The Ford Motor Co said on Friday that it would pay its executive chairman, William Clay Ford Jr, for the first time since 2005, now that it has been profitable for more than a year.
Ford, the great-grandson of the carmaker’s founder, Henry Ford, will receive US$4.2 million in cash this year as well as stock options worth about US$11.6 million, the company disclosed in a filing with the Securities and Exchange Commission.
The figures include compensation earned by Ford since 2008 that he agreed to defer until the company’s automotive operations had returned to profitability. Ford volunteered to forgo all pay in 2006 and 2007.
Ford’s compensation committee decided this week that the company’s finances were healthy enough to restore Ford’s pay, a Ford spokesman, Mark Truby, said. The committee based its decision on the company’s recent profits and the outlook for this year and next, determining that Ford’s recovery was sustainable.
Ford informed employees that he would be paid in an e-mail thanking them for their efforts.
Ford, widely considered to be in the worst shape of the three Detroit carmakers at the time Ford’s pay was suspended, has reported positive earnings for five consecutive quarters.
It earned US$2.7 billion last year and US$4.7 billion in the first half of this year. Executives have projected even better results next year.
The regulatory filing also showed that Ford, who served as chief executive until the hiring of Alan Mulally in 2006, sold US$28 million of Ford stock. Ford said he did so to pay off personal loans that he used to buy stock.
Ford also said he would donate US$1 million to a scholarship fund for children of Ford employees in the US.
Ford shares rose 6 cents on Friday to close at US$13.04. The company’s shares were trading at around US$9 in May 2005 when it stopped paying Ford, and fell to a low of US$1.26 in November 2008.
After years of cutting jobs and benefits, the company has been moving in the opposite direction lately.
For this year, it restored merit pay increases, tuition assistance and a matching contribution to salaried employees’ retirement plans. That move irritated members of the United Automobile Workers union, who argued that the sacrifices they made as Ford’s finances deteriorated should be reversed as well. As a result, Ford restored its tuition reimbursement program for hourly workers.
It hired 2,000 workers in North America this year, mostly to work at plants in Chicago and Mexico to build the Ford Explorer crossover vehicle and the newly introduced Fiesta subcompact car.
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