pre14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Preliminary 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant þ |
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Filed by a Party other than the Registrant
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Check the appropriate box: |
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þ Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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o Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Ford Motor Company
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11. |
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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
Ford
Motor Company
Important
Notice Regarding the Availability of Proxy
Materials
for the Shareholder Meeting
to
Be Held on May 13, 2010
Notice
of 2010
Annual
Meeting of Shareholders
and
Proxy Statement
Ford
Motor Company
One
American Road
Dearborn,
Michigan
48126-2798
April 1, 2010
Dear Shareholders:
Our 2010 annual meeting of shareholders will be held at the
Hotel du Pont, 11th and Market Streets, Wilmington,
Delaware, on Thursday, May 13, 2010. The annual meeting
will begin promptly at 8:30 a.m., Eastern Time. If you plan
to attend the meeting, please see the instructions on
page 4.
Please read these materials so that youll know what we
plan to do at the meeting. Also, please either sign and return
the accompanying proxy card in the postage-paid envelope or
instruct us by telephone or via the Internet as to how you would
like your shares voted. This way, your shares will be voted as
you direct even if you cant attend the meeting.
Instructions on how to vote your shares by telephone or via the
Internet are on the proxy card enclosed with this proxy
statement.
William Clay Ford, Jr.
Chairman of the Board
Whether or not you plan to attend the meeting, please provide
your proxy by calling the toll-free telephone number, using the
Internet, or filling in, signing, dating, and promptly mailing
the accompanying proxy card in the enclosed envelope.
Table of
Contents
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A-1
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Notice of Annual
Meeting of Shareholders
of Ford Motor Company
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Time:
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8:30 a.m., Eastern Time, Thursday, May 13, 2010
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Place:
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Hotel du Pont
11th and Market Streets
Wilmington, Delaware
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Proposals:
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1.
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The election of directors.
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2.
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The ratification of the selection of PricewaterhouseCoopers LLP
as Fords independent registered public accounting firm for
2010.
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3.
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Approval of Tax Benefit Preservation Plan.
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4.
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A shareholder proposal related to disclosing any prior
governmental affiliation of directors, officers, and consultants.
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5.
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A shareholder proposal related to consideration of a
recapitalization plan to provide that all of the Companys
outstanding stock have one vote per share.
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6.
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A shareholder proposal requesting the Company to issue a report
disclosing policies and procedures related to political
contributions.
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7.
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A shareholder proposal requesting the Board to adopt a policy
that provides shareholders the opportunity to cast an advisory
vote to ratify the compensation of the Named Executives.
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8.
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A shareholder proposal requesting that the Company not fund any
energy savings projects that are solely concerned with
CO2
reduction.
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Who Can Vote:
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You can vote if you were a shareholder of record at the close of
business on March 17, 2010.
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Date of
Notification:
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Shareholders are being notified of this proxy statement and the
form of proxy beginning April 1, 2010.
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Peter J. Sherry, Jr.
Secretary
April 1, 2010
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Defined
Terms
Annual Incentive Compensation Plan or
Incentive Bonus Plan means Fords
Annual Incentive Compensation Plan.
Class B Stock means Fords
Class B Stock.
Deferred Compensation Plan means
Fords Deferred Compensation Plan.
Dividend Equivalent means cash or
shares of common stock (or common stock units) equal in value to
dividends, if any, paid on shares of common stock.
Final Award means shares of common
stock, Restricted Stock Units,
and/or cash
awarded by the Compensation Committee under a Performance Unit.
Ford or we
or Company means Ford Motor
Company.
Long-Term Incentive Plan means
Fords 1998 or 2008 Long-Term Incentive Plan.
Named Executives means the executives
named in the Summary Compensation Table on p. 53.
NYSE means the New York Stock
Exchange, Inc.
Performance Unit means, under the
Long-Term Incentive Plan, an award of the right to earn up to a
certain number of shares of common stock, Restricted Stock
Units, or cash, or a combination of cash and shares of common
stock or Restricted Stock Units, based on performance against
specified goals established by the Compensation Committee.
Restricted Stock Equivalent or
Restricted Stock Unit means, under the
Long-Term Incentive Plan, the right to receive a share of common
stock, or cash equivalent to the value of a share of common
stock, when the restriction period ends, as determined by the
Compensation Committee.
SEC means the United States Securities
and Exchange Commission.
Senior Convertible Notes means the
Ford Motor Company 4.25% Senior Convertible Notes due 2036
and the Ford Motor Company 4.25% Senior Convertible Notes
due 2016.
Trust Preferred Securities means
the Ford Motor Company Capital Trust II 6.50% Cumulative
Convertible Trust Preferred Securities.
1998 Plan means Fords 1998
Long-Term Incentive Plan.
2008 Plan means Fords 2008
Long-Term Incentive Plan.
ii
Ford
Motor Company
Proxy
Statement
The Board of Directors is soliciting proxies to be used at the
annual meeting of shareholders to be held on Thursday,
May 13, 2010, beginning at 8:30 a.m., Eastern Time, at
the Hotel du Pont, 11th and Market Streets, Wilmington,
Delaware. This proxy statement and the enclosed form of proxy
are being made available to shareholders beginning April 1,
2010.
QUESTIONS AND
ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL
MEETING
What is a
proxy?
A proxy is another person that you legally designate to vote
your stock. If you designate someone as your proxy in a written
document, that document also is called a proxy or a proxy card.
What is a
proxy statement?
It is a document that SEC regulations require that we make
available to you when we ask you to vote your stock at the
annual meeting.
What is the
purpose of the annual meeting?
At our annual meeting, shareholders will act upon the matters
outlined in the notice of meeting, including the election of
directors, ratification of the selection of the Companys
independent registered public accounting firm, approval of the
Tax Benefit Preservation Plan, and consideration of
[five] shareholder proposals, if presented at the meeting.
Also, management will report on the state of the Company and
respond to questions from shareholders.
What is the
record date and what does it mean?
The record date for the annual meeting is March 17, 2010.
The record date is established by the Board of Directors as
required by Delaware law. Holders of common stock and holders of
Class B Stock at the close of business on the record date
are entitled to receive notice of the meeting and to vote at the
meeting and any adjournments or postponements of the meeting.
Who is
entitled to vote at the annual meeting?
Holders of common stock and holders of Class B Stock at the
close of business on the record date may vote at the meeting.
Holders of Trust Preferred Securities and Senior
Convertible Notes cannot vote at this meeting.
On March 17, 2010, 3,339,877,422 shares of common
stock and 70,852,076 shares of Class B Stock were
outstanding and, thus, are eligible to be voted.
1
What are the
voting rights of the holders of common stock and Class B
Stock?
Holders of common stock and holders of Class B Stock will
vote together without regard to class on the matters to be voted
upon at the meeting. Holders of common stock have 60% of the
general voting power. Holders of Class B Stock have the
remaining 40% of the general voting power.
Each outstanding share of common stock will be entitled to one
vote on each matter to be voted upon.
The number of votes for each share of Class B Stock is
calculated each year in accordance with the Companys
Restated Certificate of Incorporation. At this years
meeting, each outstanding share of Class B Stock will be
entitled to 31.426 votes on each matter to be voted upon.
What is the
difference between a shareholder of record and a street
name holder?
If your shares are registered directly in your name with
Computershare Trust Company, N.A., the Companys stock
transfer agent, you are considered the shareholder of record
with respect to those shares.
If your shares are held in a stock brokerage account or by a
bank or other nominee, you are considered the beneficial owner
of these shares, and your shares are held in street
name.
How do I vote
my shares?
If you are a shareholder of record, you can give a proxy to be
voted at the meeting:
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over the telephone by calling a toll-free number;
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electronically, using the Internet; or
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by mailing in a proxy card.
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The telephone and Internet voting procedures have been set up
for your convenience and have been designed to authenticate your
identity, to allow you to give voting instructions, and to
confirm that those instructions have been recorded properly. If
you are a shareholder of record and you would like to vote by
telephone or by using the Internet, please refer to the specific
instructions set forth on the enclosed proxy card. If you wish
to vote using a paper format and you return your signed proxy to
us before the annual meeting, we will vote your shares as you
direct.
If you are a Company employee or retiree participating in either
of the Companys Savings and Stock Investment Plan for
Salaried Employees or Tax-Efficient Savings Plan for Hourly
Employees, then you may be receiving this material because of
shares held for you in those plans. In that case, you may use a
proxy card to instruct the plan trustee how to vote those
shares. The trustee will vote the shares in accordance with your
instructions and the terms of the plan. If you hold shares in
any of these plans, the trustee may vote the shares held for you
even if you do not direct the trustee how to vote. In these
cases, the trustee will vote any shares for which the trustee
does not receive instructions in the same proportion as the
trustee votes the shares for which the trustee does receive
instructions.
If you hold your shares in street name, you must
vote your shares in the manner prescribed by your broker or
nominee. Your broker or nominee has enclosed, or explained how
you can access, a voting instruction card for you to use in
directing the broker or nominee how to vote your shares.
Are votes
confidential? Who counts the votes?
The votes of all shareholders will be held in confidence from
directors, officers and employees of the Company except:
(a) as necessary to meet applicable legal requirements and
to assert or defend claims for or against the Company;
(b) in case of a contested proxy solicitation; (c) if
a shareholder makes a written comment on the proxy card or
otherwise communicates his or her vote to management; or
(d) to allow the independent inspectors of
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election to certify the results of the vote. We will also
continue, as we have for many years, to retain an independent
tabulator to receive and tabulate the proxies and independent
inspectors of election to certify the results.
Can I vote my
shares in person at the annual meeting?
Yes. If you are a shareholder of record, you may vote your
shares at the meeting by completing a ballot at the meeting.
However, if you are a street name holder, you may
vote your shares in person only if you obtain a signed proxy
from your broker or nominee giving you the right to vote the
shares.
Even if you currently plan to attend the meeting, we recommend
that you also submit your proxy as described above so that your
vote will be counted if you later decide not to attend the
meeting.
What are my
choices when voting?
In the election of directors, you may vote for all nominees, or
you may vote against one or more nominees. The proposal related
to the election of directors is described in this proxy
statement beginning at p. 5.
For each of the other proposals, you may vote for the proposal,
against the proposal, or abstain from voting on the proposal.
These proposals are described in this proxy statement beginning
at p. 73.
Proposals 1, 2, and 3 will be presented at the meeting by
management, and the rest are expected to be presented by
shareholders.
What are the
Boards recommendations?
The Board of Directors recommends a vote FOR all of the
nominees for director (Proposal 1), FOR ratifying
the selection of PricewaterhouseCoopers LLP as the
Companys independent registered public accounting firm for
2010 (Proposal 2), FOR approval of the Tax Benefit
Preservation Plan (Proposal 3), and AGAINST the
shareholder proposals (Proposals 4 through 8).
What if I do
not specify how I want my shares voted?
If you do not specify on your proxy card (or when giving your
proxy by telephone or over the Internet) how you want to vote
your shares, we will vote them FOR all of the nominees
for director (Proposal 1), FOR ratifying the
selection of PricewaterhouseCoopers LLP as the Companys
independent registered public accounting firm for 2010
(Proposal 2), FOR approval of the Tax Benefit
Preservation Plan (Proposal 3), and AGAINST the
shareholder proposals (Proposals 4 through 8).
Can I change
my vote?
Yes. You can revoke your proxy at any time before it is
exercised in any of three ways:
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by submitting written notice of revocation to the Secretary of
the Company;
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by submitting another proxy by telephone, via the Internet or by
mail that is later dated and, if by mail, that is properly
signed; or
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by voting in person at the meeting.
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What
percentage of the vote is required for a proposal to be
approved?
A majority of the votes that could be cast by shareholders who
are either present in person or represented by proxy at the
meeting is required to elect the nominees for director and to
approve each proposal. The votes are computed for each share as
described on p. 2.
3
The total number of votes that could be cast at the meeting is
the number of votes actually cast plus the number of
abstentions. Abstentions are counted as shares
present at the meeting for purposes of determining whether
a quorum exists and have the effect of a vote
against any matter as to which they are specified.
Proxies submitted by brokers that do not indicate a vote for
some or all of the proposals because they dont have
discretionary voting authority and havent received
instructions as to how to vote on those proposals (so-called
broker non-votes) are not considered shares
present and will not affect the outcome of the vote.
How can I
attend the annual meeting?
If you are a shareholder of record and you plan to attend the
annual meeting, please let us know by indicating in the
appropriate place when you return your proxy. Please tear off
the top portion of your proxy card where indicated and bring it
with you to the meeting. This portion of the card will serve as
your ticket and will admit you and one guest.
If you are a street name shareholder, tell your
broker or nominee that youre planning to attend the
meeting and would like a legal proxy. Then simply
bring that form to the meeting and well give you a
ticket at the door that will admit you and one guest. If
you cant get a legal proxy in time, we can still give you
a ticket at the door if you bring a copy of your brokerage
account statement showing that you owned Ford stock as of the
record date, March 17, 2010.
Are there any
rules regarding admission?
Each shareholder and guest will be asked to present valid
government-issued picture identification, such as a
drivers license or passport, before being admitted to the
meeting. Cameras (including cell phones with built-in cameras),
recording devices, and other electronic devices will not be
permitted at the meeting and attendees will be subject to
security inspections. We encourage you to leave any such items
at home. We will not be responsible for any items checked at the
door.
Are there any
other matters to be acted upon at the annual
meeting?
We do not know of any other matters to be presented or acted
upon at the meeting. Under our By-Laws, no business besides that
stated in the meeting notice may be transacted at any meeting of
shareholders. If any other matter is presented at the meeting on
which a vote may properly be taken, the shares represented by
proxies will be voted in accordance with the judgment of the
person or persons voting those shares.
4
Election of
Directors
(Proposal 1 on the Proxy Card)
Thirteen directors will be elected at this years annual
meeting. Each director will serve until the next annual meeting
or until he or she is succeeded by another qualified director
who has been elected.
William Clay Ford, who had been a member of the Board of
Directors since 1948, retired from the Board effective
May 12, 2005. As with previous years, the Board of
Directors has again requested that Mr. Ford serve as
Director Emeritus so that the Board can continue to avail itself
of his wisdom, judgment and experience, and Mr. Ford has
agreed to so serve. Mr. Ford is entitled to attend Board
and committee meetings and participate in discussion of matters
that come before the Board or its committees, although he is not
entitled to vote upon any such matters and no longer receives
compensation as a non-employee Board member.
We will vote your shares as you specify when providing your
proxy. If you do not specify how you want your shares voted when
you provide your proxy, we will vote them for the election of
all of the nominees listed below. If unforeseen
circumstances (such as death or disability) make it necessary
for the Board of Directors to substitute another person for any
of the nominees, we will vote your shares for that other person.
