Ford disclosed the salary and pay ratio data for its executives in an annual compensation report to the U.S. Securities and Exchange Commission. In that report, the company showed how much Ford employees made last year as well as top-earners, like CEO Jim Hackett. The Detroit Free Press broke down the numbers in that report — figures which should be a point of sharp focus as Ford, among the other Big Three automakers, navigate the ongoing COVID-19 crisis.
At time of writing, Ford’s production facilities are shut down for manufacturing vehicles. Beyond that, the company mulled partially deferring executive salaries — temporarily cutting them between 20 and 50 percent over the next five months — and possibly resorting to layoffs, according to a CNBC report.
Hackett was, by a wide margin, Ford’s largest individual earner in 2019. His $17.4 million in total compensation was down slightly from $17.8 million in 2018, but he still earned 157 times the average employee’s median total compensation of $110,706. Employees did achieve higher compensation than in 2018 (when it was $64,316), but Ford acknowledged that drastic difference came down to pension values and how it calculates compensation figures.
Other highly-paid executives include chief financial officer Tim Stone, who earned $8.3 million in his first year at Ford. Former CFO Bob Shanks also received $8.3 million in 2019. Executive chairman Bill Ford received $16.8 million, while Joe Hinrichs (president, Automotive) was paid $11 million. Jim Farley, who is now chief operating officer, earned $5.9 million in 2019.
How will the landscape change in 2020?
While Hackett did earn a substantial amount, he hasn’t been the highest-earning automotive executive among the Big Three. GM’s Mary Barra earned $21.87 million in 2018. GM has not yet reported her total compensation for 2019. Fiat Chrysler Automobiles CEO Mike Manley received $14.4 million in 2019, including a $1.3 million bonus and a long-term incentive totaling $9.6 million. Manley earned 232 times the average FCA employee, whose total compensation was $62,259, as reported by the Detroit Free Press.
In a time where worker anxiety is at its peak during the coronavirus pandemic, time will tell how compensation shifts at all three American automakers in 2020. If any of the three resort to large-scale layoffs — FCA did release 2,000 contract workers in March, and all three have furloughed some employees — top executives’ pay will likely come under intense scrutiny in early 2021. Ford’s stock prices have also tumbled to just over $4 a share (down over half in March alone), and the company had its credit rating downgraded to ‘junk’ status on lower demand caused by the coronavirus pandemic, and an outlook that Ford could struggle to maintain a competitive position as it burns through its cash reserves and lines of credit.
While all Big Three automakers suffered on the sales front through March 2020, one strong area was in trucks. Here’s how they performed in the first three months of this year: