(Updates shares in the final paragraph.)
Feb. 22 (Bloomberg) -- Ford Motor Co. boosted annual compensation for board members by 25 percent and will pay 29 percent more to Edsel Ford II, its founder’s great-grandson, for his work as a director and consultant.
Ford, the second-largest U.S. automaker, will pay its board members an annual retainer of $250,000, up from $200,000, the Dearborn, Michigan-based automaker said yesterday in a regulatory filing. Edsel Ford, a director, also will receive $650,000 a year in cash as a consultant, up from $500,000.
Ford reported $20.2 billion in net income for 2011, the most since 1998. The results were boosted by a noncash gain of $12.4 billion from eliminating a valuation allowance against deferred tax benefits. The company’s shares lost 36 percent last year after gaining 68 percent in 2010 and more than quadrupling in 2009. The shares gained 14 percent 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, said in a phone interview.
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 $23 billion to restructure its operations, Nissen said.
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.
Edsel Ford Contract
Edsel Ford, 63, has had a consulting contract with Ford Motor since 1999. The increase in Edsel Ford’s consulting compensation is the first he’s received since the arrangement began, Nissen said. The company began paying Edsel Ford’s consulting fee in cash rather than restricted stock during the second half of 2010.
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 said.
The founding Ford family still controls the company through a special class of stock that provides 40 percent voting power. Bill Ford, Edsel’s cousin, is executive chairman of the board. Bill Ford, 54, and Edsel Ford are the only family members on the board.
Ford’s board this month elected former Republican presidential candidate Jon Huntsman to be the 15th member. Huntsman, 51, the former U.S. ambassador to China and governor of Utah, is chairman of the Huntsman Cancer Foundation.
Ford fell 2 percent to $12.28 at the close in New York.
--With assistance from Keith Naughton in Southfield, Michigan. Editors: Bill Koenig, John Lear
To contact the reporter on this story: Craig Trudell in Southfield, Michigan at firstname.lastname@example.org
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