Lee Iacocca, the father of the Ford Mustang, passed away on July 2, 2019 at the age of 94. The auto industry icon who famously saved Chrysler from bankruptcy was the only contemporary executive to ever lead two of the Big Three auto giants in the U.S., and one of the few CEOs to decline a hefty paycheck for his work. Nonetheless, Lee Iacocca had an estimated net worth of $100.0 million at the time of his death. His work earned him a fortune, but it is his legacy of transforming the auto industry that will forever be remembered.
Lee Iacocca’s Family Owns Yocco’s Hot Dogs
Born Lido Anthony “Lee” Iacocca on October 15, 1924 in Allentown, Pennsylvania, he was the son of immigrants who came to the U.S. from San Marco, Italy and settled in Pennsylvania’s steel production belt. There’s an urban legend surrounding his name “Lido,” which is a district in Venice. But Iacocca once clarified the stories weren’t true.
The Iacocca family owned and operated Yocco’s Hot Dogs, a famous chain of restaurants in Pennsylvania started by Lee’s uncle.
Lee didn’t go into the family business, instead opting to study industrial engineering at Lehigh University. He went on to win the Wallace Memorial Fellowship and chose to study politics and plastics at Princeton.
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Iacocca Started His Career at Ford
The Princeton graduate joined the Ford Motor Company in 1946, first as an engineer before switching to sales and marketing. It turned out he was cut out for sales all along, as he helmed of some of the biggest sales campaigns for Ford at the time.
His most famous sales brainchild was the “56 for ’56” national campaign on the 1956 car models. The success of the campaign helped him move up the ranks and he was appointed VP of various divisions in the ‘60s.
While an executive, Iacocca oversaw the development of Ford’s most iconic cars, the Mustang and the Pinto, among many others.
He eventually became the president of Ford, but after clashing with Henry Ford II, he was fired in 1978. Iacocca had been instrumental in the company’s $2.0 billion profit that year.
Iacocca Saved Chrysler from Bankruptcy
After being fired from his longtime professional home, Iacocca wasn’t unemployed for long. Chrysler had been courting the profit-making executive when they were on the verge of bankruptcy.
As soon as Iacocca was on the market, Chrysler swooped in and brought him on board. His first order of business was to rebuild the sinking ship that was bleeding millions in cash in North America. And he also sparked an exodus of Ford execs to Chrysler.
Iacocca had promoted several car ideas at Ford that Henry Ford II had shot down. He hired Hal Sperlich, who had been fired from Ford not long before Iacocca, and the two would bring the Ford-rejected “Mini-Max” design to Chrysler.
Chrysler had suffered losses from large-scale recalls of certain models. But under Iacocca’s leadership, sales had improved.
Yet Iacocca knew that it was not enough to make up for the losses. To save the company, he approached Congress to bail them out.
He got a loan guarantee under certain stipulations. That included abandoning a few projects and making way for new models that would become Chrysler’s bestsellers for decades.
With the success of the K-Car line and the minivan, Chrysler was able to pay off the government-backed loans sooner than expected.
Chrysler’s turnaround was credited to Iacocca. And it was why he was the face of the company for its major comeback ad campaign. He’s been iconicized for his catchphrase during that time: “If you can find a better car, buy it.”
Iacocca Famously Drew a $1.00 Salary
Iacocca retired in 1992 as the CEO and chairman of Chrysler. But he would make headlines during an unsuccessful hostile takeover of the company in 1995 and Chrysler’s 2009 bankruptcy.
During his regime at Chrysler, Iacocca pioneered the $1.00 CEO model that several of today’s CEOs follow. In 1978, the year he joined Chrysler, he voluntarily took a pay cut, earning a base salary of $1.00.
The one-dollar salary concept originated in the early-to-mid 1900s when multiple executives chose to take a pay cut during war times. Later, many execs would draw a $1.00 paycheck when the companies they worked for were going through a financial crisis.
The corner office holders are effectually forgoing direct compensation for work. However, legally, salaries have to be above zero to distinguish between an employee and a volunteer.
Iacocca’s token salary was one of the many cost-saving measures he implemented in order to receive the federal loan. It was a symbolic gesture of confidence where CEO salaries were tied to performance.
The retelling of the background on his salary in William Novak’s Iacocca: An Autobiography encouraged other top executives to sacrifice lucrative paydays for the success of their companies. The late Steve Jobs, Larry Page, Larry Ellison, Mitt Romney, Arnold Schwarzenegger, and even President Trump are famous one-dollar salary personalities.
CEOs aren’t often hurting from this massive concession, though. Perks like stock options typically more than make up for the minuscule salaries.
And it’s not like Iacocca wasn’t compensated, either. In 1986, his total compensation as Chrysler chief was estimated at $11.499 million, making him the best paid CEO in the U.S. at the time.
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Here’s how he compared to other major automotive CEOs.
|William Clay Ford, Jr.
|Mary T. Barra
Lee Iacocca Owned Homes in Michigan, Florida, and California
The Pennsylvania native spent his career in the auto-hub of Michigan. He used to live in a Georgian-style home in Grosse Pointe Farms that was previously owned by his former boss, Henry Ford II. The price of the home was valued between $800,000 and $1.5 million.
He had married and divorced thrice and was father to two daughters, Lia and Kathryn. His then-wife No. 3, Darrien, was a California girl and after he retired, insisted they return to her home state.
So, Lee and Darrien reportedly purchased a home on L.A.’s Westside worth $4.25 million in 1993, soon after Lee retired from Chrysler. He divorced for a third time not long after relocating to California.
Lee also owned houses in Indian Wells, Aspen, Detroit, and Tuscany, Italy. His Italian residence was attached to a vineyard with 5,000 olive trees. The olive oil produced at his vineyard was sold in the U.S.
He also had a oceanfront penthouse in Boca Raton, Florida worth $995,000 in 1990, the same year he listed it for sale. His second wife, Peggy Johnson, lived in Miami then.
Lee reportedly owned a penthouse in West Palm Beach’s Trump Plaza, worth $1.1 million in 1987. But reports say he never lived there. He sold the penthouse back when the still-real estate tycoon Donald Trump’s fortunes were on the decline.
But he spent the rest of his sunset years in the Bel Air mansion he bought more than two decades ago. He passed away at his home of complications from Parkinson’s disease, his daughter Lia said.
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