Qualifications
Considered for Nominees
Because Ford is a large and complex company, the Committee
considers numerous qualifications when considering candidates
for the Board. Among the most important qualities directors
should possess are the highest personal and professional ethical
standards, integrity, and values. They should be committed to
representing the long-term interests of all of the shareholders.
Directors must also have practical wisdom and mature judgment.
Directors must be objective and inquisitive. Ford recognizes the
value of diversity and we endeavor to have a diverse Board, with
experience in business, government, education and technology,
and in areas that are relevant to the Companys global
activities. Directors must be willing to devote sufficient time
to carrying out their duties and responsibilities effectively,
and should be committed to serve on the Board for an extended
period of time. Directors should also be prepared to offer their
resignation in the event of any significant change in their
personal circumstances that could affect the discharge of their
responsibilities as directors of the Company, including a change
in their principal job responsibilities.
Each of the nominees for director is now a member of the Board
of Directors, which met fifteen times during 2009. Each of the
nominees for director attended at least 75% of the combined
Board of Director and committee meetings held during the periods
served by such nominee in 2009. The nominees provided the
following information about
5
themselves as of February 1, 2010. Additionally, for each
director-nominee we have disclosed the particular experience,
qualifications, attributes, or skills that led the Board to
conclude that the nominee should serve as a director.
Nominees
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Stephen
G. Butler
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Age: 62 Director Since: 2004
Principal Occupation: Retired Chairman and Chief Executive Officer, KPMG, LLP
Recent Business Experience: Mr. Butler served as Chairman and CEO of KPMG, LLP from 1996 until his retirement on June 30, 2002. Mr. Butler held a variety of management positions, both in the United States and internationally, during his 33-year career at KPMG.
Current Directorships: Cooper Industries, PLC; ConAgra Foods, Inc.
Reasons for Nomination: The Board believes Mr. Butlers extensive experience in the accounting profession, both in the United States and internationally, as well as his executive experience as Chairman and CEO of KPMG for several years, provides Ford with financial expertise that has been instrumental in guiding the Company through its restructuring. As Chair of the Audit Committee and its designated financial expert, Mr. Butler continues to add significant value to the goal of improving our balance sheet while fulfilling our financial reporting obligations accurately and transparently.
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Kimberly
A. Casiano
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Age: 52 Director Since: 2003
Principal Occupation: President, Kimberly Casiano & Associates Inc., San Juan, Puerto Rico
Recent Business Experience: On January 1, 2010, Ms. Casiano established Kimberly Casiano & Associates Inc., where she is President. The firm provides advisory services in marketing, communications, public affairs, advocacy, and diversity to target the U.S. Hispanic market. From 1994 until December 31, 2009, Ms. Casiano was President and Chief Operating Officer of Casiano Communications, a publishing and direct marketing company. From 1987 to 1994, she held a number of management positions within Casiano Communications in the periodicals and magazines and the bilingual direct marketing and call center divisions of the company. Ms. Casiano is a member of the Board of Directors of Mutual of America, the Board of Trustees of the Hispanic College Fund, and the Board of Advisors of the Moffitt Cancer Center.
Reasons for Nomination: The Board believes that Ms. Casianos experience as President and COO of Casiano Communications provides the Company with unique insight into marketing and sales, particularly regarding the Hispanic community. This skill is important to Fords attempt to grow our market share profitably.
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Anthony
F. Earley, Jr.
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Age: 60 Director Since: 2009
Principal Occupation: Chairman and Chief Executive Officer, DTE Energy, Detroit, Michigan
Recent Business Experience: Mr. Earley has been Chairman and Chief Executive Officer of DTE Energy since 1998. Mr. Earley joined DTE Energy in 1994 as President and Chief Operating Officer. Prior to that time, Mr. Earley served as President and Chief Operating Officer of the Long Island Lighting Company, an electric and gas utility in New York. Mr. Earley is a director of the Nuclear Energy Institute and the Edison Electric Institute. Mr. Earley also serves as a director for several charitable organizations including Cornerstone Schools, Detroit Zoological Society, Business Leaders for Michigan, and United Way for Southeastern Michigan. Mr. Earley has sat on advisory boards of the New York Stock Exchange and the University of Notre Dame. Mr. Earley also served as an officer in the United States Navy nuclear submarine program where he was qualified as a chief engineer officer. Within the past five years, Mr. Earley served on the board of Comerica, Inc.
Current Directorships: DTE Energy; Masco Corporation
Reasons for Nomination: The Board believes that, as Ford continues to develop hybrid and electric vehicles, Mr. Earleys experience as Chairman and CEO of DTE Energy, his leadership positions in the electric and nuclear industries, and his qualifications as a U.S. Navy officer, provide Ford with a uniquely qualified individual who can assist in the development of vehicles our customers want and value. In addition, Mr. Earley is able to provide valuable advice regarding the development of the electrical infrastructure needed to assist in the widespread acceptance of electric vehicles. As CEO of DTE Energy, Mr. Earley also possesses significant leadership and general management expertise.
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Edsel
B. Ford II
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Age: 61 Director Since: 1988
Principal Occupation: Director and Consultant, Ford Motor Company
Recent Business Experience: Mr. Ford is a retired Vice President of Ford Motor Company and former President and Chief Operating Officer of Ford Motor Credit Company. He presently serves as a consultant to the Company.
Current Directorships: International Speedway Corporation
Reasons for Nomination: The Board believes that Mr. Fords experience as President and COO of Ford Motor Credit Company, as well as his role as consultant to the Company, brings a deep knowledge of Fords business to Board deliberations. Mr. Ford also adds significant value in various stakeholder relationships, including relationships with dealers, non-government organizations, employees, and the communities in which Ford has a significant presence. Mr. Fords life-long affiliation with the Company provides the Board with a unique historical perspective and a focus on the long-term interests of the Company.
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William
Clay Ford, Jr.
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Age: 52 Director Since: 1988
Principal Occupation: Executive Chairman and Chairman of the Board of Directors, Ford Motor Company
Recent Business Experience: Mr. Ford has held a number of management positions within Ford, including Vice President Commercial Truck Vehicle Center. From 1995 until October 30, 2001, Mr. Ford was Chair of the Finance Committee. Effective January 1, 1999, he was elected Chairman of the Board of Directors and effective October 30, 2001, he was elected Chief Executive Officer of the Company. Mr. Ford became Executive Chairman of the Company on September 1, 2006 and is the current Chair of the Finance Committee. Mr. Ford also is Vice Chairman of The Detroit Lions, Inc., Chairman of the Detroit Economic Club, and Trustee of The Henry Ford. He also is a Vice Chairman of Business Leaders for Michigan.
Current Directorships: eBay Inc.
Reasons for Nomination: The Board believes that Mr. Fords extensive experience in various executive positions, service as CEO, and present service as Executive Chairman, provides the Board with unique insight regarding Company-wide issues. This experience, as well as in his role as Chairman of the Board, assist the Board in developing its long-term strategy, while his life-long affiliation with the Company reinforces the long-term interests of Ford and it shareholders. Mr. Fords knowledge and experience also add significant value to the Companys relationship with its various stakeholders.
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Richard
A. Gephardt
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Age: 69 Director Since: 2009
Principal Occupation: President and Chief Executive Officer, Gephardt Group, Atlanta, Georgia
Recent Business Experience: Mr. Gephardt has been President and Chief Executive Officer since 2005 of Gephardt Group, LLC, a multi-disciplined consulting firm. He also serves as Strategic Advisor since June 2005 for the Government Affairs practice group of DLA Piper, one of the worlds largest legal services providers, and as a consultant to Goldman, Sachs & Co. since January 2005. Mr. Gephardt is the former Majority Leader of the U.S. House of Representatives and served 14 terms in Congress from 1976 until January 2005. He is also a member of the Professional Advisory Board of St. Jude Childrens Research Hospital. Within the past five years, Mr. Gephardt served on the board of Dana Holding Corporation.
Current Directorships: Centene Corporation; CenturyLink; Spirit Aerosystems Holding, Incorporated; United States Steel Corporation
Reasons for Nomination: The Board believes that Mr. Gephardts distinguished career in public service provides the Board with important insight into the many government relations and international issues affecting Ford. Additionally, Mr. Gephardts experience in business consulting provides Ford with unique knowledge of business challenges across a broad spectrum of industries.
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8
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Irvine
O. Hockaday, Jr.
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Age: 73 Director Since: 1987
Principal Occupation: Retired President and Chief Executive Officer, Hallmark Cards, Inc., Kansas City, Missouri
Recent Business Experience: Mr. Hockaday was President and CEO of Hallmark Cards, Inc. since January 1, 1986, and a director since 1978. He retired in December 2001. Within the past five years, Mr. Hockaday served on the following Boards: Aquila, Inc.; Dow Jones & Company; Sprint Corp.
Current Directorships: Crown Media Holdings, Inc.; The Estee Lauder Companies, Inc.
Reasons for Nomination: The Board believes that Mr. Hockadays experience as President and CEO of Hallmark Cards provides Ford with marketing and general management expertise. Mr. Hockadays management of the Hallmark brand provides the Board with expertise in effective marketing strategies as Ford continues to implement its objective of growing market share profitably.
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Richard
A. Manoogian
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Age: 73 Director Since: 2001
Principal Occupation: Chairman of the Board, Masco Corporation, Taylor, Michigan
Recent Business Experience: Mr. Manoogian has been with Masco since 1958, became Vice President and a member of the Board in 1964, President in 1968 and Chairman in 1985. Mr. Manoogian served as Chief Executive Officer of Masco from 1985 until he transitioned to Executive Chairman in July 2007. Effective June 30, 2009, Mr. Manoogian retired from the position of Executive Chairman of Masco. Mr. Manoogian is a member of the Board of Business Leaders for Michigan, The Henry Ford, and the Detroit Economic Club. Within the past five years, Mr. Manoogian served on the following Boards: Metaldyne Corporation; JPMorgan Chase & Co.
Current Directorships: Masco Corporation
Reasons for Nomination: The Board believes that Mr. Manoogians experience as Chairman and CEO of Masco provides the Board with overall general management expertise as well as experience in the successful development of multiple brands. Additionally, as an experienced CEO of a S&P 500 company, Mr. Manoogian brings a wealth of knowledge on executive compensation matters to his position as Chair of the Compensation Committee.
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9
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Ellen
R. Marram
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Age: 62 Director Since: 1988
Principal Occupation: President, The Barnegat Group, LLC
Recent Business Experience: Ms. Marram is President of the Barnegat Group, LLC, a business advisory firm. From September 2000 through December 2005, Ms. Marram was Managing Director of North Castle Partners, LLC, a private equity firm. Ms. Marram served as President and CEO of efdex inc. from August 1999 to May 2000. (efdex, a privately-held start-up Internet-based commodities exchange, never became fully operational and in September 2000 commenced liquidation in the U.K. due to its insolvency.) She previously served as President and CEO of Tropicana Beverage Group from September 1997 until November 1998, and had previously served as President of the Group, as well as Executive Vice President of The Seagram Company Ltd. and Joseph E. Seagram & Sons, Inc. Before joining Seagram in 1993, she served as President and CEO of Nabisco Biscuit Company and Senior Vice President of the Nabisco Foods Group from June 1988 until April 1993. Within the past five years, Ms. Marram served on the board of Cadbury Schweppes plc.
Current Directorships: The New York Times Company; Eli Lilly and Company
Reasons for Nomination: The Board believes that Ms. Marrams general management and marketing experience in managing well-known consumer brands adds significant expertise to Fords focus on strengthening our core brands. Additionally, Ms. Marrams experience in advising companies provides her with multiple perspectives on successful strategies across a variety of businesses. Ms. Marram also brings a keen understanding of corporate governance matters to her position as Chair of the Nominating and Governance Committee.
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Alan
Mulally
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Age: 64 Director Since: 2006
Principal Occupation: President and Chief Executive Officer, Ford Motor Company
Recent Business Experience: Mr. Mulally was elected President and Chief Executive Officer of Ford effective September 1, 2006. Since March 2001, Mr. Mulally had been Executive Vice President of the Boeing Company and President and Chief Executive Officer of Boeing Commercial Airplanes. He also was a member of the Boeing Executive Council. Prior to that time, Mr. Mulally served as President and Chief Executive Officer of Boeings space and defense businesses. Mr. Mulally has served as co-chair of the Washington Competitive Council, and has sat on the advisory boards of NASA, the University of Washington, the University of Kansas, the Massachusetts Institute of Technology, and the U.S. Air Force Scientific Advisory Board. He is a member of the U.S. National Academy of Engineering and a fellow of Englands Royal Academy of Engineering.
Reasons for Nomination: As Fords President and CEO, the Board believes that Mr. Mulally continues to provide the strategic and management leadership necessary to guide Ford through its turnaround and create an exciting viable Ford delivering profitable growth for all. Mr. Mulallys experience at Boeing after September 11, 2001, evidenced his expertise in managing a company in the midst of a crisis by focusing its management on important business priorities. Mr. Mulally continues to use these skills to lead Ford in executing our ONE Ford Plan.
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Homer
A. Neal
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Age: 67 Director Since: 1997
Principal Occupation: Director, ATLAS Project, Professor of Physics, Interim President Emeritus, and Vice President for Research Emeritus, University of Michigan, Ann Arbor, Michigan
Recent Business Experience: Dr. Neal is director, University of Michigan ATLAS Project, Samuel A. Goudsmit Distinguished Professor of Physics, Interim President Emeritus and Vice President for Research Emeritus at the University of Michigan. He joined the University as Chairman of its Physics Department in 1987 and in 1993 was named Vice President of Research. Dr. Neal served as Interim President of the University of Michigan from July 1, 1996 to February 1, 1997. He has served as a member of the U.S. National Science Board, the Advisory Board of the Oak Ridge National Laboratory, as a Trustee of the Center for Strategic and International Studies and as a member of the Board of Regents of the Smithsonian Institution. Dr. Neal currently is a member of the Board of Trustees of the Richard Lounsbery Foundation and a member of the Advisory Board for the Lawrence Berkeley National Laboratory. He is also a member of the Board of Physics and Astronomy of the National Academy of Sciences and a member of the Council of the Smithsonian National Museum of African American History and Culture.
Reasons for Nomination: The Board believes that Dr. Neals vast experience and knowledge in the field of science brings a unique skill to the Board. Dr. Neals expertise has assisted our intellectual property management process through his presence on the Ford Board of Directors and on the board of managers of Ford Global Technologies, LLC. Additionally, as Chair of the Sustainability Committee, he continues to apply his unique scientific knowledge to the development and implementation of Fords long-term sustainability strategy.
