Annual Meeting: May 14, 2015 Total executive pay at Ford is up sharply from last year. In 2013 the total for the five most highly paid executives was $53.4 million, for 2014 it is $67.9 million, three individuals, the two men who serves as CEOs for part of 2014 and the executive chairman, account for 81% of that total figure: $55.6 million. Here’s a quick overview to what each of them received.
- Mark Fields who had been Chief Operating Officer became CEO on July 1, and his total compensation for the year was $18.6 million. Fields' salary as COO was over $1.5 million, making him (by my count) among the five highest-salaried COOs in the S&P 500. He received a 3% salary increase in April 2014 while still COO and an additional 9.4% salary increase in July when he became CEO. Fields received an option grant with grant date value of $6.2 million.
- The company also has an extremely highly paid Executive Chairman:Bill Ford received $2 million in salary and received stock and option awards, despite the fact that the approximately 20 million shares he currently owns suggests that further equity grants are not necessary. Ford’s total package of $15 million also included an increase in pension value of over $4 million. It is highly unusual for an executive chairman to enjoy such a rich pension.
- Former CEO Alan Mulally, who retired in July, received $22 million in 2014, including an annual incentive of $3.2 million. An additional $3.9 million was awarded as a lump sum “equal to four times the amount of the Company's contributions to Mr. Mulally's Ford Retirement Plan (FRP) and FRP-Benefit Equalization Plan accounts for each year of service from hire through termination” agreed to in February 2013.
The Compensation Committee has revisited Mulally’s compensation twice since the 2013 agreement. On June 30, 2014, the Compensation Committee determined that Mulally “would retain the Performance Unit and stock option grants he received in March 2014,” and in in February 2015, the Committee determined that Mr. Mulally was eligible to receive “a non-pro rated Incentive Bonus award for the 2014 performance-period.”
Shareholder activist (in the good sense of the word) James McRitchie outlines a number of additional concerns with compensation at Ford in his recent CorpGov.net blog post. As McRitchie notes, “Ford shares underperformed the S&P 500 substantially over the most recent one, two, five and ten year periods.”