets of executive rewards lies elsewhere, however. Ford was famously the only one of Detroit’s big three carmakers to avoid a US government bail-out. RBS was the biggest beneficiary of the British government’s rescue – and that still rankles.