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Gerald
L. Shaheen
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Age: 65 Director Since: 2007
Principal Occupation: Retired Group President, Caterpillar, Inc., Peoria, Illinois
Recent Business Experience: Mr. Shaheen was appointed Group President of Caterpillar in November 1998 and had responsibility for the design, development and production of the companys large construction and mining equipment, as well as marketing and sales operations in North America, Caterpillars components business, and its research and development division. Mr. Shaheen joined Caterpillar in 1967 and held a variety of management positions. Mr. Shaheen retired from Caterpillar effective February 1, 2008. Mr. Shaheen is a board member and past chairman of the U.S. Chamber of Commerce, a board member of the National Chamber Foundation, and Chairman of the Board of Trustees of Bradley University. Within the past five years, Mr. Shaheen served on the board of National City Corporation
Current Directorships: AGCO Corporation
Reasons for Nomination: The Board believes that Mr. Shaheens extensive experience as a Group President at Caterpillar adds a depth of manufacturing and general management knowledge that is beneficial for an automobile manufacturer. His knowledge of marketing and sales, as well as experience in research and development, of manufacturing and selling products in a capital and labor intensive industry, provides valuable insight into Fords efforts to build products our customers want and value.
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John
L. Thornton
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Age: 56 Director Since: 1996
Principal Occupation: Professor and Director, Global Leadership Program, Tsinghua University, Beijing, China
Recent Business Experience: Mr. Thornton retired as President and Co-Chief Operating Officer of The Goldman Sachs Group, Inc. on June 30, 2003. Mr. Thornton was appointed to that post in 1999 and formerly served as Chairman of Goldman Sachs Asia from 1996 to 1998. He was previously Co-Chief Executive of Goldman Sachs International, the firms business in Europe, the Middle East, and Africa. Mr. Thornton was elected non-executive chairman of HSBC North America Holdings, Inc. in December 2008. He also is the Chairman of the Board of Trustees of the Brookings Institution. Within the past five years, Mr. Thornton served on the following Boards: China Netcom Group Corp.; Industrial Commercial Bank of China Limited.
Current Directorships: News Corporation; Intel, Inc.; China Unicom Limited; HSBC Holdings, plc; HSBC North America Holdings Inc.
Reasons for Nomination: The Board believes that Mr. Thorntons extensive experience in corporate finance matters is critical to achieving the ONE Ford goal of financing our plan and improving our balance sheet. Also, Mr. Thorntons extensive knowledge of China brings to the Board valuable insight into what has become one of the worlds most important automotive growth markets.
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Committees of the
Board of Directors
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Audit
Committee
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Number of Members: 4 Members: Stephen G. Butler (Chair) Kimberly A. Casiano Irvine O. Hockaday, Jr. Gerald L. Shaheen
Number of Meetings in 2009: 12
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Functions: Selects the independent registered public accounting firm to audit Fords books and records, subject to shareholder ratification, and determines the compensation of the independent registered public accounting firm.
At least annually, reviews a report by the independent registered public accounting firm describing: internal quality control procedures, any issues raised by an internal or peer quality control review, any issues raised by a governmental or professional authority investigation in the past five years and any steps taken to deal with such issues, and (to assess the independence of the independent registered public accounting firm) all relationships between the independent registered public accounting firm and the Company.
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Consults with the independent registered public accounting firm,
reviews and approves the scope of their audit, and reviews their
independence and performance. Also, annually approves of
categories of services to be performed by the independent
registered public accounting firm and reviews and, if
appropriate, approves in advance any new proposed engagement
greater than $250,000.
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Reviews internal controls, accounting practices, and financial
reporting, including the results of the annual audit and the
review of the interim financial statements with management and
the independent registered public accounting firm.
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Reviews activities, organization structure, and qualifications
of the General Auditors Office, and participates in the
appointment, dismissal, evaluation, and the determination of the
compensation of the General Auditor.
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Discusses earnings releases and guidance provided to the public
and rating agencies.
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Reviews, with the Office of the General Counsel, any legal or
regulatory matter that could have a significant impact on the
financial statements.
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As appropriate, obtains advice and assistance from outside
legal, accounting or other advisors.
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Prepares an annual report of the Audit Committee to be included
in the Companys proxy statement.
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Assesses annually the adequacy of the Audit Committee Charter.
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Reports to the Board of Directors about these matters.
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Compensation
Committee
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Number of Members: 4 Members: Richard A. Manoogian (Chair) Anthony F. Earley, Jr. Ellen R. Marram John L. Thornton
Number of Meetings in 2009: 9
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Functions: Establishes and reviews the overall executive compensation philosophy and strategy of the Company.
Reviews and approves Company goals and objectives relevant to the Executive Chairman and the President and CEO and other executive officer compensation, including annual performance objectives.
Evaluates the performance of the Executive Chairman and the President and CEO and other executive officers in light of established goals and objectives and, based on such evaluation, reviews and approves the annual salary, bonus, stock options, other incentive awards and other benefits, direct and indirect, of the Executive Chairman and the President and CEO and other executive officers.
Considers and makes recommendations on Fords executive compensation plans and programs.
Reviews the Compensation Discussion and Analysis to be included in the Companys proxy statement.
Prepares an annual report of the Compensation Committee to be included in the Companys proxy statement.
Assesses annually the adequacy of the Compensation Committee Charter. Reports to the Board of Directors about these matters.
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Finance
Committee
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Number of Members: 5 Members: William Clay Ford, Jr. (Chair) Edsel B. Ford II Alan Mulally Homer A. Neal John L. Thornton
Number of Meetings in 2009: 3
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Functions: Reviews all aspects of the Companys policies and practices that relate to the management of the Companys financial affairs, not inconsistent, however, with law or with specific instructions given by the Board of Directors relating to such matters.
Reviews with management, at least annually, the Annual Report from the Treasurer of the Companys cash and funding plans and other Treasury matters, the Companys health care costs and plans for funding such costs, and the Companys policies with respect to financial risk assessment and financial risk management.
Reviews the Companys cash strategy.
Reviews the strategy and performance of the Companys pension and other retirement and savings plans. Performs such other functions and exercises such other powers as may be delegated to it by the Board of Directors from time to time.
Assesses annually the adequacy of the Finance Committee Charter.
Reports to the Board of Directors about these matters.
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Nominating
and Governance Committee
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Number of Members: 10 Members: Ellen R. Marram (Chair) Stephen G. Butler Kimberly A. Casiano Anthony F. Earley, Jr. Richard A. Gephardt Irvine O. Hockaday, Jr. Richard A. Manoogian Homer A. Neal Gerald L. Shaheen John L. Thornton
Number of Meetings in 2009: 6
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Functions: Makes recommendations on: the nominations or elections of directors; and
the size, composition, and compensation of the Board.
Establishes criteria for selecting new directors and the evaluation of the Board. Develops and recommends to the Board corporate governance principles and guidelines. Reviews the charter and composition of each committee of the Board and makes recommendations to the Board for the adoption of or revisions to the committee charters, the creation of additional committees, or the elimination of committees.
Considers the adequacy of the By-Laws and the Restated Certificate of Incorporation of the Company and recommends to the Board, as appropriate, that the Board: (i) adopt amendments to the By-Laws, and (ii) propose, for consideration by the shareholders, amendments to the Restated Certificate of Incorporation.
Considers shareholder suggestions for nominees for director (other than self-nominations). See Corporate Governance on p. 18.
Assesses annually the adequacy of the Nominating and Governance Committee Charter.
Reports to the Board of Directors about these matters.
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Sustainability
Committee
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Number of Members: 7
Members: Homer A. Neal (Chair) Kimberly A. Casiano Anthony F. Earley, Jr. Edsel B. Ford II William Clay Ford, Jr. Richard A. Gephardt Ellen R. Marram
Number of Meetings in 2009: 3
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Functions: Reviews environmental, public policy, and corporate citizenship issues facing the Company around the world.
Reviews annually with management the Companys performance for the immediately preceding year regarding stakeholder relationships, product performance, sustainability, and public policy.
Reviews with management the Companys annual Sustainability Report.
Assesses annually the adequacy of the Sustainability Committee Charter.
Reports to the Board of Directors about these matters.
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15
Audit Committee
Report
The Audit Committee is composed of four directors, all of whom
meet the independence standards contained in the NYSE Listed
Company rules, SEC rules and Fords Corporate Governance
Principles, and operates under a written charter adopted by the
Board of Directors. A copy of the Audit Committee Charter may be
found on the Companys website, www.ford.com. The
Audit Committee selects, subject to shareholder ratification,
the Companys independent registered public accounting firm.
Ford management is responsible for the Companys internal
controls and the financial reporting process. The independent
registered public accounting firm, PricewaterhouseCoopers LLP
(PricewaterhouseCoopers), is responsible for
performing independent audits of the Companys consolidated
financial statements and internal control over financial
reporting and issuing an opinion on the conformity of those
audited financial statements with United States generally
accepted accounting principles and on the effectiveness of the
Companys internal control over financial reporting. The
Audit Committee monitors the Companys financial reporting
process and reports to the Board of Directors on its findings.
Audit
Fees
PricewaterhouseCoopers served as the Companys independent
registered public accounting firm in 2009 and 2008. The Company
paid PricewaterhouseCoopers $42.7 million and
$43.7 million for audit services for the years ended
December 31, 2009 and 2008, respectively. Audit services
consisted of the audit of the financial statements included in
the Companys Annual Report on
Form 10-K,
reviews of the financial statements included in the
Companys Quarterly Reports on
Form 10-Q,
attestation of the effectiveness of the Companys internal
controls over financial reporting, preparation of statutory
audit reports, and providing comfort letters in connection with
Ford and Ford Motor Credit Company funding transactions.
Audit-Related
Fees
The Company paid PricewaterhouseCoopers $4.4 million and
$7.7 million for audit-related services for the years ended
December 31, 2009 and 2008, respectively. Audit-related
services included support of funding transactions, due diligence
for mergers, acquisitions and divestitures, employee benefit
plan audits, attestation services, internal control reviews, and
assistance with interpretation of accounting standards.
Tax
Fees
The Company paid PricewaterhouseCoopers $4.1 million and
$5.7 million for tax services for the years ended
December 31, 2009 and 2008, respectively. The types of tax
services provided included assistance with tax compliance and
the preparation of tax returns, tax consultation, planning and
implementation services, assistance in connection with tax
audits, tax advice related to mergers, acquisitions and
divestitures, and tax return preparation services provided to
international service employees (ISEs) to minimize
the cost to the Company of these assignments. In 2005, the
Company began the transition to a new service provider for tax
return preparation services to ISEs. Of the fees paid for tax
services, the Company paid 59% and 57% for tax compliance and
the preparation of Company tax returns in 2009 and 2008,
respectively.
All Other
Fees
The Company did not engage PricewaterhouseCoopers for any other
services for the years ended December 31, 2009 and 2008.
16
Total
Fees
The Company paid PricewaterhouseCoopers a total of $51.2 and
$57.1 million in fees for the years ended December 31,
2009 and 2008, respectively.
Auditor
Independence
During the last year, the Audit Committee met and held
discussions with management and PricewaterhouseCoopers. The
Audit Committee reviewed and discussed with Ford management and
PricewaterhouseCoopers the audited financial statements and the
assessment of the effectiveness of internal controls over
financial reporting, contained in the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2009. The Audit Committee
also discussed with PricewaterhouseCoopers the matters required
to be discussed by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent registered
public accounting firms communications with the Audit
Committee concerning independence, as well as by SEC regulations.
PricewaterhouseCoopers submitted to the Audit Committee the
written disclosures and the letter required by applicable
requirements of the Public Company Accounting Oversight Board
regarding the independent registered public accounting
firms communications with the audit committee concerning
independence. The Audit Committee discussed with
PricewaterhouseCoopers such firms independence.
Based on the reviews and discussions referred to above, the
Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Companys
Annual Report on
Form 10-K
for the year ended December 31, 2009, filed with the SEC.
The Audit Committee also considered whether the provision of
other non-audit services by PricewaterhouseCoopers to the
Company is compatible with maintaining the independence of
PricewaterhouseCoopers and concluded that the independence of
PricewaterhouseCoopers is not compromised by the provision of
such services.
Annually, the Audit Committee pre-approves categories of
services to be performed (rather than individual engagements) by
PricewaterhouseCoopers. As part of this approval, an amount is
established for each category of services (Audit, Audit-Related,
and Tax Services). In the event the pre-approved amounts prove
to be insufficient, a request for incremental funding will be
submitted to the Audit Committee for approval during the next
regularly scheduled meeting. In addition, all new engagements
greater than $250,000 will be presented in advance to the Audit
Committee for approval. A regular report is prepared for each
regular Audit Committee meeting outlining actual fees and
expenses paid or committed against approved fees.
Audit Committee
Stephen G. Butler (Chair)
Kimberly A. Casiano
Irvine O. Hockaday, Jr.
Gerald L. Shaheen
17
Corporate
Governance
Ford has operated under sound corporate governance practices for
many years. We believe it is important to disclose to you a
summary of our major corporate governance practices. Some of
these practices have been in place for many years. Others have
been adopted in response to regulatory and legislative changes.
We will continue to assess and refine our corporate governance
practices and share them with you.
Nominating and
Governance Committee
The Nominating and Governance Committee is composed of ten
directors, all of whom are considered independent under the NYSE
Listed Company rules and Fords Corporate Governance
Principles. The Committee operates under a written charter
adopted by the Board of Directors. A copy of the charter may be
found on Fords website at www.ford.com.
Composition of
Board of Directors/Nominees
The Nominating and Governance Committee recommends to the Board
the nominees for all directorships to be filled by the Board or
by you. The Committee also reviews and makes recommendations to
the Board on matters such as the size and composition of the
Board in order to ensure the Board has the requisite expertise
and its membership consists of persons with sufficiently diverse
and independent backgrounds. Between annual shareholder
meetings, the Board may elect directors to vacant Board
positions to serve until the next annual meeting.
The Board proposes to you a slate of nominees for election to
the Board at the annual meeting. You may propose nominees (other
than self-nominations) for consideration by the Committee by
submitting the names, qualifications and other supporting
information to: Secretary, Ford Motor Company, One American
Road, Dearborn, MI 48126. Properly submitted recommendations
must be received no later than December 2, 2010 to be
considered by the Committee for inclusion in the following
years nominations for election to the Board. Your properly
submitted candidates are evaluated in the same manner as those
candidates recommended by other sources. All candidates are
considered in light of the needs of the Board with due
consideration given to the qualifications described on p. 5
under Election of Directors.
Identification of
Directors
The Charter of the Nominating and Governance Committee provides
that the Committee conducts all necessary and appropriate
inquiries into the backgrounds and qualifications of possible
candidates as directors. It has the sole authority to retain and
terminate any search firm to be used to assist it in identifying
and evaluating candidates to serve as directors of the Company.
The Committee identifies candidates through a variety of means,
including search firms, recommendations from members of the
Committee and the Board, including the Executive Chairman and
the President and CEO, and suggestions from Company management.
The Company on behalf of the Committee has paid fees to
third-party firms to assist the Committee in the identification
and evaluation of potential Board members.
