Ford’s CEO received $26M in 2023
Farley’s stock awards of $20.3M was up $5M from last year, according to report filed Friday
Ford CEO Jim Farley received total compensation of $26,470,033 in 2023, according to documents the Dearborn automaker filed Friday with the U.S. Securities and Exchange Commission.
The ratio of the CEO’s total compensation to the median of the annual total compensation of all employees is 312-to-1, a disclosure required in the annual executive compensation report to the U.S. Securities and Exchange Commission. That’s an increase from 281-to-1 in 2022.
The median annual total compensation of all Ford employees, excluding the CEO, was $84,829, up from $74,691 a year earlier. As of Dec. 31, 2023, Ford said it employed approximately 182,698 people, with 93,159 (51%) of them in the U.S.
Ford announced in its earnings report in February that its UAW employees will receive profit-sharing checks averaging $10,416 this year. Profit sharing checks went up despite the 2023 UAW strike on Ford, General Motors and Stellantis, which builds Jeep, Ram Trucks, Dodge, Chrysler and Fiat vehicles. The labor union crafted an historic contract that made up for sacrifices hourly workers made to help the automakers in years past.
On Friday, Ford itemized nearly $80 million in executive compensation for its top five executives in 2023: Farley; chief financial officer John Lawler; board executive chair Bill Ford; chief electric vehicle, digital and design officer Doug Field; and Peter Stern, president of integrated services.
In 2022, Ford paid $71 million in executive compensation for its top five executives: Farley; Lawler; Ford; Field, and then-Ford Blue president Kumar Galhotra. Ford named Galhotra chief operating officer in October.
How much salary did Jim Farley earn?
Ford’s biggest individual earner last year was Farley, whose total compensation broke down as $1.7 million in salary, $20.3 million in stock awards (up from nearly $15.2 million a year earlier), nearly $2.4 million in incentive plan compensation, and the balance in other payments for items such as vehicles and life insurance/death benefit.
The CEO and executive chair of the company are not permitted to fly commercially for safety reasons. Farley spent $611,174 for personal use of aircraft while Ford spent $732,943 for personal use of aircraft and $1,244,098 on security.
Farley and Ford have had the same $1.7 million in salary since 2021.
The company explained Farley’s compensation with these highlights in the regulatory filing:
Led the company to “a solidly profitable year ... despite lengthy and costly work stoppage in the U.S.”
“Completed a multibillion-dollar turnaround in Ford’s international operations, which are now solidlyprofitable after years of deep losses.”
Reached the first multiyear labor contract agreement with both the UAW in the U.S. and Unifor in Canada. “The agreements provided meaningful improvements for more than 60,000 hourly employees, while preserving operational flexibility.”
“Continued to strengthen Ford’s vehicle lineup, focusing on its strength in trucks, vans, performance, and passion vehicles, driving sales growth, and pricing power. Launched hit products such as Super Duty and Mustang; however, delayed launches increased launch costs and slowed initial adoption curves.”
Reduced design and build complexity in Ford’s vehicle lineup for 2024 “that significantly reduced the number of vehicle build combinations, rooting out unnecessary complexity and waste in the build process.”
“Recruited top talent ... revamped Ford’s industrial system, and clarified the organizational structure in each business.”
“Drove improved cost and quality. However, improvement fell short of expectations, particularly in costreduction, resulting in a shortfall against target EBIT (earnings before interest and taxes) and overall quality metrics.”
Ford changed how it’s rewarding executives, tying bonus payments to yearly performance rather than long-term focus, the Ford filing said. Farley said in February that executives were still getting bonuses despite disappointing performance, and he changed that protocol.
Farley earned $20,996,146 in executive compensation in 2022, down from $22,813,174 in 2021.
How much did Bill Ford, top execs earn?
The top four executives listed by Ford all saw increases in their executive compensation:
Bill Ford earned $20,613,100, up from $17,302,266 in 2022 and $18,662,706 in 2021.
Lawler earned $10,031,212 in 2023, up from $8,956,211 in 2022 and $9,4298,325 in 2021.
Field earned $15,348,161, up from $15,087,262 in 2022 and $10,848,080 in 2021.
Stern, a former Apple vice president who began at Ford in August, earned $8,315,917 — including a $1 million signing bonus.
The CFO has overhauled financial reporting protocols to reflect different business units within Ford and to break out detail of gasolinepowered and electric vehicle operations within the company. The biggest money makers are the F-Series trucks, with Super Duty providing the financial backbone of the company as it transitions to electric vehicles. Bonuses for Farley and Ford are down year over year because the company failed to achieve all its performance goals, noted Ford spokesman T.R. Reid. The value of stock is based on future performance,
he said.
How does Ford compare to GM, Stellantis?
Stellantis CEO Carlos Tavares had total compensation of nearly $39.5 million (36.5 million euros) in 2023, about 518 times that of the average Stellantis employee, according to a Free Press report in February about the filing with the U.S. Securities and Exchange Commission. The 56% jump in compensation from 2022 included $10.8 million (10 million euro) in bonuses.
The executive pay package, which included his $2.16 million salary (2 million euros), highlighted the company’s financial performance in 2023, which included a net profit of almost $20 billion and a 12.8% adjusted operating income margin that Stellantis noted was “among the best performance of the automotive industry.”
In 2022, Tavares was compensated $24.8 million (23.5 million euros) or 365 times that of the average employee.
Meanwhile, GM is expected to release its executive compensation for 2023 on April 24. In 2022, GM CEO Mary Barra received $28,979,570 in compensation, down from $29,136,780 million in 2021. She earned $23.7 million in total compensation in 2020 and $21.6 million in 2019, according to Free Press reports.
Ford announced its virtual shareholder call is scheduled for May 9 at 8:30 a.m. The filing was made on Good Friday because the timing is tied to the day of the annual meeting by regulation.