Ford CEO Jim Hackett pay raise means he earns 276 times more than median employee
DETROIT – Ford CEO Jim Hackett received total compensation of $17.8 million in 2018, up from $16.7 million in 2017, according to finance documents released by the company.
The Dearborn, Michigan-based carmaker reported Hackett's pay was 276 times more than the median compensation for all U.S.-based Ford employees.
Ford included salary and pay ratio data for its full workforce in its annual executive-compensation report Friday 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, full-time salary of $64,316 in 2018, up from $58,693 in 2017.
In 2017, Hackett received a total of $1.3 million in salary, along with a $1 million bonus, $10.3 million in stock awards, $3.6 million in incentive-plan compensation and $420,971 in other compensation.
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Pay raises amid job cuts
Just hours after releasing the executive salaries and the preliminary proxy packet prepared for shareholders, Ford announced job cuts in Germany and the United Kingdom. Ford will cut 5,000 jobs in Germany and has not confirmed the number of jobs eliminated in the U.K. amid massive restructuring of the struggling European operation.
The automaker has said Brexit uncertainty does little to help with long-term manufacturing plans, which involve costly investments in electrification and driverless vehicles. Ford officials are having ongoing discussions with Volkswagen about partnership opportunities and cost-cutting collaboration.
On Friday, Ford offered voluntary separation packages to employees overseas while trying to speed up its $11-billion global restructuring effort.
"It is unfortunate that they are willing to announce the number of jobs being cut everywhere but the U.S., where they keep slashing silently but sharing nothing, leaving employees, families, and communities hanging,” said economist Jon Gabrielsen, who advises the auto industry and suppliers.
Employees at Ford World Headquarters described to the Free Press on Friday discomfort amid the contrast of job cuts and executive pay raises.
Ford's biggest individual earner last year was Hackett, 63, who received $17.8 million in total compensation. It broke down as $1.8 million in salary; $12.7 million in stock awards; $2.6 million in incentive plan compensation, and about $617,710 in other compensation.
Ford also disclosed data for its four other highest-paid current executives:
CFO Bob Shanks was compensated $8.4 million for 2018, compared with $6.7 million in 2017 and $6.3 million in 2016.
Executive Chairman Bill Ford was compensated $13.8 million, down from $15.6 million in 2017 and $13.9 million in 2016.
President of Global Markets Jim Farley was compensated $5.9 million, down from $13.4 million in 2017 and $6.6 million in 2016.
President of Global Operations Joe Hinrichs was compensated $5.8 million, down from $12.1 million in 2017 and $6.7 million in 2016.
While Farley and Hinrichs saw a dip in overall compensation, each actually had a base salary increase. Farley's went from $973,000 in 2017 to $1 million in 2018. Hinrichs saw a raise of about $20,000 to $1.1 million. The reason for a lower overall compensation reflects a lower bonus payout for 2018 performance. And, for those two, they received special stock grants in 2017, which were not repeated in 2018.
Private plane trips, security
Bill Ford saw his salary grow from $1.65 million to $1.7 million in 2018, but his bonus dropped from $1 million in 2017 to $720,000. His benefits included $245,658 for personal use of aircraft and $909,891 for security.
Perks for Hackett included $104,342 for personal use of aircraft in 2018.
"Company policy does not allow the president and CEO or the executive chairman to fly commercially due to security concerns. The company pays the costs associated with their use of private aircraft for business and personal travel. The families of these persons are allowed to accompany them on trips when they travel on private aircraft," reads page 57 of the packet prepared for shareholders.
Currently, Hackett gets triple the compensation he earned as CEO of Steelcase. He received $5.8 million in total compensation during each of his last three years; he retired in 2014 after three decades with the office furniture maker, according to Automotive News.
Hackett took the helm of the iconic carmaker on May 22, 2017. He made headlines when he sent a memo in January that said 2018 "was mediocre by any standard."
Overall, automakers say they are heading into a slowing sales cycle.
Ford lost money in every market in the world except North America in 2018.
The company reported 2018 earnings before interest or taxes – EBIT – of $7 billion, down from $9.6 billion in 2017.
Ford said it made $7.6 billion pretax in North America, which will result in the $7,600 profit-sharing checks on average for a majority of the company's 56,000 hourly UAW workers.
When the Free Press requested the name, title and compensation package for the highest-paid female executive at Ford, company spokeswoman Karen Hampton said Ford would not disclose information for employees not listed in the company's proxy statement.
GM, Fiat Chrysler
Ford provides its CEO and its executive chairman compensation packages that total $31.6 million, which exceeds dollars spent on those positions at other Detroit Three companies.
General Motors CEO Mary Barra, 57, also is executive chairman of the board; her $21.96 million compensation package in 2017 covered both roles. GM has not yet reported its executive salaries or pay ratio figures.
Meanwhile, Fiat Chrysler Automobiles said in February that CEO Mike Manley earned a salary of $680,434 for his six months of work after the unexpected death of Sergio Marchionne on July 25. The longtime CEO earned $11.95 million in 2017 plus $35.8 million in bonus and stock benefits over three years.
Manley, 55, stands to earn $14 million in compensation for 2019 if he meets targets; $1.6 million salary, $2.4 million bonus, $10 million equity. FCA paid its chairman John Elkann $1.92 million in 2018.
Contact Phoebe Wall Howard: 313-222-6512 or phoward@freepress.com. Follow her on Twitter @phoebesaid. Staff writer JC Reindl contributed to this report.
This article originally appeared on Detroit Free Press: Ford CEO Jim Hackett pay raise means he earns 276 times more than median employee