Director
Independence
A majority of the directors must be independent directors under
the NYSE Listed Company rules. The NYSE rules provide that no
director can qualify as independent unless the Board
affirmatively determines that the director has no material
relationship with the listed company. The Board has adopted the
following standards in determining whether or not a director has
a material relationship with the Company and these standards are
contained in Fords Corporate Governance Principles and may
be found at the Companys website, www.ford.com.
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No director who is an employee or a former employee of the
Company can be independent until three years after termination
of such employment.
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No director who is, or in the past three years has been,
affiliated with or employed by the Companys present or
former independent auditor can be independent until three years
after the end of the affiliation, employment or auditing
relationship.
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No director can be independent if he or she is, or in the past
three years has been, part of an interlocking directorship in
which an executive officer of the Company serves on the
compensation committee of another company that employs the
director.
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No director can be independent if he or she is receiving, or in
the last three years has received, more than $100,000 during any
12-month
period in direct compensation from the Company, other than
director and committee fees and pension or other forms of
deferred compensation for prior service (provided such
compensation is not contingent in any way on continued service).
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Directors with immediate family members in the foregoing
categories are subject to the same three-year restriction.
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The following commercial, charitable and educational
relationships will not be considered to be material
relationships that would impair a directors independence:
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(i)
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if within the preceding three years a Ford director was an
executive officer or employee of another company (or an
immediate family member of the director was an executive officer
of such company) that did business with Ford and either:
(a) the annual sales to Ford were less than the greater of
$1 million or two percent of the total annual revenues of
such company, or (b) the annual purchases from Ford were
less than the greater of $1 million or two percent of the
total annual revenues of Ford, in each case for any of the three
most recently completed fiscal years;
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(ii)
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if within the preceding three years a Ford director was an
executive officer of another company which was indebted to Ford,
or to which Ford was indebted, and either: (a) the total
amount of such other companys indebtedness to Ford was
less than two percent of the total consolidated assets of Ford,
or (b) the total amount of Fords indebtedness to such
other company was less than two percent of the total
consolidated assets of such other company, in each case for any
of the three most recently completed fiscal years; and
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(iii)
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if within the preceding three years a Ford director served as an
executive officer, director or trustee of a charitable or
educational organization, and Fords discretionary
contributions to the organization were less than the greater of
$1 million or two percent of that organizations total
annual discretionary receipts for any of the three most recently
completed fiscal years. (Any matching of charitable
contributions will not be included in the amount of Fords
contributions for this purpose.)
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Based on these independence standards and all of the relevant
facts and circumstances, the Board determined that none of the
following directors had any material relationship with the
Company and, thus, are independent: Stephen G. Butler,
Kimberly A. Casiano, Anthony F. Earley, Jr., Richard A.
Gephardt, Irvine O. Hockaday, Jr., Richard A. Manoogian,
Ellen R. Marram, Homer A. Neal, Gerald L. Shaheen, and John L.
Thornton.
Disclosure of
Relevant Facts and Circumstances
With respect to the independent directors listed above, the
Board considered the following relevant facts and circumstances
in making the independence determinations:
From time to time during the past three years, Ford purchased
goods and services from, or financing arrangements were provided
by, various companies with which certain directors were or are
affiliated either as members of such companies boards of
directors or, in the case of Ms. Casiano and
Mr. Earley, as officers. In addition to Ms. Casiano
and Mr. Earley, these directors included Mr. Gephardt,
Mr. Hockaday, Mr. Manoogian, Ms. Marram, and
Mr. Shaheen. The Company also made donations to certain
institutions with which certain directors are affiliated. These
included Dr. Neal and Ms. Casiano. Additionally,
companies with which Mr. Manoogian and Mr. Earley are
affiliated purchased
19
products from Ford. None of the relationships described above
were material under the independence standards contained in our
Corporate Governance Principles.
In addition, Richard A. Manoogian is a member of the Board of
Trustees of The Henry Ford, Mr. Earley is a member of the
board of United Way for Southeastern Michigan, and both
Messrs. Manoogian and Earley are members of the Board of
Directors of Business Leaders for Michigan, formerly known as
Detroit Renaissance. The Company and its affiliates contributed
to The Henry Ford and the United Way for Southeastern Michigan
amounts that exceeded the greater of $1 million or two
percent of those entities total annual discretionary
receipts during its three most recently completed fiscal years.
It was further noted that in February 2008, Ford, with the
approval of the Board, decided to invest up to $10 million
over the next two to four years in the Business Leaders for
Michigans Venture Capital Fund I. Other large
companies in Southeastern Michigan have also made monetary
commitments to the fund in order to support local venture
capital firms in Southeast Michigan. Pursuant to the
Companys Corporate Governance Principles, the independent
directors listed above (excluding Mr. Earley and
Mr. Manoogian), considering all of the relevant facts and
circumstances, determined that the Companys contributions
to The Henry Ford, the United Way for Southeastern Michigan, and
Business Leaders for Michigan and the presence of
Mr. Earley and Mr. Manoogian on those Boards did not
constitute a material relationship between Ford and
Messrs. Earley and Manoogian. Consequently, these
independent directors determined Messrs. Earley and
Manoogian to be independent. With respect to The Henry Ford, the
directors gave due consideration to the composition of the Board
of Trustees of The Henry Ford, which includes Edsel B. Ford II,
William Clay Ford and William Clay Ford, Jr., and the
Companys history of support for The Henry Ford, which
predated Mr. Manoogians service. Likewise, with
respect to the United Way for Southeastern Michigan and
Business Leaders for Michigan, the directors gave due
consideration to the composition of the Board of Directors of
Business Leaders for Michigan, which includes William Clay
Ford, Jr., and Mr. James Vella, President of the Ford
Fund, as well as those entities mission to promote the
welfare and economic development of Michigan, and the
Companys history of contributions to those organizations
and to the development of Michigan. In each case, the directors
determined that the Company was not unduly influenced to make
contributions to The Henry Ford, the United Way for Southeastern
Michigan, or Business Leaders for Michigan because of
Mr. Earleys or Mr. Manoogians presence on
those boards, nor was Mr. Earley or Mr. Manoogian
unduly influenced by the contributions made by the Company to
those organizations.
Corporate
Governance Principles
The Nominating and Governance Committee developed and
recommended to the Board a set of corporate governance
principles, which the Board adopted. Fords Corporate
Governance Principles may be found on its website at
www.ford.com. These principles include: a limitation on
the number of boards on which a director may serve,
qualifications for directors (including a director retirement
age and a requirement that directors be prepared to resign from
the Board in the event of any significant change in their
personal circumstances that could affect the discharge of their
responsibilities), director orientation, continuing education
and a requirement that the Board and each of its Committees
perform an annual self-evaluation. Although
Messrs. Hockaday and Manoogian have reached the normal
retirement age of 72 years, the Board has waived the
retirement age for them as permitted under our Corporate
Governance Principles. Shareholders may obtain a printed copy of
the Companys Corporate Governance Principles by writing to
our Shareholder Relations Department, Ford Motor Company, One
American Road, Suite 1026, Dearborn, Michigan
48126-2798.
Leadership
Structure
The Board of Directors has chosen to separate the roles of CEO
and Chairman of the Board of Directors. Alan Mulally is our
President and CEO and William Clay Ford, Jr., is Chairman
of the Board of Directors as well as our Executive Chairman. We
believe this structure is optimal for Ford because it allows
Mr. Mulally to focus on the
day-to-day
operation of the business, in particular the implementation of
our ONE Ford Plan, while allowing Mr. Ford to focus on
leadership of the Board of Directors in addition to providing
the Company with direction on
20
Company-wide issues such as sustainability and stakeholder
relationships. Furthermore, the Board has appointed Irvine O.
Hockaday, Jr., as our Presiding Independent Director. We
believe this to be an important governance practice given that
the Chairman of the Board, Mr. Ford, is not an independent
director under our Corporate Governance Principles.
Mr. Hockaday chairs the executive sessions of our
independent directors and works with Mr. Ford and
Mr. Mulally to ensure management is adequately addressing
the matters identified by the Board. This structure optimizes
the roles of CEO, Chairman, and Presiding Independent Director
and provides Ford with sound corporate governance practices in
the management of its business.
Boards Role
in Risk Management
The Board of Directors of the Company has overall responsibility
for the oversight of risk management at Ford. Day to day risk
management is the responsibility of management, which has
implemented Enterprise Risk Management processes to identify,
manage and monitor risks that face the Company.
The oversight responsibility of the Board and its Committees is
supported by Company management and the risk management
processes that are currently in place. Ford has extensive and
effective risk management processes, relating specifically to
compliance, reporting, operating and strategic risks. Compliance
risk encompasses matters such as legal and regulatory compliance
(e.g., Foreign Corrupt Practices Act, environmental,
OSHA/safety, etc.). Reporting risk covers Sarbanes-Oxley
compliance, disclosure controls and procedures, and accounting
compliance. Operating risk addresses the myriad of matters
related to the operation of a complex company such as Ford
(e.g., quality, supply chain, sales and service, financing and
liquidity, product development and engineering, labor, etc.).
Strategic risk encompasses somewhat broader and longer-term
matters, including, but not limited to, technology development,
sustainability, capital allocation, management development,
retention and compensation, competitive developments and
geopolitical developments.
We believe that key success factors in the risk management at
Ford include strong Board and senior management commitment,
effective top-down and
bottom-up
communication (including communication between management and
the Board and Committees), and active cross-functional
participation among the Business Groups and Functional Skill
Teams. More specifically, our Chief Executive Officer, Alan
Mulally, has institutionalized a Business Plan Review and
Special Attention Review process where, on a weekly basis (and
more often where circumstances dictate), the senior leadership
of the Company from each of the Business Groups and the
Functional Skill Teams, reviews the status of the business, the
risks presented to the business, (once again in the areas of
compliance, reporting, operating and strategic risks), and
develops specific plans to address those risks.
As noted above, the full Board of Directors has overall
responsibility for the oversight of risk management at Ford and
the Board of Directors itself oversees operating risk
management, with reviews at each of its regular Board meetings.
The Board of Directors has delegated responsibility for the
oversight of specific areas of risk management to certain
Committees of the Board, with each Board Committee reporting to
the full Board following each Committee meeting. The Audit
Committee assists the Board of Directors in overseeing
compliance and reporting risk. The Board, the Sustainability
Committee, the Compensation Committee and the Finance Committee
all play a role in overseeing strategic risk management.
Risk Assessment
Regarding Compensation Policies and Practices
We recently conducted an assessment of our compensation policies
and practices, including our executive compensation programs, to
evaluate the potential risks associated with these policies and
practices. We reviewed and discussed the findings of the
assessment with the Compensation Committee and concluded that
our compensation programs are designed with an appropriate
balance of risk and reward in relation to our ONE Ford Plan and
do not encourage excessive or unnecessary risk-taking behavior.
As a result, we do not believe that risks relating to our
compensation policies and practices for our employees are
reasonably likely to have a material adverse effect on the
Company.
21
In conducting this review, we considered the following
attributes of our programs:
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Mix of base salary, annual bonus opportunities, and long-term
equity compensation, with performance-based equity compensation
opportunities for officers;
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Balance between annual and longer-term performance opportunities;
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Capped payout levels for both annual bonuses and
performance-based stock awards for Named Executives
the Committee has negative discretion over incentive program
payouts;
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Alignment of annual and long-term incentives to ensure that the
awards encourage consistent behaviors and achievable performance
results;
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Inclusion of non-financial metrics, such as quality and market
share metrics, and other quantitative and qualitative
performance factors in determining actual compensation payouts;
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Use of
10-year
stock options and equity awards that vest over time;
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Generally providing senior executives with long-term
equity-based compensation on an annual basis. We believe that
accumulating equity over a period of time encourages executives
to take actions that promote the long-term sustainability of our
business; and
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Stock ownership guidelines that are reasonable and align the
interests of the executive officers with those of our
shareholders. This discourages executive officers from focusing
on short-term results without regard for longer-term
consequences.
|
Our Compensation Committee considered compensation risk
implications during its deliberations on the design of our 2010
executive compensation programs with the goal of appropriately
balancing short-term incentives and long-term performance.
Policy and
Procedure for Review and Approval of Related Party
Transactions
Business transactions between Ford and its officers or
directors, including companies in which a director or officer
(or an immediate family member) has a substantial ownership
interest or a company where such director or officer (or an
immediate family member) serves as an executive officer
(related party transactions), are not prohibited. In
fact, certain related party transactions can be beneficial to
the Company and its shareholders.
It is important, however, to ensure that any related party
transactions are beneficial to the Company. Accordingly, any
related party transaction, regardless of amount, is submitted to
the Nominating and Governance Committee in advance for review
and approval. All existing related party transactions are
reviewed at least annually by the Nominating and Governance
Committee. The Office of the General Counsel reviews all such
related party transactions, existing or proposed, prior to
submission to the Nominating and Governance Committee, and our
General Counsel opines on the appropriateness of each related
party transaction. The Nominating and Governance Committee may,
at its discretion, consult with outside legal counsel.
Any director or officer with an interest in a related party
transaction is expected to recuse himself or herself from any
consideration of the matter.
The Nominating and Governance Committees approval of a
related party transaction may encompass a series of subsequent
transactions contemplated by the original approval, i.e.,
transactions contemplated by an ongoing business relationship
occurring over a period of time. Examples include transactions
in the normal course between the Company and a dealership owned
by a director or an executive officer (or an immediate family
member thereof), transactions in the normal course between the
Company and financial institutions with which a director or
officer may be associated, and the ongoing issuances of purchase
orders or releases against a blanket purchase order made in the
normal course by the Company to a business with which a director
or officer may be associated. In such
22
instances, any such approval shall require that the Company make
all decisions with respect to such ongoing business relationship
in accordance with existing policies and procedures applicable
to non-related party transactions (e.g., Company purchasing
policies governing awards of business to suppliers, etc.).
In all cases, a director or officer with an interest in a
related party transaction may not attempt to influence Company
personnel in making any decision with respect to the transaction.
Committee
Charters/Codes of Ethics
The Company has published on its website (www.ford.com)
the charter of each of the Audit, Compensation, Finance,
Nominating and Governance, and Sustainability Committees of the
Board, as well as its Code of Conduct Handbook, which applies to
all officers and employees, a code of ethics for directors, and
a code of ethics for the Companys chief executive officer
as well as senior financial and accounting personnel. Any waiver
of, or amendments to, the codes of ethics for directors or
executive officers, including the chief executive officer, the
chief financial officer and the principal accounting officer,
may be approved only by the Nominating and Governance Committee
and any such waivers or amendments will be disclosed promptly by
the Company by posting such waivers or amendments to its
website. The Committee also reviews managements monitoring
of compliance with the Companys Code of Conduct. Printed
copies of each of the committee charters and the codes of ethics
referred to above are also available by writing to our
Shareholder Relations Department, Ford Motor Company, One
American Road, Suite 1026, Dearborn, Michigan
48126-2798.
