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Ford Motor Co. CEO Jim Farley’s Compensation Package Soars to $26.5 Million in 2023

Ford Motor Co. CEO Jim Farley’s compensation package for 2023 totaled nearly $26.5 million, representing a 26% increase from the previous year due to changes in stock grants. The increase in value was primarily driven by adjustments in how the stock awards were calculated.

With an unchanged base salary of $1.7 million, Farley’s total package saw a significant boost, mainly attributed to the surge in the reported value of stock awards. The automaker revised its method of calculating grants by linking the majority of the vestment to future shareholder returns compared to other companies, resulting in a substantial increase in reported stock award value.

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Implications of Farley’s Compensation Package Increase

The surge in Farley’s total compensation to $26.5 million reflects the emphasis on aligning executives’ interests with shareholders’ returns. The reported value of stock awards, amounting to $20.3 million and up 26% from the previous year, emphasizes the importance of performance metrics tied to stock worth and shareholder returns.

Moreover, Farley’s bonuses experienced a 13% decline to nearly $2.4 million, signaling missed performance targets by the automaker. The increased value of other compensation, exceeding $2 million, further highlighted the perks such as private aircraft and company vehicles that executives receive in addition to their base salary and stock awards.

Farley’s total compensation, amounting to 312 times the median annual total compensation of all Ford employees, showcases the significant disparity between executive pay and average employee wages. This difference has sparked discussions on income inequality and corporate governance practices.

The disclosure of executive compensation in the proxy statement filed with the U.S. Securities and Exchange Commission sheds light on the financial performance of the company. Despite challenges faced by the automaker, including quality issues and labor strikes, Executive Chairman Bill Ford Jr. remains optimistic about the future prospects of the company.

“Our 2023 results underscore the potential of our plan, our leadership, and our people,” said Bill Ford Jr. in a letter to shareholders. The company’s shift from a net loss in 2022 to a $4.3 billion net income in 2023 signifies a turnaround in its financial performance.

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