DETROIT — Jim Hackett’s compensation in his second full year as CEO of Ford Motor Co. fell about 2 percent as the automaker failed to meet many financial targets.
Hackett, 64, earned $17.36 million in total compensation in 2019, according to the company’s annual proxy statement, down from the $17.75 million he earned in 2018. He earned $16.7 million in 2017 after becoming CEO in May of that year.
His 2019 compensation included a $1.8 million base salary, unchanged from 2018; $13.2 million in stock awards, up nearly $500,000 from 2018; and $1.75 million in bonuses and incentives, down more than $800,000. Hackett’s total compensation also includes $91,523 for personal use of aircraft, a perk Ford’s CEO has long enjoyed.
Ford’s top executives hit 54 percent of their business performance targets in 2019,including only 4 percent of company revenue targets and 28 percent of cash flow targets. The total number was helped by executives hitting 118 percent of the company’s quality targets.
Ford struggled financially in 2019 after botching the launch of the redesigned Explorer utility vehicle and struggling with warranty expenses. Its modest $47 million net income figure was the lowest since 2008.
Hackett said the automaker’s execution in 2019 was “simply not nearly good enough” but argued that fundamental changes to its product lineup and business units would eventually yield positive results.
Executive Chairman Bill Ford’s total compensation jumped to $16.76 million from $13.84 million a year ago, mostly due to a change in pension value. His compensation includes $419,275 for personal use of aircraft and $899,219 for security.
Jim Farley, who was recently promoted to COO, made $8.36 million in 2019 under his role as president of new business, technology and strategy, an increase over the $5.86 million he made in 2018. He earned a $185,600 bonus for his role in securing a partnership with Mahindra as well as other work in Ford’s mobility ventures.
Joe Hinrichs, who retired abruptly as Farley was elevated to the COO role, made $11.02 million in 2019 as president of automotive, an increase over the $5.82 million he earned in 2018.
Ford said in its proxy that Hinrichs would receive severance pay equal to two years’ base salary (he earned a $1.3 million base salary in 2019), which will stop if he gets another job during that time. He’ll also receive benefits under the company’s select retirement plan.
“The Committee believes these arrangements are appropriate compensation for the many contributions Mr. Hinrichs made to Ford throughout his career,” Ford said in the proxy.
CFO Tim Stone made $8.32 million after joining the automaker in June. Bob Shanks, his predecessor who retired, made roughly the same.
Hackett, Farley and Stone will defer 50 percent of their salaries, effective May 1, amid the coronavirus crisis. Ford will defer 100 percent of his salary as of that date.
The accumulated deferred salary amounts will be paid after the company has repaid at least $7 billion of the $15.4 billion credit lines it tapped last month.