Ford CEO Farley saw a drop in compensation as the automaker missed performance targets
Jamie L. LaReau- Farley and other leaders did not meet performance targets to earn a higher bonus.
- Ford employee median salary rose.
Ford Motor Co. CEO Jim Farley and other company leaders saw a decline in total compensation for 2024 from the previous year because the Dearborn-based automaker failed to hit performance objectives, most notably quality improvement targets, according to documents Ford filed Thursday with the U.S. Securities and Exchange Commission.
For 2024, Farley's total executive compensation was $24,861,866, down from $26,470,033 in 2023, according to the documents.
Ford disclosed that it came up short in its annual performance bonus metrics. The targets in that metric consist of meeting board goals for pretax adjusted earnings before interest and taxes, global electric vehicle sales volumes, connected services, year-over-year revenue growth and quality.
"Our overall achievement against the targets set for our 2024 Annual Performance Bonus Plan yielded a business performance factor of 69%. This result was largely driven by challenges in the quality metric," the filing stated. "The Committee believes the final 2024 payouts for the Named Executives are consistent with the performance-based nature of the Annual Performance Bonus Plan, holding executives accountable for and emphasizing the importance of both their individual performance and the performance of the Company."
The ratio of the CEO's total compensation to the median of the annual total compensation of all employees is 253-to-1, a decline from 312-to-1 in 2023 and the lowest ratio in three years. The median annual total compensation of all Ford employees, excluding the CEO, was $98,273, up from $84,829 a year earlier. As of Dec. 31, 2023, Ford had 182,698 employees, with 93,159, or about half of them, located in the United States.
Farley's report card
Ford itemized nearly $71 million in executive compensation for its top five executives in 2024: Farley; Chief Financial Officer John Lawler, who has moved to vice chair; Board Executive Chair Bill Ford; Chief Electric Vehicle, Digital and Design Officer Doug Field, and Peter Stern, president of integrated services. Of that $71 million, $56 million of it is connected to stock awards, which means the money is dependent on future performance of the company. In 2023, Ford itemized about $80 million to those same top executives.
Farley was Ford's biggest individual earning executive last year, but because his compensation is largely dependent on how the company performs, his total compensation declined year over year. Last year, Ford changed how it rewards executives, tying bonus payments to yearly performance rather than long-term focus. Farley said last year that executives were still getting bonuses despite disappointing performance, so he changed the practice.
In the filing, the company praised Farley for delivering solid financial results and revenues, recruiting top talent, driving a diversified product strategy, advancing a multibillion-dollar turnaround of Ford's international operations, and building Ford's software and services business. But it said he fell short on meeting quality improvement goals and cost-cutting targets.
Here is how Farley's total compensation broke out: $1.7 million in salary, $20.7 million in stock awards (up from $20.3 million a year earlier), nearly $1.6 million in incentive plan compensation (down from $2.4 million in 2023), and the balance of $897,680 in other payments for items such as vehicles and life insurance/death benefit.
Executive compensation breakout
Bill Ford's 2024 total compensation was listed at $20,379,912, down from $20,613,100 in 2023. His salary was $1.7 million, his stock awards were $16.1 million (up from $15.8 million a year earlier), $476,100 in incentive plan compensation (down from $705,600 a year earlier), and $2.1 million in other compensation.
- Lawler's total compensation was listed at $9,366,054, down from $10,031,212.
- Field's total compensation was $15,538,515, up slightly from $15,367,968 a year earlier.
- Stern's compensation was listed as $10,826,377, but because he left the company in December, Stern forfeited all unvested equity awards as well as any payment to which he would have been entitled under the annual performance bonus plan and essentally was paid his salary of $925,185, up from $345,653 a year earlier but far below the $8.3 million he was granted in 2023.
The CEO and executive chair of the company are not permitted to fly commercially for safety reasons. Farley spent $343,375 for personal use of aircraft, down from $611,174, while Bill Ford spent $519,845, down from $732,943 for personal use of aircraft and $1,394,538 on security, up from $1,244,098.
The other Detroit automaker executives
Last month, Stellantis disclosed that it paid its former CEO Carlos Tavares, more than $24 million (23.09 million euros) in total compensation last year. That compensation was down almost 37% from $39.5 million (36.5 million euros) in 2023, was 350 times that of the average worker’s last year, which was listed as $68,609 (65,993 euros) and which had also dropped from $73,195 (79,404 euros), according to the filing.
General Motors has not yet released its executive compensation figures. In April 2024, it reported its CEO and Chair Mary Barra saw her compensation drop 4% in 2023 compared with 2022, largely because GM did not hit its shareholder value targets to which part of her compensation is tied. GM reported that Barra had a total compensation of $27,847,405 million in 2023 for running the company and chairing the board of directors. That compared with $28,979,570 in 2022.
UAW workers profit-sharing
Last month, Ford announced its full-year adjusted earnings were down from those in 2023 and that its 2024 profits in the United States will result in about 57,000 UAW hourly workers receiving profit-sharing checks of up to $10,208, compared with $10,416 for 2023, but up from $9,176 for 2022.
Stellantis, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands, announced in February its profit-sharing checks of $3,780 for UAW members fell almost 73% from what was paid in 2024.
In January, as a result of GM's yearly gains in profits, about 45,000 U.S. hourly workers learned they would receive a record-setting profit-sharing check. GM said the 2024 pretax payout for its UAW-represented workforce will be up to $14,500 for those who qualify. That's a jump from the 2023 payout of $12,250. For 2022, GM's payout of was $12,750, the highest since 2016 when it was at $12,000 per employee.
Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.