Annual Meeting: May 14, 2020

The President and CEO of Ford, James P. Hackett, received $ 17,355,505 in compensation in 2019. His compensation was comprised of $1,800,000 in salary (the same as last year), $13,188,269 in stock awards, $1,749,600 non-equity incentive compensation, and $617,637 in all other compensation. All other compensation includes lavish perquisites like the use of private aircraft, security, financial planning, and tax preparation services

Hackett was in the news last year for telling his employees that he, “would not accept last year’s ‘mediocre’ results and said the company was aiming to nearly double its annual operating profit.” Ford didn’t quite make this target. Ford’s 2019 adjusted free cash flow was $2.8 billion, flat compared to 2018, and its revenue was $155.9 billion, down 3%. An article in the Wall Street Journal on this issue noted, “Mr. Hackett’s strategy to revitalize Ford—which includes a multiyear, multibillion-dollar restructuring—hasn’t returned the company to earnings growth or restored profitability overseas, where Ford is closing plants and shedding thousands of workers to cut costs. Ford’s operating profit has fallen in both full years of his tenure.” Of course, Hackett’s compensation has come out unscathed during the same period. Coronavirus has changed a lot of things, including this pattern. A Wall Street Journal article reported that “The top 300 executives at Ford are deferring 20% to 50% of their salaries for at least five months starting May 1. They will get paid only after the auto maker, which has shut most of its manufacturing world-wide, has repaid about $7 billion of the extra debt it has taken on to manage through the crisis, according to the company. This structure ‘functions as an incentive,’ a Ford spokesman said.”

Shareholders, however, may vote against the overall package because of another action the company took this spring. In February, the company issued an 8k announcing that Joseph Hinrichs, President of Automotive, had chosen to retire. In addition to the generous retirement package to which he was entitled, the company also awarded him “payments equal to two years of his annual salary as of February 1, 2020, paid in equal monthly installments beginning in March 2020.” Severance packages are not designed for those who voluntarily leave their positions.

Ford workers make a median pay of $ 110,706 per employee; the pay ratio of CEO to employee is 157:1.