Ford Motor Co. Chairman and Chief Executive Bill Ford on Thursday reiterated his pledge not to accept a salary or bonus until the company’s automotive operations return to profitability, but the action didn’t satisfy every shareholder at the automaker’s annual meeting.
“Mr. Ford is a failure. He has put shareholders and the company at bankruptcy’s door,” said Sam Joanette, a Ford retiree and shareholder from Miami Beach, Fla., who said he has lost more than $1 million since investing most of his retirement money in Ford in 1999.
“Mr. Ford knows he is not qualified, that he is in over his head.”
Joanette pointed to a recent report from the investment firm JPMorgan showing the credit market has set at 43 percent the probability of Ford defaulting on its bonds within three years.
Joanette asked Ford to commit to bringing the nation’s second biggest automaker into the top 25 percent of companies on the Standard & Poor’s 500 index in terms of shareholder return, a promise Joanette said Bill Ford originally made in 1999. Bill Ford didn’t respond to that request or to the criticism.
Other shareholders jumped to the CEO’s defense. Longtime shareholder activist Evelyn Davis of Washington said the attack was unwarranted.
“He’s been a chairman who’s very responsive to small shareholders,” Davis said.
Shareholders also voted, by a 77 percent margin, to keep Ford’s share structure, which gives Ford family members 16 votes per share while other shareholders have only one vote.
Bill Ford told the audience of around 65 shareholders that the company is on track with its North American restructuring plan, which calls for cutting 30,000 jobs and closing 14 plants by 2012 in addition to changing the company’s bureaucratic culture, which he says has stifled innovation in the past.
“We know we can’t just cost-cut our way to success, so we are changing the business model that’s existed for many decades at Ford,” Bill Ford said.
Shareholders made few comments about the restructuring plan, but several took Ford’s environmental record to task, saying it has the worst average fuel economy of any major automaker at 19.1 miles per gallon.
Russell Long, director of the environmental group Bluewater Network, praised Ford for promising to make 250,000 hybrid vehicles by 2010, but he said Ford needs to explore other technologies such as plug-in hybrids, which give hybrid batteries an extra electrical charge. No manufacturer currently makes a plug-in hybrid.
“We believe Ford needs to be even more courageous,” Long said.
Bill Ford said the company is working hard on plug-ins but isn’t ready to make any announcement. He also cited the company’s commitment to ethanol vehicles, saying Ford will produce 250,000 ethanol-capable vehicles this year.
Shareholders overwhelmingly voted down several environmental proposals that would have required Ford to report how much it spends lobbying against tougher fuel economy standards — also called CAFE regulations — and link executive compensation to the reduction of greenhouse gases.
“I think that CAFE and greenhouse gases are a diversion from developing safe, reliable, affordable automobiles for the general public,” said Joe Baker, a shareholder from Mississippi.
Ninety-five percent of shareholders also voted against a proposal that would have asked the company to remove sexual orientation from its anti-discrimination policy. Some conservative groups have called for a boycott of Ford because it advertises in gay publications and supports gay rights groups.
Bill Ford announced at last year’s annual meeting that he wouldn’t take a salary or bonus until the company’s automotive operations returned to profitability. Ford’s automotive operations lost more than $2.5 billion in the first quarter of this year.
Bill Ford’s total compensation in 2005 was $13.3 million, 40 percent less than in 2004. While he took no salary or bonus, he did receive stock equivalents that were agreed to before he made his pledge.