After a five-year wage freeze, Ford Motor Co. Executive Chairman Bill Ford Jr. is getting paid again.
It’s another sign that the automaker founded by his great-grandfather Henry Ford is healthy enough to award its top executives generous pay packages. The company recently said it earned $2.6 billion in the second quarter, its fifth-straight quarterly profit.
Bill Ford will be paid $4.2 million in salary and in stock options worth $11.6 million. The total represents pay he has earned over the last two years. He was to be paid Friday.
“The ongoing success of Ford Motor Company is my life’s work and I am fully confident we are on track for sustained profitable growth through our commitment to building great products, a strong business and a better world,” Bill Ford said in an e-mail to employees obtained by The Associated Press.
In 2005, when Bill Ford was chairman and chief executive, he stopped taking a salary or bonus as the automaker floundered and racked up record losses. The following year, he stepped aside as chief executive and hired former Boeing Co. CEO Alan Mulally for the job. Mulally has been widely credited with streamlining the company and turning its operations around.
In 2008, Ford’s compensation committee ruled that Bill Ford could be paid from the beginning of 2008 on once the company’s automotive operations returned to profitability. The committee recently decided those conditions have been met. Ford made $2.7 billion in 2009, its first annual profit in four years.
Ford’s U.S. sales rose 28 percent in the first six months of this year, almost double the overall industry’s sales increase, thanks to well-received products, good quality rankings and consumer goodwill. Unlike General Motors Co. and Chrysler Group LLC, Ford avoided bankruptcy and didn’t take federal bailout money during the economic downturn last year. Ford also grabbed sales from Toyota Motor Corp. after Toyota recalled millions of vehicles for safety problems.
Ford has said it expects to make a profit this year and next and expects to end 2011 with more cash than debt. Right now it has $27.3 billion in debt and $21.9 billion in cash.
Mulally made $17.9 million in 2009, about 1 percent more than the prior year. Most of that total was in stock options; his salary was $1.4 million. Both Mulally and Bill Ford took a 30 percent salary cut in 2008 that remains in effect.
Still, Mulally’s salary has been a sticking point for some of the company’s factory workers, who cited his pay when they rejected a new round of wage concessions last October. The United Auto Workers union didn’t immediately comment Friday on Ford’s decision to restore Bill Ford’s salary.
In a filing Friday with the U.S. Securities and Exchange Commission, Bill Ford also said he is selling $28 million worth of shares. In the e-mail to employees, Ford said he is selling the stock to pay off personal loans he took out in recent years to purchase Ford shares.
He also said he is donating $1 million to a college scholarship fund for employees’ children.
(Copyright 2010 by The Associated Press. All Rights Reserved.)