Executive
Sessions of Non-Employee Directors
Non-employee directors ordinarily meet in executive session
without management present at regularly scheduled Board meetings
and may meet at other times at the discretion of the presiding
independent director or at the request of any non-employee
director. Currently, Irvine O. Hockaday, Jr., is the
presiding independent director for the executive sessions of
non-management directors. Additionally, all of the independent
directors meet periodically (but not less than annually) without
management or non-independent directors present.
Audit
Committee
The Charter of the Audit Committee provides that a member of the
Audit Committee generally may not serve on the audit committee
of more than two other public companies. The Board has
designated Stephen G. Butler as an Audit Committee financial
expert. Mr. Butler meets the independence standards for
audit committee members under the NYSE Listed Company and SEC
rules. The lead partner of the Companys independent
registered public accounting firm is rotated at least every five
years.
Compensation
Committee Operations
The Compensation Committee establishes and reviews our overall
executive compensation philosophy and strategy and oversees our
various executive compensation programs. The Committee is
responsible for evaluating the performance of and determining
the compensation for our Executive Chairman, the President and
CEO, and other executive officers, and approving the
compensation structure for senior management, including
officers. The Committee is composed of four directors who are
considered independent under the NYSE Listed Company rules and
our Corporate Governance Principles. The Committees
membership is determined by our Board of Directors. The
Committee operates under a written charter adopted by our Board
of Directors. The Committee annually reviews the charter. A copy
of the charter may be found on our website at
www.ford.com.
The Committee makes decisions regarding the compensation of our
officers that are Vice Presidents and above, including the Named
Executives. The Committee has delegated authority, within
prescribed share limits, to a Long-Term Incentive Compensation
Award Committee (comprised of William Clay Ford, Jr., Alan
Mulally, and L. W. K.
23
Booth) to approve grants of options, Performance Units,
Restricted Stock Units and other stock-based awards, and to the
Annual Incentive Compensation Award Committee to determine
bonuses, for other employees.
The Board of Directors makes decisions relating to non-employee
director compensation. Any proposed changes are reviewed in
advance and recommended to the Board by the Nominating and
Governance Committee.
The Compensation Committee considers recommendations from
Mr. Ford, Mr. Mulally, and the Group Vice
President Human Resources and Corporate Services, in
developing compensation plans and evaluating performance of
other executive officers. The Committees consultant also
provides advice and analysis on the structure and level of
executive compensation. Final decisions on any major element of
compensation, however, as well as total compensation for
executive officers, are made by the Compensation Committee.
In 2009, the Committee engaged Semler Brossy Consulting Group,
LLC, an independent compensation consulting firm, to advise the
Committee on executive compensation and benefits matters. Semler
Brossy is retained directly by the Committee and it has the sole
authority to review and approve of the budget of the independent
consultant. Semler Brossy does not advise our management and
receives no other compensation from us. The same Semler Brossy
principal attended all nine of the Committee meetings in 2009.
In addition, the Committee relied on survey data provided by the
Towers Perrin Executive Compensation Database. See How We
Determine Compensation C. Competitive
Survey in the Compensation Discussion and
Analysis on
pp. 35-37.
Towers Perrin does not assist the Compensation Committee in
determining or recommending compensation of executive officers.
Towers Perrin is retained by Ford management, not the Committee.
The Committee met nine times during 2009. Committee meetings
typically occur prior to the meetings of the full Board of
Directors. Bonus target grants, bonus awards, stock option
grants, Performance Unit grants, final stock awards, and Final
Awards of Restricted Stock Units typically are decided at the
February or March Committee meeting (see Compensation
Discussion and Analysis Equity-Based
Compensation D. Timing of Awards on
p. 47). Officer salaries are reviewed in December each
year. Beginning in 2010, the Committee will review officer
salaries in March of each year, consistent with the review of
other salaried employees. The Company decided that there would
be no annual merit increases to salary for salaried employees
for 2009.
See the Compensation Discussion and Analysis on
pp. 32-51
for more detail on the factors considered by the Committee in
making executive compensation decisions.
The Committee reviews our talent and executive development
program with senior management. These reviews are conducted
periodically and focus on executive development and succession
planning throughout the organization, at the Vice President
level and above.
Our policy, approved by the Compensation Committee, to limit
outside board participation by our officers, is shown below:
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No more than 15% of the officers should be on for-profit boards
at any given point in time.
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No officer should be a member of more than one for-profit board.
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Board
Committees
Only independent directors serve on the Audit, Compensation and
Nominating and Governance Committees, in accordance with the
independence standards of the NYSE Listed Company rules and the
Companys Corporate Governance Principles. The Board, and
each committee of the Board, has the authority to engage
independent consultants and advisors at the Companys
expense.
24
Communications
with the Board/Annual Meeting Attendance
The Board has established a process by which you may send
communications to the Board. You may send communications to our
Directors, including any concerns regarding Fords
accounting, internal controls, auditing, or other matters, to
the following address: Board of Directors, Ford Motor Company,
P.O. Box 685, Dearborn,
MI 48126-0685
U.S.A. You may submit your concern anonymously or
confidentially. You may also indicate whether you are a
shareholder, customer, supplier, or other interested party.
Communications relating to the Companys accounting,
internal controls, or auditing matters will be relayed to the
Audit Committee. A summary of the other communications will be
relayed to the Nominating and Governance Committee.
Communications will be referred to other areas of the Company
for handling as appropriate under the facts and circumstances
outlined in the communications. Ford will acknowledge receipt of
all communications sent to the address above that disclose a
return address. You may also find a description of the manner in
which you can send communications to the Board on the
Companys website (www.ford.com).
All members of the Board are expected to attend the annual
meeting, unless unusual circumstances would prevent such
attendance. Last year, eleven of the thirteen nominated
directors attended the annual meeting.
Management Stock
Ownership
The following table shows how much Ford stock each director,
nominee, and Named Executive beneficially owned as of
February 1, 2010. No director, nominee or executive
officer, including Named Executives, beneficially owned more
than [0.24]% of Fords total outstanding common stock.
Directors and executive officers as a group, including the Named
Executives, beneficially owned [0.58]% of Ford common stock as
of February 1, 2010. These persons held options exercisable
on or within 60 days after February 1, 2010 to buy,
and/or
beneficially owned as of February 1, 2010
Trust Preferred Securities convertible into,
[24,361,777] shares of Ford common stock.
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Percent of
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Ford
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Outstanding
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Ford
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Common
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Ford
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Ford
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Common
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Stock
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Class B
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Class B
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Name
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Stock(1)(2)(3)
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Units(4)
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Stock(5)
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Stock
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L. W. K. Booth
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423,988
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114,271
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0
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0
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Stephen G. Butler*
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6,000
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65,131
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0
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0
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Kimberly A. Casiano*
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6,927
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65,465
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0
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0
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Anthony F. Earley, Jr.*
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11,000
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6,047
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0
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0
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Mark Fields
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452,143
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7,640
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0
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0
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John Fleming
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538,272
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2,878
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0
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0
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Edsel B. Ford II*
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William Clay Ford, Jr.*
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Richard A. Gephardt*
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6,047
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0
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0
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Irvine O. Hockaday, Jr.*
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21,878
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132,263
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0
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0
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Richard A. Manoogian*
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203,496
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73,769
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0
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0
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Ellen R. Marram*
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20,296
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132,301
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0
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0
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Alan Mulally*
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851,235
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0
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0
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Homer A. Neal*
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10,588
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76,919
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0
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0
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Gerald L. Shaheen*
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40,919
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0
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0
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John L. Thornton*
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33,820
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152,486
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0
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0
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All Directors and Executive Officers as a group (including Named
Executives) (29 persons)
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25
Notes
(1)For
executive officers, included in the amounts for All
Directors and Executive Officers as a group are Restricted
Stock Equivalents
and/or
Restricted Stock Units issued under the 1998 Plan and the 2008
Plan as long-term incentive grants in 2009 and prior years for
retention and other incentive purposes.
Also, amounts shown include restricted shares of common stock
issued under the 2008 Plan as follows: [126,598] shares for
Edsel B. Ford II as payment for his services pursuant to a
consulting agreement with the Company (see pp. 28-29). In
addition, amounts shown include Restricted Stock Equivalents
and/or
Restricted Stock Units issued under the 1998 Plan and the 2008
Plan as follows: 851,235 units for Mr. Mulally,
236,219 units for L. W. K. Booth, 305,492 units for
Mr. Fields, and 447,839 units for Mr. Fleming.
(2)In
addition to the stock ownership shown in the table above: Edsel
B. Ford II has disclaimed beneficial ownership of
[105,698] shares of common stock and [55,533] shares
of Class B Stock that are either held directly by his
immediate family, by charitable funds which he controls or by
members of his immediate family in custodial or conservatorship
accounts for the benefit of other members of his immediate
family. William Clay Ford, Jr., has disclaimed beneficial
ownership of [91,842] shares of common stock and
[88,177] shares of Class B Stock that are either held
directly by members of his immediate family or by members of his
immediate family in custodial accounts for the benefit of other
members of his immediate family. Present directors and executive
officers as a group have disclaimed beneficial ownership of a
total of [197,540] shares of common stock and
[143,710] shares of Class B Stock.
Also, on February 1, 2010 (or within 60 days after
that date), the Named Executives and directors listed below have
rights to acquire shares of common stock through the exercise of
stock options under Fords stock option plans
and/or
through conversion of Trust Preferred Securities, as
follows:
|
|
|
|
|
Person
|
|
Number of Shares
|
|
|
L. W. K. Booth
|
|
|
1,706,683
|
|
Mark Fields
|
|
|
2,307,460
|
|
John Fleming
|
|
|
629,547
|
|
William Clay Ford, Jr.
|
|
|
9,290,778
|
|
Richard A. Manoogian
|
|
|
56,498
|
|
Alan Mulally
|
|
|
8,681,112
|
|
The amounts of common stock shown above for Mr. Manoogian
are a result of his ownership of Trust Preferred
Securities, which are convertible into Ford common stock. In
Mr. Manoogians case, he is deemed to be the
beneficial owner of certain Trust Preferred Securities as a
result of his being a trustee of a charitable foundation that
owns the Trust Preferred Securities. Additionally,
Mr. Manoogian pledged as security 200,000 shares of
common stock held in a trust of which he is a trustee.
[Mr. Ford has pledged 2,199,501 shares of common
stock.]
(3)Pursuant
to SEC filings, the Company was notified that as of
December 31, 2009, the following entities had more than a
5% ownership interest of Ford common stock, or owned securities
convertible into more than 5% ownership of Ford common stock, or
owned a combination of Ford common stock and securities
convertible into Ford common stock that could result in more
than 5% ownership of Ford common stock: Black Rock, Inc., 40
East 52nd
Street, New York, New York 10022, through certain of its
affiliates, owned 168,514,166 shares of common stock
(5.19%); UAW Retiree Medical Benefits Trust, 200 Walker Street,
Detroit, Michigan 48207, is the sole shareholder of VEBA-F
Holdings LLC, a Delaware Limited Liability Company which
directly owns warrants to purchase 362,391,305 shares of
common stock (10.1%) (in addition Independent Fiduciary
Services, Inc., 805
15th
Street, NW, Suite 1120, Washington, D.C. 20005, is the
investment adviser to UAW Retiree Medical Benefits Trust); and
Wellington Management Company, LLP, 75 State Street, Boston,
Massachusetts 02109, owned 139,702,629 shares of common
stock (5.33%).
(4)In
general, these are common stock units credited under a deferred
compensation plan and payable in cash.
26
(5)As of
February 1, 2010, the following persons owned more than 5%
of the outstanding Class B Stock: Lynn F. Alandt,
c/o Ford
Estates, Detroit, Michigan, beneficially owned
[7,294,064] shares ([10.30]%), Benson Ford, Jr.,
c/o Ford
Estates, Detroit, Michigan, beneficially owned
[4,055,739] shares ([5.72]%), Eleanor F. Sullivan,
c/o Ford Estates,
Detroit, Michigan, beneficially owned [5,622,973] shares
([7.94]%), Josephine F. Ingle,
c/o Ford
Estates, Detroit, Michigan, beneficially owned
[4,554,709] shares ([6.43]%), Alfred B. Ford,
c/o Ford
Estates, Detroit, Michigan, beneficially owned
[3,566,801] shares ([5.03]%), William Clay Ford,
c/o Ford
Estates, Detroit, Michigan, beneficially owned
[10,161,331] shares ([14.34]%) and Sheila F. Hamp,
c/o Ford
Estates, Detroit, Michigan, beneficially owned [3,703,330]
([5.23]%). In addition to the above, David M. Hempstead ,
c/o Ford
Estates, Detroit, Michigan controlled [6,251,516] shares
([8.82]%) as trustee of various trusts. Mr. Hempstead
disclaims beneficial ownership of these shares.
Of the outstanding Class B Stock, [52,016,831] shares
are held in a voting trust of which Edsel B. Ford II, William
Clay Ford, and William Clay Ford, Jr. are among the
trustees. The trust requires the trustees to vote the shares as
directed by a plurality of the shares in the trust.
Impact Resulting
From Spin-off of Visteon Corporation and Implementation of the
Value Enhancement Plan
The value of the Companys common stock changed as a result
of:
|
|
|
|
|
the spin-off of the Companys interest in Visteon
Corporation on June 28, 2000; and
|
|
|
|
the Companys recapitalization and merger (also known as
the Value Enhancement Plan) on August 2, 2000.
|
To account for these changes in value, the following items held
by officers or directors of the Company as of June 28, 2000
and August 2, 2000, respectively, were adjusted in each
case to ensure that the aggregate value of the item before and
after each of these events would be approximately equal: common
stock units, deferred contingent credits, Performance Stock
Rights, Restricted Stock Equivalents, and stock options.
(References in this proxy statement to any of these items that
were issued before August 2, 2000 are to the adjusted
amounts.)
Section 16(a)
Beneficial Ownership Reporting Compliance
Based on Company records and other information, Ford believes
that all SEC filing requirements applicable to its directors and
executive officers were complied with for 2009 and prior years.
