In a memo to employees, Ford Executive Chairman, William Clay Ford Jr. and Chief Executive Officer Alan R. Mulally (shown) announced they would be taking a voluntary 30-percent pay cut for two years, according to reports by The New York Times and Wall Street Journal. In addition, the board of directors will not receive cash compensation this year, and performance bonuses for salaried employees have been eliminated for 2009, according to those publications.

These cut backs come on the heels of discussions with the United Auto Workers (UAW) to reduce labor costs. Automotive News announced that the company and the UAW agreed on changes to the union's health care trust for retirees.

Bill Ford has been working for his namesake company since 2005 without an annual salary, according to Automotive News. Upon the board’s insistence, pay resumed for 2008, though Bill deferred it until the company returned to profitability.

Consequently, this move will hurt Mulally more in the short run, though I suspect he will be just fine. After all, Forbes lists his total annual compensation at $12 million, including a base $2 million salary and a $7 million bonus.

Plus, he reportedly earned $28 million in his first four months on the job at Ford in 2006, according to CNN Money. The report claims the prior eight months earned him $7.4 million from Boeing. Not bad for a year’s pay.

After facing Congress, Chrysler CEO Robert Nardelli and GM Chief Executive G. Richard Wagoner both announced they would work for just $1 a year. While Mulally’s sacrifices don’t seem to be as great, especially compared with the plight of many Americans, he has managed to keep Ford Motor Company from requiring federal assistance. And clearly, that is worth something. 

—Jeff Bartlett