Ford

Annual meeting: May 13

Former President and CEO James Hackett was the highest paid executive at Ford in 2020, with a total compensation of $16,728,505. His pay consisted of a $1.8 million salary, a stock award valued at $7,943,214, options worth $4,463,682, and an incentive compensation award of $828,000. This comes even as Hackett was replaced as CEO on October 1 but remained as an adviser with the company before retiring on March 31, 2021.

Surprisingly, the second highest paid executive at Ford wasn’t the new CEO but instead Executive Chair Bill Ford, with $16,046,542 in total reported compensation for 2020. As I noted in a 2015 blog post, it is unusual for an executive chairman to be paid at this level. Despite his $1.7 million salary and the fact that he currently owns over 4 million shares (down considerably from the shares owned in 2015), he was still awarded over $10 million in stock and option awards.

Third highest paid is incoming CEO James Farley, who ended 2020 with a total reported compensation of $11,802,054. The new position comes with an annual salary increase, from the reported $1,425,000 in 2020 to $1.7 million for this year. In addition, Farley and all other NEOs were awarded “Pandemic Response” TB-RSUs as supplemental compensation for 2020. Farley, in particular, was awarded $685,330 (about 60 percent of his total incentive bonus) for his “strong leadership both in his role as COO and in his role as President and CEO” during the pandemic. The bottom line is that having three executives each making over $15,000,000 in a year when the company has faced revenue losses and workforce cuts is troubling. 

Finally, it should be noted that the median employee pay at Ford declined considerably year over year. The median employee was reported to have made $110,706 in 2019, compared to $61,788 in 2020. While the company has told press that a significant component of the difference is from a change in pension value, it is nevertheless worth noting that the company reported having 10,000 more employees in 2017 and a higher employee taxable income in 2017 (the last year it was disclosed) than in 2020. Pension accounting is notoriously complicated, but I find it hard to understand why pensions in 2017 were worth so much more per employee than they are today.