Ford chairman's pay falls 40 percent

/ Source: The Associated Press

Ford Motor Co. Chairman and CEO Bill Ford received total compensation of $13.3 million in 2005, or 40 percent less than the previous year after the automaker’s North American division lost more than $1 billion, according to a proxy statement filed Friday with federal regulators.

The No. 2 U.S. automaker also said shareholders will vote on 10 proposals at Ford’s annual meeting on May 11 in Wilmington, Del., including one that would remove sexual orientation from Ford’s nondiscrimination policy and another that would tie executive compensation to progress in reducing greenhouse gas emissions from vehicles. Ford opposes both changes.

Bill Ford said last May that he would take no salary, bonus or other awards until the automaker’s automotive operations return to profitability. But he did receive nearly $5 million in restricted stock equivalents under an incentive plan established before he made that commitment. Ford plans to donate that amount to charity, the company said.

Ford also was granted 1.7 million stock options under a separate incentive plan. The value of those options was nearly $7.5 million when they were granted last year, but they currently have no value because the strike price is above the current trading price of Ford shares.

Ford took no cash salary in the first quarter of 2005, but did receive a restricted common stock grant valued at $372,043 for the period before he said he would accept no pay. He also was credited with another $466,755 in compensation, including the value of his required use of the company airplane.

Ford, the great-grandson of company founder Henry Ford, received a compensation package valued at $22 million in 2004.

The Dearborn-based automaker said Ford President and Chief Operating Officer Jim Padilla received a compensation package worth nearly $6.8 million in 2005, including a $1.5 million salary and a performance-based incentive award of restricted stock valued at $1.8 million. Padilla, 59, announced Thursday that he will step down on July 1.

Compensation for Mark Fields, executive vice president and president of the Americas, totaled $3.2 million, including a $972,500 salary and a $1 million cash retention payment. Fields, one of the main architects of Ford’s restructuring plan, will have to repay the $1 million if he leaves voluntarily in the next two years.

Ford also reported that a cousin of Bill Ford’s, Henry Ford III, who joined the company’s labor relations staff in February, is making $86,000 a year. Henry Ford III is the son of board member Edsel Ford II. The Ford family controls 40 percent of the company’s voting stock.

Ford earned $2 billion last year, down 42 percent from a year earlier but still its third consecutive yearly profit. But its North American division lost $1.6 billion, and Ford has announced plans to cut 30,000 jobs and close 14 plants as part of a restructuring.

Shareholders likely will grill executives about the restructuring at the annual meeting, but the shareholder proposals in the proxy statement are unrelated to the turnaround plan. Ford said the proposal that seeks to remove sexual orientation from its nondiscrimination policy would hurt recruitment and sales.

Ford also opposes the attempt to tie executive compensation to emissions. Ford said it takes global warming seriously, but believes the proposal would overemphasize one aspect of performance at the expense of others. None of the proposals are binding and would be considered by the company’s board if they pass.

Ford also said Friday that board members Carl Reichardt, Marie-Josee Kravis and Padilla will not stand for re-election at the company’s annual meeting. The board plans to officially reduce the number of directors from 15 to 12 at the meeting.