27
Director
Compensation(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
|
Fees Earned or
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
Paid in
Cash(1)
|
|
|
|
Stock
Awards(2)
|
|
|
|
Compensation(3)
|
|
|
|
Total
|
|
Name
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
Stephen G. Butler
|
|
|
|
60,000
|
|
|
|
|
0
|
|
|
|
|
38,998
|
|
|
|
|
98,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kimberly A. Casiano
|
|
|
|
60,000
|
|
|
|
|
0
|
|
|
|
|
34,816
|
|
|
|
|
94,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anthony F. Earley, Jr.
|
|
|
|
45,000
|
|
|
|
|
0
|
|
|
|
|
158
|
|
|
|
|
45,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edsel B. Ford II
|
|
|
|
60,000
|
|
|
|
|
500,001
|
|
|
|
|
14,268
|
|
|
|
|
574,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard A. Gephardt
|
|
|
|
45,000
|
|
|
|
|
0
|
|
|
|
|
158
|
|
|
|
|
45,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Irvine O. Hockaday, Jr.
|
|
|
|
60,000
|
|
|
|
|
0
|
|
|
|
|
24,132
|
|
|
|
|
84,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard A. Manoogian
|
|
|
|
60,000
|
|
|
|
|
0
|
|
|
|
|
30,992
|
|
|
|
|
90,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ellen R. Marram
|
|
|
|
60,000
|
|
|
|
|
0
|
|
|
|
|
33,738
|
|
|
|
|
93,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homer A. Neal
|
|
|
|
60,000
|
|
|
|
|
0
|
|
|
|
|
51,173
|
|
|
|
|
111,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerald L. Shaheen
|
|
|
|
60,000
|
|
|
|
|
0
|
|
|
|
|
33,768
|
|
|
|
|
93,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John L. Thornton
|
|
|
|
60,000
|
|
|
|
|
0
|
|
|
|
|
50,524
|
|
|
|
|
110,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Standard
Compensation Arrangements
Fees. On July 13, 2006, the Board of
Directors voluntarily reduced Board fees payable to non-employee
directors by half resulting in the following fee structure:
|
|
|
|
|
Annual Board membership fee
|
|
$
|
100,000
|
|
Annual Committee chair fee
|
|
$
|
2,500
|
|
Annual Presiding Director fee
|
|
$
|
5,000
|
|
For 2009, the Board voluntarily agreed to forgo the cash portion
of the annual fees. Consequently, $60,000 (60% of the Annual
Board membership fee) was credited to the directors
accounts under the Deferred Compensation Plan for Non-Employee
Directors (see below). Directors did not receive any other cash
payments relative to board fees during 2009.
Deferred Compensation Plan. Under this plan,
60% of a directors annual Board membership fee must be
deferred in common stock units. Directors also can choose to
have the payment of all or some of the remainder of their fees
deferred in the form of cash
and/or
common stock units. Each common stock unit is equal in value to
a share of common stock and is ultimately paid in cash. These
common stock units generate Dividend Equivalents in the form of
additional common stock units (if dividends are paid on common
stock). These units are credited to the directors accounts
on the date common stock cash dividends are paid. Any fees
deferred in cash are held in the general funds of the Company.
Interest on fees deferred in cash is credited semi-annually to
the directors accounts at the then-current
U.S. Treasury Bill rate plus 0.75%. In general, deferred
amounts are not paid until after the director retires from the
Board. The amounts are then paid, at the directors option,
either in a lump sum or in annual installments over a period of
up to ten years. In light of the requirement that 60% of annual
director fees are deferred into common stock units, and that
directors do not realize the cash value of such units until
after they leave the Board, there is no minimum share ownership
requirement for members of the Board.
Insurance. Ford provides non-employee
directors with $200,000 of life insurance. Effective
December 31, 2008, the Board amended this plan so that life
insurance coverage ends for all currently retired directors and
directors who
28
retire in the future, except for those currently retired
directors who had previously elected a reduction in life
insurance and the $15,000 annuity discussed below, in which case
only the annuity would continue. A director who retired from the
Board after age 70 or, after age 55 with Board
approval, and who had served for at least five years, may have
elected to have the life insurance reduced to $100,000 and
receive $15,000 a year for life.
Evaluation Vehicle Program. We provide
non-employee directors with the use of up to two Company
vehicles free of charge. Directors are expected to provide
evaluations of the vehicles to the Company.
(2)The
amount shown for Edsel B. Ford II reflects the FASB ASC
Topic 718 grant date fair value resulting from grants of
restricted shares of common stock awarded under the 2008 Plan
pursuant to a January 1999 consulting agreement between the
Company and Mr. Ford. Under the agreement, the consulting
fee is $125,000 per calendar quarter, payable in restricted
shares of common stock. The restrictions on the shares lapse one
year from the date of grant and are subject to the conditions of
the 2008 Plan. Mr. Ford is available for consultation,
representation, and other duties under the agreement.
Additionally, the Company provides facilities (including office
space), an administrative assistant, and security arrangements.
This agreement will continue until either party ends it with
30 days notice.
(3)The
following table summarizes the amounts shown in column (d).
All Other
Compensation in 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evaluation
|
|
|
|
Tax
|
|
|
|
Life
|
|
|
|
|
|
|
|
|
Fees(i)
|
|
|
|
Vehicles(ii)
|
|
|
|
Reimbursement
|
|
|
|
Insurance
|
|
|
|
Total
|
|
Name
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
Stephen G. Butler
|
|
|
|
|
|
|
|
|
20,268
|
|
|
|
|
18,519
|
|
|
|
|
211
|
|
|
|
|
38,998
|
|
Kimberly A. Casiano
|
|
|
|
|
|
|
|
|
18,686
|
|
|
|
|
15,919
|
|
|
|
|
211
|
|
|
|
|
34,816
|
|
Anthony F. Earley, Jr.
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
158
|
|
|
|
|
158
|
|
Edsel B. Ford II
|
|
|
|
|
|
|
|
|
14,057
|
|
|
|
|
0
|
|
|
|
|
211
|
|
|
|
|
14,268
|
|
Richard A. Gephardt
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
158
|
|
|
|
|
158
|
|
Irvine O. Hockaday, Jr.
|
|
|
|
|
|
|
|
|
10,162
|
|
|
|
|
13,759
|
|
|
|
|
211
|
|
|
|
|
24,132
|
|
Richard A. Manoogian
|
|
|
|
|
|
|
|
|
16,438
|
|
|
|
|
14,343
|
|
|
|
|
211
|
|
|
|
|
30,992
|
|
Ellen R. Marram
|
|
|
|
|
|
|
|
|
19,510
|
|
|
|
|
14,017
|
|
|
|
|
211
|
|
|
|
|
33,738
|
|
Homer A. Neal
|
|
|
|
12,000
|
|
|
|
|
23,972
|
|
|
|
|
14,990
|
|
|
|
|
211
|
|
|
|
|
51,173
|
|
Gerald L. Shaheen
|
|
|
|
|
|
|
|
|
16,878
|
|
|
|
|
16,679
|
|
|
|
|
211
|
|
|
|
|
33,768
|
|
John L. Thornton
|
|
|
|
|
|
|
|
|
30,499
|
|
|
|
|
19,814
|
|
|
|
|
211
|
|
|
|
|
50,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)The
amount shown for Dr. Neal reflects fees paid as a member of
the board of managers of Ford Global Technologies, LLC, a
wholly-owned entity that manages the Companys intellectual
property. As a non-employee director of such board,
Dr. Neal receives the customary fees paid to non-employee
directors. Currently, the fees are: Annual Fee: $10,000,
Attendance Fee: $1,000 per meeting. Dr. Neal attended both
meetings of the board of managers of Ford Global Technologies,
LLC, during 2009.
(ii)All
amounts shown in this column reflect the cost of evaluation
vehicles provided to Directors (see footnote (1) above) and
the actual cost incurred for holiday gifts. We calculate the
aggregate incremental costs of providing the evaluation vehicles
by estimating the lease fee of a comparable vehicle under our
Management Lease Program. The lease fee under that program takes
into account the cost of using the vehicle, maintenance,
license, title and registration fees, and insurance. For
Mr. Thornton, the cost of evaluation vehicles was $29,732.
29
2010 Director
Compensation
Ford has made significant progress on its ONE Ford
Plan during 2009 and we have announced that we plan to be
profitable in 2010 on a pre-tax basis (excluding special items)
for North America, our total Automotive sector and for the total
Company, with positive Automotive operating-related cash flow,
based on our 2010 planning assumptions.
In light of this significant progress, and following an analysis
of director compensation being paid by peer group companies,
including the payment of director compensation at General Motors
following its bankruptcy, the Board of Directors of Ford has
determined that it is appropriate that compensation to be paid
to non-employee directors of the Company return to 2006 levels.
Accordingly, effective as of January 1, 2010, the Board of
Directors has agreed that the following compensation will be
paid to non-employee directors of the Company:
|
|
|
|
|
$200,000 per annum
|
|
|
|
$5,000 Committee chair fee
|
|
|
|
$10,000 Presiding director fee
|
The Board of Directors also considered that restoring
compensation to competitive levels will permit the Company to
attract new directors in an environment where it is increasingly
difficult to attract qualified directors.
Moreover, the Board of Directors continues to believe that it is
appropriate that a significant portion of non-employee director
compensation be tied to shareholders interests and,
therefore, has required that 60% ($120,000) of a directors
annual Board membership fee be deferred in common stock units
under the Deferred Compensation Plan for Non-Employee Directors.
All other aspects of Director compensation remain unchanged.
30
Certain
Relationships and Related Transactions
Since January 1993, Ford has had a consulting agreement with
William Clay Ford. Under this agreement, Mr. Ford is
available for consultation, representation, and other duties.
For these services, Ford pays him $100,000 per year and provides
facilities (including office space), an administrative
assistant, and security arrangements. This agreement will
continue until either party ends it with 30 days
notice.
In February 2002, Ford entered into a Stadium Naming and License
Agreement with The Detroit Lions, Inc., pursuant to which we
acquired for $50 million, paid by us in 2002, the naming
rights to a new domed stadium located in downtown Detroit at
which the Lions began playing their home games during the 2002
National Football League season. We named the stadium Ford
Field. The term of the naming rights agreement is
25 years, which commenced with the 2002 National Football
League season. Benefits to Ford under the naming rights
agreement include exclusive exterior entrance signage and
predominant interior promotional signage. In June 2005, the
naming rights agreement was amended to provide for expanded Ford
exposure on and around the exterior of the stadium, including
the rooftop, in exchange for approximately $6.65 million to
be paid in varying installments over the next ten years, of
which $564,933 was paid during 2009. Beginning in 2005, the
Company also agreed to provide to the Lions, at no cost, eight
new model year Ford, Lincoln or Mercury brand vehicles
manufactured by Ford in North America for use by the
management and staff of Ford Field and the Lions and to replace
such vehicles in each second successive year, for the remainder
of the naming rights agreement. The cost incurred during 2009
for providing the vehicles for 2009 through 2011 was $244,696.
William Clay Ford is the majority owner of the Lions. In
addition, William Clay Ford, Jr., is one of five minority
owners and is a director and officer of the Lions.
Paul Alandt, Lynn F. Alandts husband, owns a
Ford-franchised dealership and a Lincoln-Mercury-franchised
dealership. In 2009, the dealerships paid Ford about
$79.6 million for products and services in the ordinary
course of business. In turn, Ford paid the dealerships about
$17.0 million for services in the ordinary course of
business. Also in 2009, Ford Motor Credit Company LLC, a
wholly-owned entity of Ford, provided about $115 million of
financing to the dealerships and paid $497,950 to them in the
ordinary course of business. The dealerships paid Ford Credit
about $123.4 million in the ordinary course of business.
Additionally, in 2009 Ford Credit purchased retail installment
sales contracts and Red Carpet Leases from the dealerships in
amounts of about $18.5 million and $31.4 million,
respectively.
Mr. Alandt also owns a Volvo franchised dealership. Volvo
Cars is a wholly-owned entity of Ford. During 2009 the
dealership paid Volvo Cars about $7.4 million for products
and services in the ordinary course of business. In turn, Volvo
Cars paid the dealership about $2.0 million for services in
the ordinary course of business. Also in 2009, Ford Credit
provided about $10.3 million of financing to the dealership
and paid $11,798 to it in the ordinary course of business. The
dealership paid Ford Credit about $10.6 million in the
ordinary course of business. Additionally, in 2009 Ford Credit
purchased retail installment sales contracts and retail leases
from the dealership in amounts of $370,000 and about $559,000,
respectively.
Edsel B. Ford II owns Pentastar Aviation, LLC, an aircraft
charter, management, maintenance, and catering company. During
2009, the Company paid Pentastar, or its affiliates, $579,720
for services provided to the Company in the ordinary course of
business.
In March 2001, Marketing Associates, LLC, an entity in which
Edsel B. Ford II has a majority interest, acquired all of
the assets of the Marketing Associates Division of Lason
Systems, Inc. Before the acquisition, the Marketing Associates
Division of Lason Systems, Inc. provided various marketing and
related services to the Company and this continued following the
acquisition. In 2009, the Company paid Marketing Associates, LLC
approximately $23.7 million for marketing and related
services provided in the ordinary course of business.
Pursuant to SEC filings, the Company was notified that as of
December 31, 2008, Black Rock, Inc., 40 East 52nd Street,
New York, New York 10022, through certain of its affiliates,
owned 5.19% of our common stock. During 2009, the Company paid
Black Rock approximately $1.1 million in the ordinary
course of business.
Pursuant to SEC filings, the Company was notified that as of
December 31, 2008, Wellington Management Company, LLP, 75
State Street, Boston, Massachusetts 02109, owned approximately
5.33% of the Companys common stock. During 2009, the
Company paid Wellington Management Company approximately
$3.8 million in the ordinary course of business.
31
Compensation
Discussion and Analysis
Executive Summary
2009 saw historic changes and challenges in the domestic
automotive industry, as well as the global economy. We took
decisive actions to address these challenges and opportunities.
As noted in our 2009 Compensation Discussion and Analysis, we
are acutely aware that economic conditions have had, and
continue to have, a significant adverse impact on our
shareholders, customers, suppliers, dealers, employees, and
other stakeholders. These conditions include plunging consumer
confidence, a severe downturn in auto sales, a significant
decrease in home values, and high unemployment. In response to
these developments, the Company and the Compensation Committee
took the following compensation actions, among others, in order
to reduce Company costs and conserve cash:
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Thirty-percent reduction in the salaries of Mr. Mulally and
Mr. Ford for 2009 and 2010.
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No annual merit increases to salary for salaried employees,
including the Named Executives, for 2009.
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No payout under the Incentive Bonus Plan for 2008 or 2009
performance.
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Suspension of Company matching contributions for employees who
contribute to our 401(k) savings plans for 2009.
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Elimination of the cash portion of Board of Director annual fees
in 2009.
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These actions, combined with other actions taken to conserve
cash and reduce costs in our business, contributed to
$5.8 billion in improved cost performance (excluding
special items) during 2009, reduced our cash-burn rate by
$19.2 billion from 2008 to 2009, and contributed to our
2009 full year net income of $2.7 billion.
Given the adverse economic environment, the Committees
goals were to provide executives with longer-term incentives to
achieve our business priorities while reducing costs and
conserving cash. As detailed below, the Committee decided to
emphasize equity-based compensation for the Named Executives,
the majority of which were performance-based equity grants. This
approach:
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Involved minimal initial cash outlay, thereby conserving cash.
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Aligned executive interests with shareholders interests by
allowing executives to benefit from successful performance but
also suffer the consequences for poor longer-term performance.
