Ford’s Jim Hackett Kept $16.7M Pay Package in 2020 Despite Stepping Down as CEO

Former Ford CEO Jim Hackett received total compensation of $16.7 million in 2020 for running the company for nine months, according to documents the Dearborn automaker released Thursday.

That’s down slightly from nearly $17.4 million in 2019.

“Jim (Hackett) has been … advising (Executive Chairman) Bill Ford and the management team on strategic issues. We haven’t detailed which ones,” Ford spokesman T.R. Reid emailed the Free Press in March. “Those topics can be competitively sensitive, especially in a period of industry transition.”

Ford listed Hackett’s retirement from the company as March 31, 2021, in its U.S. Securities and Exchange Commission filings.

CEO Jim Farley,  who assumed the helm on Oct. 1, earned $11,802,054 in executive compensation for the whole year. That’s up from $8,361,479 in 2019. Farley held multiple leadership roles in 2020, including president of new business, technology and strategy as well as chief operating officer.

Ford Motor Co. CEO Jim Farley stands in January with a 2021 Mustang Mach-E 4X model outside of the Ford Piquette Avenue Plant in Detroit.

Ford reported Farley’s CEO pay as $12,491,540 when annualized, or 202 times more than the median compensation for all its employees, excluding the CEO. 

Ford included salary and pay ratio data for its full workforce in its annual executive compensation report to the U.S. Securities and Exchange Commission, a disclosure now required of companies by the 2010 Dodd-Frank Act.

The report showed Ford employees earned a median annual total compensation of $61,778 in 2020, down from $110,706 in 2019 and $64,316 in 2018. The dramatic difference in 2019, Ford said, related to pension values and how the data is calculated.

Ford itemized more than $43 million in executive compensation for its top three executives in 2020: Hackett, Farley and executive chairman Bill Ford, filings show.

Ford’s biggest individual earner last year was Hackett, who served as CEO from May 2017 to last October. His $16.7 million in total compensation broke down as $1.8 million in salary, $7.9 million in stock awards, $5.6 million in options, $828,000 in incentive plan compensation, and about $524,000 in other payments.

Ford also disclosed data for its other highest-paid current executives in overall compensation in 2020:

  • Bill Ford at $16,046,542, down from $16.8 million in 2019
  • John Lawler, who replaced Stone as CFO on Oct. 1, at $5,983,141. Lawler was CEO of Ford Autonomous Vehicles and vice president of mobility partnerships.
  • Hau Thai-Tang, who was promoted from chief product development and purchasing officer to chief product platform and operations officer, at $11,780,405.
  • Kumar Galhotra, president of the Americas and International Markets Group, earned $8,534,094. His responsibilities expanded last year.

Bill Ford’s benefits included $187,442 for personal use of aircraft and $921,030 for personal security. Farley’s included $318,864 for personal use of aircraft. Aircraft costs are based on fuel, maintenance, flight crew, insurance and hangar storage expenses.

Competitor comp

Neither General Motors nor Stellantis have released their executive compensation packages for 2020.

Fiat Chrysler Automobiles paid CEO Mike Manley more than $14.4 million in total compensation in 2019. 

General Motors CEO Mary Barra earned $21.6 million in total compensation in 2019. 

Board diversity

The Ford statement filed with federal regulators also noted that the recommended 14-member board of directors would result in four women and two members who identify as being part of minority groups. The new totals reflect the addition of Alexandra Ford English and Henry Ford III. 

In 2020, Ford compensated its directors in cash, stock and other benefits from $96,760 for director Jon Huntsman to $996,733 for director Edsel B. Ford II, which reflects consulting fees.

The proxy report is prepared in advance of a May 13 virtual annual shareholders meeting. The document notes Farley’s “accession” to CEO led to his unveiling “The Plan: Ford’s strategy to speed our transformation, improve execution, and drive growth. Under The Plan, we will turn our business around by modernizing how we operate, simplifying our processes, building on our strengths, exploring new opportunities, caring for each other and our customers, and leading the electrification revolution in areas of strength.” 

Source: Ford’s Jim Hackett kept $16.7M pay package in 2020 despite stepping down as CEO