Ford has boosted annual pay for board members 25% and will pay 29% more to Edsel Ford II, its founder’s great-grandson, for his work as a director and consultant, a media report said.
Ford will pay its board members an annual retainer of US$250,000, up from $200,000, Bloomberg News reported, citing a Ford regulatory filing.
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Edsel Ford, also a director, will receive $650,000 a year in cash as a consultant, up from $500,000.
Bloomberg noted that Ford reported $20.2bn in net income for 2011, the most since 1998, boosted by a non-cash gain of $12.4bn from eliminating a valuation allowance against deferred tax benefits. Its shares lost 36% last year after gaining 68% in 2010 and more than quadrupling in 2009, but have climbed 16% this year.
“We review all the compensation levels on a regular basis, and in the case of the board, determined this was needed to ensure we continue to attract and retain the talent we have,” Todd Nissen, a Ford spokesman, told Bloomberg News.
Nissen added that Ford cut compensation to directors in half to $100,000 in 2006 when the company hired Alan Mulally as its chief executive officer and borrowed $23bn to restructure its operations.
The board elected to forgo cash payments entirely in 2009, Nissen said. The compensation was re-established to $200,000 in 2010.
Sixty percent of director compensation is deferred into Ford common stock units, the filing said, according to the report.
Edsel Ford, 63, has had a consulting contract with Ford since 1999, Bloomberg noted. The increase in his consulting compensation is the first he’s received since the arrangement began, Nissen said.
The company realized “substantial benefits” from Edsel Ford’s activities on its behalf, according to the filing. His services include dealer relations and representing the company through education projects, heritage events and motor sports, Nissen told Bloomberg.
