Last year, Ford CEO Jim Farley revealed that the automaker’s management bonuses would be directly tied to quality moving forward as the executive aims to fix a problem that has plagued the company for some time now. Then, this past October, we saw that shift in action after Farley informed Ford management that their bonuses would be cut to 65 percent of their total based on Q4 results. Now, Ford management is seeing their stock bonuses get slashed as the automaker works to cut costs in some troubling times, too.
According to Reuters, roughly half of Ford’s middle managers won’t get any kind of stock bonus at all this year, with senior managers determining who will or won’t receive that benefit, which is typically handed out in March. The move is designed to help the automaker further cut costs while also incentivizing employees to improve their performance. “We are focused on driving a high-performance culture that recognizes and rewards employees for their business contributions,” a Ford spokesperson said.
These stock awards are just one component of Ford’s performance-based compensation system, and are typically seen as a way to help retain talent. Broader, company-side bonuses are based on vehicle quality, the company’s total earnings, and EV sales, which wound up amounting to 69 percent of the total potential payout in 2024, according to the same sources.
Back in March 2023, then-Ford CFO John Lawler stated that the company was looking to slash around $7-$8 billion in total costs, which he perceives as the spending gap between The Blue Oval and its rivals. Meanwhile, Ford has been working on removing costs from its underperforming European operations in a big way with plans to lay off around 4,000 workers in that region by 2027, while also scaling back production of the weak-selling all-electric Explorer and Capri models at the Cologne Electric Vehicle Center in Germany.
Comments
I hope Mr. Farley is taking a pay cut as well. He should really lead by example!
And because his “all in” EV decision is losing $5B/year. Based on that fact alone, his bonus across the board should be $0.
Bill Ford needs to hold Jim Farley and the entire board of directors accountable for the decisions they made when they went all in with the massive investment of mega billions for electric vehicles. This year, 2025 will be the fourth straight year where the Company will have lost $5 billion per year on the electric vehicles. Common sense said the grid and power generation are massively unfit for what they predicted the market would be. Long distant state to state electric vehicle travel is not practical.
He said yesterday that the plan to slash costs is solely to bump up the stock price. Obviously, in hopes of keeping his job. But warranty costs continue to rise and we’ve had quite enough of decontenting, thank you. Might want to start stocking up on boxes, Jim (hopefully).
They don’t care about the consumer just wall street. I hope Dianne Craig gets zero for putting this garbage Corsair on the road. Turn the audio off and listed to all the rattles.
The floggings will continue until the morale improves…..It seems that Ford and GM are in a contest to see who can be the crappiest employer.
Despite Mary’s total over-obsession (still) with EVs, I’d have to say that GM is in better shape than Ford, though. The product lineup is fresher and much broader than Ford’s, despite all those EVs. Mary has made some poor decisions, but they are paled by the prevalence of those made by Ford since the Great Recession. One right after another. Makes me wonder if Billy Boy is the real culprit. How can the Board keep either of the 2 around still? The Ford Family needs to talk Bill and the rest of the Fords into a hands-off approach…
Bill was green before it was fashionable to be green and it is HE that is the EV promoter.
I wonder what Farley could do if Bill Ford wasn’t there.
Ford family members historically don’t know when to leave.
Look no further than Henry Ford and Henry Ford II