US:Ford chairman got 51% pay boost last year to $22 million
Ford chairman got 51% pay boost last year to $22 million
Most of it came from stock awards, reflects company's rebound from '03.
By Eric Mayne / The Detroit News
Ford Motor Co. Chairman and Chief Executive CEO Bill Ford Jr. earned $22 million last year --mostly from stock awards -- up 51 percent from his 2003 compensation package of $14.7 million.
Ford's profits rebounded sharply last year to $3.49 billion from $495 million in 2003. Since he became CEO in 2001, Bill Ford has not received a cash salary.
"He's truly aligned with the shareholders," said Brian Tobin, executive compensation con******t with Hay Group in Chicago. "He's also part of a founding family and that's a slightly different arrangement. He can, at times, afford to say, 'I don't need as high a salary.'"
Bill Ford, 47, plans to donate a portion of the bonus to a scholarship program and tuition assistance fund that benefits Ford employees. A portion will also be donated to Detroit charities.
Specifically, Bill Ford received options to acquire 1.59 million company shares, valued at $10 million. He also received restricted stock awards of $11.9 million and other compensation of $266,173, according to the company's 2005 proxy statement released Wednesday.
The pay package included 103,882 shares of restricted common stock in lieu of a cash salary, and a bonus of 600,720 shares of restricted stock and 240,288 restricted stock equivalents. Ford said the stock equivalents will convert to common Ford shares in a year.
The proxy also revealed pay packages for several other Ford executives:
• Chief Operating Officer Jim Padilla, who also became president on Feb. 1, received a 2004 salary of $966,667, up from $900,000 in 2003. His bonus - including $1.18 million in cash and 69,000 shares of unrestricted common stock worth $854,910 -- totaled slightly more than $2 million.
• Nick Scheele, who retired as president of Ford on Feb. 1, received a salary of $1 million, the same as 2003. His 2004 bonus of $1.5 million consisted of $1.18 million in cash and a grant of 27,000 shares of restricted shares valued at $334,530. In addition, Ford awarded Scheele options to purchase 81,168 shares of common stock in long-term compensation.
• Allan Gilmour, who retired as vice chairman Feb. 1, collected $1.05 million in salary and a bonus worth $1.52 million. In 2003, Gilmour earned $912,000 in salary, and a bonus of $750,000.
• Greg Smith, executive vice president and president of Ford's Americas operations, earned $756,667 in salary and $1.12 million in bonus, consisting of $836,000 in cash and a grant of 23,000 shares of unrestricted common stock valued at $284,970.
In awarding 2004 bonuses, Ford directors determined the company exceeded cost performance goals, partially met the board's customer satisfaction performance goal, but failed to meet global market share targets.
In a related matter, Ford disclosed it has increased annual compensation for outside directors by 65 percent to $200,000, and will require that 60 percent of that be deferred into common stock units. Ford also eliminated attendance and committee membership payments to outside directors. The Ford board includes two insiders -- Bill Ford and Padilla -- and 13 outside directors.
Ford said the new director pay scale reflects the compensation provided by other large companies, promotes greater accountability, and will further align director and shareholder interests.
"Ford wants the directors' compensation to be tied to your interests," the automaker tells shareholders in its proxy.
The move reflects greater scrutiny corporate governance is under after several high-profile accounting scandals.
Ford's new compensation package is "about right for a Fortune 500 company," Tobin said. "It's necessary to get top talent and to pay for the work that they're doing."
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....