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Provided strong incentive to continue to manage our business
without accessing TARP funds.
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Provided a strong retention element to executives during a
critical period in executing our ONE Ford Plan.
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As discussed in more detail below, our 2009 performance against
targets met many of our objectives for the year. This resulted
in the Named Executives receiving more than 90% of their target
equity incentives grants. Given the challenging economic
environment, we believe this performance to be outstanding, and
we are gratified that stakeholders have shown renewed confidence
in our future.
How We Determine
Compensation
The following discussion of our compensation philosophy,
strategy, and guiding principles provides you with the framework
within which compensation programs are developed at Ford. The
discussion of the Companys compensation objectives and
business strategy provides you with background of those areas
that were determined to be important in moving the Company
forward in its goal of executing our ONE Ford Plan.
32
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A.
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Compensation
Philosophy, Strategy, and Guiding Principles
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Our Compensation Committee adopted the following Philosophy
Statement with respect to all salaried employees:
Compensation and benefits programs are an important part
of the Companys employment relationship, which also
includes challenging and rewarding work, growth and career
development opportunities, and being part of a leading company
with a diverse workforce and great products. Ford is a global
company with consistent compensation and benefits practices that
are affordable to the business.
Pay for performance is fundamental to our compensation
philosophy. We reward individuals for performance and
contributions to business success. Our compensation and benefits
package in total will be competitive with leading companies in
each country.
In addition, the Committee has approved the following Strategy
Statement:
Compensation will be used to attract, retain, and motivate
employees and to reward the achievement of business results
through the delivery of competitive pay and incentive programs.
Benefits provide employees with income security and protection
from catastrophic loss. The Company will develop benefit
programs that meet these objectives while minimizing its
long-term liabilities.
33
The following Guiding Principles ensure our Philosophy and
Strategy statements are applied consistently across the business
for our salaried employees. They work together no
one principle is more important than any other and management
judgment is used to balance them in changing business conditions.
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Principle
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Overall Objective
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Performance Orientation
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Compensation programs should support and reinforce a
pay-for-performance culture. They should motivate and reward
employees for achieving desired business results. Benefit
programs should provide income security and support/protect for
catastrophic loss.
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Competitive Positioning
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Competitive compensation and benefit programs are critical to
attracting, motivating and retaining a high performing
workforce. We target the average competitive level of automotive
and other leading companies within the national market,
including large auto, leading multinational and other selected
companies, as appropriate. Competitiveness will be measured
based on program value to employees relative to the comparator
group. When business conditions are such that our incentive
programs do not provide competitive compensation on a
longer-term basis, we will utilize short- and long-term
retention programs to ensure the Company retains key employees
that enable the Company to respond successfully to financial and
operational challenges.
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Affordability
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Compensation and benefits must be affordable to the Company over
the medium- to long-term. To the extent possible, compensation
and benefit programs will not fluctuate significantly based on
short-term business conditions.
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Desired Behaviors
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Compensation and benefit programs should support the
Companys business performance objectives and promote
desired behaviors.
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Flexibility
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Compensation, benefit, and other related programs should take
into account workforce diversity and provide meaningful
individual choice where appropriate.
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Consistency and Stability
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It is a Company objective to provide consistent and stable
programs globally (subject to legal, competitive and cultural
constraints), particularly for higher level positions.
Compensation and benefit programs should have a high degree of
consistency within countries (i.e., among various pay levels and
employee groups) and should not fluctuate significantly
year-over-year. Programs may vary when competitively driven.
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Delivery Efficiency
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Compensation, benefit, and other related programs should be
understandable and easy to administer while leveraging economies
of scale and technology. They should be implemented in a
consistent, equitable, and efficient manner. Programs will be
delivered in a manner that is tax-effective to the Company and
employees as far as practicable.
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Delivery Effectiveness
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Clearly defined metrics should be developed for compensation,
benefit and other related programs that are aligned with
corporate business performance metrics. Metrics will be designed
and utilized to measure and continually improve business results.
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The Philosophy and Strategy statements and Guiding Principles
are reviewed by the Committee on a regular basis. In 2006, the
Committee amended the Strategy Statement to include retention of
employees as an objective to emphasize the importance of this
goal as we execute our turnaround plan. Attraction and retention
of talented executives has proven to be even more challenging as
conditions in the economy and our industry have worsened. There
were no material changes to the Philosophy and Strategy
statements and Guiding Principles in 2009.
34
As noted above, one of the primary objectives of our
compensation program is to drive executive behavior to
accomplish key strategic goals. Our President and Chief
Executive Officer, Alan Mulally, further developed the
Companys strategic priorities under the strategy of ONE
Ford. ONE Ford provides a single definition of not only what we
need to accomplish but how we need to deliver those
accomplishments to achieve success globally. ONE Ford aligns our
efforts toward a common definition of success, which includes
One Team executing One Plan to deliver One Goal.
One Team means people working together as a lean, global
enterprise for automotive leadership.
One Plan means to:
1. Aggressively restructure our business to operate
profitably at current demand and changing model mix.
2. Accelerate the development of new products our customers
want and value.
3. Finance our plan and improve our balance sheet.
4. Work together effectively as one team.
One Goal means an exciting, viable Ford delivering profitable
growth for all.
The Compensation Committee, in consultation with the Executive
Chairman, the President and Chief Executive Officer, and the
Group Vice President Human Resources and Corporate
Services, determined that emphasizing certain metrics in
performance-based incentive plans would best promote our ONE
Ford objectives. Given these priorities, the Committee decided
to emphasize global and business unit profitability, total
Automotive operating-related cash flow and cost performance
metrics in our incentive plans for 2009. These metrics support
the goals of aggressively restructuring our business to operate
profitably, as well as financing our plan and improving our
balance sheet. Additionally, the Committee emphasized quality
and market share metrics in our incentive programs. These
metrics support our goals of accelerating the development and
introduction of new products our customers want and value.
Furthermore, the performance metric to reduce global platforms
for Mr. Fords and Mr. Mulallys 2009
Incentive Grants (see Equity-Based
Compensation A. 2009 Incentive Grants on
pp. 41-42)
supports the objectives of accelerating the development of new
products our customers want and value, as well as restructuring
our business to operate profitably at current demand and
changing model mix. All of these objectives require effective
teamwork.
As discussed in greater detail below, performance in these
critical areas drove the compensation decisions related to
Performance Units for Named Executives for 2009. For more detail
on these metrics and how they were used in our incentive
programs, refer to Equity-Based Compensation
A. 2009 Incentive Grants, B. Senior Executive Retention
Program and C. Annual Performance Unit and Stock
Option Grants on pp. 40-47. This compensation structure is
consistent with our compensation Philosophy, Strategy, and
Guiding Principles of performance orientation, flexibility,
competitive positioning, affordability, and reinforcing desired
behaviors.
In December 2009, the Committee reviewed a report on Fords
compensation programs for executives. The Company utilized the
Towers Perrin Executive Compensation Database as the data source
for the Companys analysis of executive compensation. The
compensation data was collected during the second quarter of
2009 and, therefore, included bonuses paid in early 2009 for
2008 performance, as well as equity grants for 2009. The report
discussed how our executive compensation program compared with
those of peer companies on base salary, bonus, long-term
incentives, and total direct compensation.
In September 2009, we reviewed the companies included in our
executive compensation survey in order to ensure appropriate
comparisons. Although we have performed peer group analysis in
the past, this years review held
35
additional significance due to: (i) the impact of the global
economic downturn on many peer group companies;
(ii) on-going public and governmental scrutiny of executive
compensation; and (iii) additional regulatory requirements
associated with proxy disclosures. Although stability of the
peer group has been a high priority for several years and has
provided useful
year-over-year
data comparison, the realities of todays marketplace and
prior inclusion of certain financial services firms required a
re-evaluation of the peer group companies.
In consultation with the Committees independent
consultant, the following criteria were used in the selection of
the recommended peer group companies:
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Member of the 2009 Fortune 100 (with preference to the
largest companies meeting the other criteria because of
Fords relative size at #7 on the Fortune 100
list).
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Similar primary business to Ford
and/or
similar business model (e.g., engineering, manufacturing, sales,
financial services, job matches).
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Particular line of business will comprise no more than 20% of
the total peer group.
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Must participate in the Towers Perrin survey process.
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The above criteria ensure that the chosen executive compensation
peer group will be representative of Fords market for
talent. Based on these criteria, for the 2009 survey we removed
AT&T, Altria Group, BP, Citigroup,
Coca-Cola
and Merck and added Lockheed Martin, General Dynamics, Valero,
United Technologies, PepsiCo, Pfizer and Honeywell.
The compensation of executives of General Motors and Chrysler
has been regulated due to those companies participation in
TARP. We continue to believe, however, it is appropriate to
include them in our comparator survey group because they are our
closest domestic competitors. Our
non-U.S. based
competitors, such as Nissan, Toyota, and Honda, do not
participate in the Towers Perrin survey process. In addition to
General Motors and Chrysler, our peer group also included 21
leading companies in other industries:
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3M
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Conoco Phillips
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General Electric
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Lockheed Martin
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Alcoa
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Dow Chemical
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Hewlett-Packard
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PepsiCo
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Boeing
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DuPont
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Honeywell
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Pfizer
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Caterpillar
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ExxonMobil
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IBM
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Procter & Gamble
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Chevron Texaco
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General Dynamics
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Johnson & Johnson
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United Technologies Valero
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While the Committee uses the survey as a reference point, it is
not, and was not in 2009, the sole determining factor in
executive compensation decisions. The survey group data is used
primarily to ensure that our executive compensation program as a
whole is competitive when the Company achieves targeted
performance levels. We generally seek to provide total
compensation opportunities, which include salary, annual bonus
and long-term incentives, at or around the survey groups
median total compensation. We do not establish rigid targets for
total compensation, or any individual element of compensation,
relative to the survey group. Rather, consistent with our
compensation Guiding Principles discussed above, we incorporate
flexibility into our compensation programs and in the executive
assessment process to respond to, and adjust for, changes in the
business/economic environment and individual accomplishments,
performance and circumstances. This flexibility was evident in
2009 when we canceled the Incentive Bonus Plan for 2009, as well
as annual merit increases to salary, and instead emphasized
performance-based equity compensation.
Although we discuss how the total direct compensation of our
Named Executives compares to that of the survey group,
Mr. Ford did not have an exact comparable position within
the survey group and, consequently, his compensation was
excluded from our analysis. The 2009 survey results indicated
that the total direct compensation for our other Named
Executives as a group was at the median, except for
Mr. Mulally whose compensation was above the median. In
general, 2009 cash compensation for the Named Executives was
significantly below the median of the survey group, and
equity-based compensation was slightly above the median on
average, except for
36
Mr. Mulally, whose equity-based compensation was
significantly above the median (see Equity-Based
Compensation on pp. 40-41 for an analysis of how
equity compensation affected the compensation of the Named
Executives). The Committees emphasis on performance-based
equity compensation reinforces the Committees pay for
performance compensation philosophy (see How We Determine
Compensation A. Compensation Philosophy, Strategy,
and Guiding Principles on pp. 33-34).
An analysis of how each element of compensation listed below
compared to the survey data for 2009, as well as how the factors
described above, including the competitive survey data review,
affected Named Executive compensation decisions during 2009, is
included in the discussion of each element.
D. Internal
Pay Equity and Equity-Value Accumulation Analyses
Each year, the Committee reviews all components of compensation,
both recent historical and prospective, of our executive
officers, including the Named Executives. This review includes
data on salary, annual bonuses, and equity-based awards, as well
as qualitative data on perquisites, and is prepared by the
Companys Human Resources department. The Committee also
takes into account relative pay considerations within the
officer group and data covering individual performance. The
Committee considered internal pay equity in deciding that those
executives who participated in the Senior Executive Retention
Program would not also participate in the 2009 Incentive Grants
(see Equity-Based Compensation A. 2009
Incentive Grants and B. Senior Executive Retention
Program on pp. 41-42).
The Committee also considers analyses of the potential value of
outstanding equity grants. For instance, the Committee reviewed
the value of equity-based awards at certain price levels of Ford
stock. The analysis included the following:
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in-the-money
stock options;
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unvested Restricted Stock Units;
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2009 Performance Unit and final tranche of Senior Executive
Retention Grant assumed a 50% payout; and
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assumed a 100% payout of the 2009 Incentive Grants for
Messrs. Mulally and Ford.
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In light of our stock price and our desire to conserve cash, the
Committee believes our equity-based compensation programs are
appropriate to attract, motivate and retain executives.
E. Management
Recommendations
The Committee considers recommendations from William Clay
Ford, Jr., Mr. Mulally, and the Group Vice
President Human Resources and Corporate Services, in
developing compensation plans and evaluating performance of
other executive officers. The Committees consultant also
provides advice and analyses on the structure and level of
executive compensation (see Compensation Committee Operations on
pp. 23-24). As noted in How We Determine
Compensation B. ONE Ford above,
Mr. Mulally established the ONE Ford corporate priorities
and, subsequently, our incentive plan metrics were developed in
consultation with our Human Resources and Finance departments to
support these priorities. In addition, these metrics and related
targets were developed from our 2009 business plan. Final
decisions on any major element of compensation, however, as well
as total compensation for each executive officer, are made by
the Compensation Committee.
Named Executive
Officers
The Named Executives are:
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Alan Mulally President and Chief Executive Officer
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L. W. K. Booth Executive Vice President and Chief
Financial Officer
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William Clay Ford, Jr.* Executive Chairman
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37
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Mark Fields Executive Vice President and
President The Americas
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John Fleming Executive Vice President
Global Manufacturing & Labor Affairs and Chairman Ford
of Europe
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*As
previously described, since 2005 Mr. Ford has foregone all
compensation (including salary, bonus or other awards) until
such time as the Compensation Committee determines that the
Companys global Automotive sector has achieved full-year
profitability, excluding special items. It was further agreed
that the compensation Mr. Ford would have received
beginning in 2008 and future years, but for the agreement to
continue to forego new compensation, will be earned and paid
when the Committee determines that the Companys global
Automotive sector has achieved full-year profitability,
excluding special items. In order to determine the compensation
Mr. Ford could earn if the Company returns to full-year
global Automotive profitability, excluding special items, the
Committee approved a compensation plan for him for the years
2008 and 2009, including salary, bonus, and equity awards. As
discussed under Equity-Based Compensation on
pp. 40-47,
Mr. Ford was granted Performance Units that will be earned
and paid based on Company performance against metrics, as well
as when the Company achieves full-year global Automotive
profitability, excluding special items. In 2009, Mr. Ford
was also granted stock options that will vest upon the later of
the normal
three-year
vesting schedule and the Company achieving full-year global
Automotive profitability, excluding special items. According to
FASB ASC Topic 718, these Performance Units and stock
options have grant date values (see columns (e) and (f) of
Summary Compensation Table on p. 53). Consequently,
Mr. Ford is included as a Named Executive pursuant to the
SEC proxy rules even though he did not, and will not, receive
salary, bonus, or equity awards until such time as the Committee
determines the Companys global Automotive sector has
achieved full-year profitability, excluding special items.
