Ford Willing To Cut Executive Salaries to $1 - Updated

I just read this article which talks about how the executives at Ford are willing to cut their salaries to $1 if they receive money from the federal government. Wow, that's nice of them.

Notably absent in that entire article is a mention of executive bonuses. Bonuses and dividends are typically taxed as investments instead of income, and usually result in a smaller tax burden. In Canada, the tax rate on dividends is roughly half of what it is in regular income, so that's the preferred method of making money.

So if they reduce their salaries to $1, I gotta ask, what are they planning to do with their bonuses? Unless it's explicity stated what they will be, I really doubt the sincerity of this gesture, and would fully expect those executives to make up the difference with their normal bonus plans.

Updated at 4:15pm on Dec 2, 2008 - See, I told you so. Here is a list of the executive packages from last year:

Mulally had a base salary of $2 million and total compensation of $21.7 million last year, according to the company's filings. Wagoner received base pay of $1.6 million and total compensation of $14.4 million. Closely-held Chrysler does not disclose executive pay.

So by changing their salaries to $1, they are in essence only giving themselves about a 10% reduction in compensation. Wow, some sacrifice guys.