Elements of
Compensation
The table below lists the elements of our total compensation
program and why we provide these elements:
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Elements of Compensation
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Why We Provide
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Salaries
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attract, retain and motivate executives
to achieve key business priorities
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and objectives
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provide income certainty
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Incentive Bonuses
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attract, retain and motivate executives
to achieve key business priorities
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and objectives
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hold executives accountable for
performance against near-term business
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objectives
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Annual Performance Unit and Stock
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attract, retain and motivate executives
to achieve key business priorities
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Option Grants
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and objectives
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encourage executive stock ownership
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hold executives accountable for
performance against targets
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focus executive behavior on Fords
long-term success
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align executive interests with
shareholder interests
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Perquisites and Other Benefits
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attract, retain and motivate executives
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enhance executive productivity
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support development of our products
(evaluation vehicles)
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Retirement Plans
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provide income security for retirement
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retain executives
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38
Each compensation element is supported by the Philosophy,
Strategy and Guiding Principles discussed in the How We
Determine Compensation on pp. 33-34.
To achieve our objectives and to support our business strategy,
compensation paid to our executives is structured to ensure that
there is an appropriate balance among the various forms of
compensation. The charts below show the various balances we
achieved (with and without the 2009 Incentive Grants) compared
to the balances achieved by the survey group:
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Ford
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Comparator Group Median
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As the charts indicate, cash compensation makes up a higher
percentage of our executives compensation than that of the
comparator groups median when excluding the 2009 Incentive
Grants (see Equity-Based Compensation A. 2009
Incentive Grants on pp. 41-42). Furthermore, without
the 2009 Incentive Grants, equity-based compensation makes up a
lower percentage of our executives compensation than that
of the comparator group. When including the 2009 Incentive
Grants, the balance among the forms of compensation is
approximately equal to the comparator group.
The Committee attempts to strike appropriate balances by
analyzing the competitive market for executive talent, our
business results and forecasts, and our key strategic goals for
the year. As noted in the Executive Summary on
p. 32, in order to conserve cash, the Committee emphasized
performance-based equity compensation in 2009 to keep us on
track on our restructuring plan. Given the persistent adverse
economic conditions that occurred during 2009, we accelerated
our turnaround plans. As a result of these efforts, we were able
to announce that, based on our assumptions, we now expect our
North American Automotive Operations to be profitable in 2010
and to be solidly profitable in 2011.
39
Annual
Compensation
Annual compensation for our executives includes salary and
incentive bonus, if earned, paid in cash.
When considering increases to base salaries, the Compensation
Committee takes into account the following factors:
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the individuals job duties, performance and achievements;
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similar positions of responsibility within the Company (internal
pay equity);
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job tenure, time since last salary increase, retention concerns
and critical skills; and
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level of pay compared to comparable positions at companies in
the survey group.
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The Compensation Committee reviews salaries of the Named
Executives annually and at the time of a promotion or other
major change in responsibilities. As part of our objective to
control costs, there were no increases to salaries (annual merit
or otherwise) for any of the Named Executives in 2009.
Throughout 2009, the salaries for the Named Executives were
above the median of the survey group. We believe that paying
base salaries at the high end of the competitive survey is
appropriate to retain executives throughout the business cycle
because cash compensation
and/or total
compensation may be much lower than competitive levels while we
restructure (see How We Determine Compensation
C. Competitive Survey on pp. 35-37). The
relative salary level is also explained by the fact that Ford is
generally larger and more complex than many of the companies in
the survey group, with world-wide operations, a capital
intensive business involving complex products with long product
development timelines.
B. Incentive
Bonuses
In the first quarter of 2009, in response to adverse economic
conditions and in order to conserve cash and reduce expense,
management recommended and the Committee decided that the 2009
Incentive Bonus Plan would be cancelled and therefore no payout
would be made in March 2010 under the Incentive Bonus Plan for
the 2009 performance period. Although performance against the
metrics would have resulted in a significant payout, the
Committee determined that the business need to conserve cash and
reduce expense outweighed other considerations. This resulted in
the total cash compensation of the Named Executives being
significantly below the median of the comparator group. Based on
performance to metrics for the 2009 performance year, we saved
approximately $300 million by canceling the company-wide
2009 Incentive Bonus Plan.
The metrics, weightings, and performance targets for the 2009
Incentive Bonus Plan, if it had not been cancelled, would have
been identical to those used for the 2009 Performance Unit
program (see Equity-Based Compensation C.
Annual Performance Unit and Stock Option Grants on pp.
42-47). Since the decision to cancel the Incentive Bonus Plan
for the 2009 performance period was made in the first quarter of
2009, no threshold, target, and maximum payouts were applicable
for the Named Executives (see the Grants of Plan-Based Awards in
2009 Table and footnote 1 on p. 57).
Equity-Based
Compensation
Our equity-based incentive awards are tied to our performance
and the future value of our common stock. These awards are
intended to focus executive behavior on our longer-term
interests, because todays business decisions affect Ford
over a number of years. For 2009, our equity-based compensation
consisted of new grants of Performance Units, stock options, and
incentive grants to certain Named Executives, as explained in
more detail below.
As discussed above, the competitive survey indicates that
equity-based compensation for the Named Executives is
approximately at the median of the comparator group on average
when including the 2009 Incentive Grants (see
40
Equity-Based Compensation A. 2009 Incentive Grants).
For Mr. Mulally, the survey showed that his total
equity-based compensation was significantly above the median of
the survey group. This positioning reinforces our desire to, in
general, pay at or near the median of equity compensation
compared to the survey group as well as demonstrates flexibility
in our compensation practices to reward superior performance and
to respond to changing business and economic conditions.
As noted under Equity-Based Compensation
D. Timing of Awards on p. 47, the Committee
determined 2009 equity awards at a meeting on February 25,
2009. At that time, the economy and the automotive industry were
in the midst of a severe economic crisis. Speculation was
increasing that our two main domestic competitors were preparing
for bankruptcy, and it was unclear how that would affect Ford.
As noted in the Executive Summary on p. 32, the
Company needed to conserve cash and yet provide executives with
a strong retention incentive to accelerate our ONE Ford Plan.
The Committee decided to emphasize equity-based compensation in
order accomplish these goals.
In granting stock awards, the Committee determines a dollar
value of equity awards for each recipient. For officers, this
dollar value is translated into a number of stock options,
Performance Units, and time-based Restricted Stock Units based
on the fair market value of Ford common stock on the date of
grant. Non-officer recipients are granted stock options
and/or
time-based Restricted Stock Units depending on their leadership
level. Because of the significant decrease in Fords stock
price in late 2008 and early 2009, it became evident that there
would not be enough shares available under the 2008 Plan to
provide recipients with the full value of the planned equity
awards. Under our 2008 Plan, the number of shares of common
stock available for stock awards in any year is equal to 2% of
the total number of issued shares of common stock as of December
31 of the prior year (the 2% Limit). The 2% Limit
may be increased up to 3% in any year, with a corresponding
reduction in the number of shares available in later years. The
Committee elected to increase the shares available for equity
awards during 2009 to 3% of the number of issued shares as of
December 31, 2008 in order to accommodate the planned
awards, for the reasons noted above.
Even after increasing the 2% Limit to 3%, however, there were
still not enough shares available under the 2008 Plan to provide
recipients with the full value of the annual equity compensation
awards and the 2009 Incentive Grants. Consequently, the annual
Performance Unit and stock option grants were reduced by 24% and
the planned 2009 Incentive Grants were reduced by varying
amounts. The equity-based awards for Messrs. Mulally and
Ford were not similarly reduced. The Committee made this
decision for several reasons, including:
|
|
|
|
|
All of the annual Performance Unit grants and the 2009 Incentive
Grants for Messrs. Ford and Mulally are performance-based
meaning that a significant amount of their 2009 equity-based
compensation is at risk. Consequently, the Committee believed it
appropriate that they have more upside reward if performance
metrics are met or exceeded. In contrast, the 2009 Incentive
Grants for other officers consisted of time-based Restricted
Stock Units.
|
|
|
|
Messrs. Ford and Mulally each took a 30% reduction is
salary.
|
|
|
|
In Mr. Fords case, he has not received any salary,
bonus, or other awards since May 2005 (see Named Executive
Officers on
pp. 37-38).
|
A. 2009
Incentive Grants
As noted in the Executive Summary on p. 32, we
took several compensation actions to reduce costs and conserve
cash during 2009 in response to economic and industry
conditions, including emphasizing equity compensation. In
addition to the annual grants of Performance Units and stock
options discussed below, the Committee granted incentive equity
awards in March 2009 to certain executives, including
Messrs. Mulally, Ford and Fleming (see Grants of Plan-based
Awards in 2009 Table on p. 57). In structuring the grants,
the Committee gave due consideration to the reduction of cash
compensation with the cancellation of merit increases to salary
and the Incentive Bonus Plan for 2009. Messrs. Booth and
Fields did not participate in the 2009 Incentive Grants because
of
41
their participation in the Senior Executive Retention Program
(see Equity-Based Compensation B. Senior
Executive Retention Program on p. 42).
Mr. Fleming received a time-based Restricted Stock Unit
grant that has a two year restriction period.
Messrs. Mulally and Ford received grants of Performance
Units that have a two year performance period. The performance
metric is an acceleration of the ONE Ford Plan to restructure
our business as measured by a reduction in global Ford brand
platforms in 2009 and 2010 from 25 platforms to 23 platforms. At
the conclusion of the two-year performance period, the Committee
will assess performance against this metric and will grant Final
Awards, if any, in unrestricted common stock. As noted,
Mr. Ford will receive the Final Award, if earned, only at
such time as the Committee determines that the Company has
achieved full-year global Automotive profitability, excluding
special items.
B. Senior
Executive Retention Program
In response to Mr. Mulallys strategic priority of
working together effectively as one team working toward one
goal, the Committee decided to settle an equity incentive
program initiated for certain executives in March 2006 and
replace it with a new program emphasizing teamwork and the
accomplishment of strategic goals. The consideration for
settling the program was a cash payment made to participants
based on actual and expected achievement of certain goals during
the
2006-2008
performance period. Messrs. Booth and Fields received such
payouts for 2006 performance.
To continue to provide a significant retention element and
incentive to work together effectively as one team to accomplish
key initiatives, the Committee decided to grant to certain
senior executives, including Messrs. Booth and Fields,
additional stock options as well as Performance Units in March
2007. The award opportunity for each participant was valued at
eight times base salary and reinforces the importance of
accomplishing our key strategic goals. In addition, the
Committee believes an opportunity of this size serves as a
strong retention incentive for key executives that have been
identified as critical in the drive to accomplish our ONE Ford
objectives.
We reduced the award opportunity for Messrs. Booth and
Fields by the amount of their cash payout for the settled
program referred to above. In 2007, the value of the net amount
of the award opportunity for these executives was awarded 50% in
stock options and 50% in Performance Units, consistent with the
mix of the annual equity grant. See footnote 2 of the Grants of
Plan-Based Awards in 2009 Table on pp. 57-58 for a description
of the terms and conditions of the Performance Unit portion of
this award opportunity.
For the performance against the 2009 target goals, refer to the
2009 Performance Unit Performance Results Table on
p. 46. The extent to which Restricted Stock Units were earned
and paid out for each business unit is indicated in the far
right hand column of the above referenced table.
C. Annual
Performance Unit and Stock Option Grants
As was done in 2008, in 2009, the Committee continued the annual
equity-based incentive program for the Named Executives by
granting two types of equity-based compensation: stock options
and Performance Units (see Grants of Plan-Based Awards in 2009
Table and related footnotes on pp. 57-58). The Committee awarded
50% of the value of each executives annual equity award in
stock options and 50% in Performance Units.
In general, the total value of these grants in 2009 was
determined based on the following considerations:
|
|
|
|
|
job responsibilities and expected role in our long-term
performance;
|
|
|
|
retention needs;
|
|
|
|
historical share allocations;
|
|
|
|
the value of equity-based grants granted to the executive in the
prior year; and
|
|
|
|
the total number of equity-based grants awarded to our employees.
|
42
The stock options vest over three years, have a ten-year term,
and function as our longest-term incentive. The Committee
believes this focuses executive behavior and decision making on
our long-term interests and aligns the interests of our
executives with those of our shareholders. The Performance Units
are awarded based on a one-year performance period, but are paid
out in service-based Restricted Stock Units, which vest over a
two-year period, providing an additional retention incentive. In
granting the Performance Units, the Committee chose a one-year
performance period in order to focus executive behavior on
achieving key short-term business objectives. The two-year
restriction period, however, adds an intermediate element that
serves to retain executives and focus their behavior beyond the
initial one-year performance period. In addition, because
executive decisions regarding such matters as product
development, marketing, sales, and the like, can affect our
performance over several years, the Committee believes it is
important to structure equity-based awards so that executives
will focus on the long-term consequences of their decisions.
This also further aligns executive interests with your interests
as shareholders.
The target awards for 2009 Performance Unit grants for the Named
Executives are shown in column (h) of the Grants of
Plan-Based Awards Table in 2009 on p. 57. These amounts
represent the maximum award opportunity. Payouts could range
from 0% to 100% of the target award depending on performance.
The Committee has discretion to decrease, but not increase, an
award for Named Executives.
In 2009, for Named Executives whose primary responsibilities
involved a particular business unit, the Committee set a formula
that was based on metrics that took into account Company and
relevant business unit performance as follows:
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|
|
|
|
total company pre-tax profits;
|
|
|
|
total Automotive operating-related cash flow;*
|
|
|
|
relevant business unit pre-tax profits;
|
|
|
|
relevant business unit cost performance;
|
|
|
|
relevant business unit market share; and
|
|
|
|
relevant business unit quality.
|
The Committee determined that this structure best took into
account Company as well as individual performance for those
Named Executives responsible for specific business units.
Those Named Executives whose duties are of a global nature were
placed in the Corporate business unit. For these
executives, the performance metrics used for 2009 were the
following:
|
|
|
|
|
total company pre-tax profits;
|
|
|
|
total Automotive operating-related cash flow;*
|
|
|
|
total cost performance;
|
|
|
|
a weighted average of all business unit market share
performance; and
|
|
|
|
a weighted average of all business unit quality performance.
|
The Committee chose these metrics because they supported our key
2009 objectives identified as top priorities for the year (see
How We Determine Compensation B. ONE
Ford on p. 35). The formula has a sliding scale,
based on various levels of achievement for each metric. If
certain performance levels are not met for all metrics, the
payout would be zero.
*We
define total Automotive operating-related cash flow as
automotive pre-tax profits (excluding special items as detailed
in Fords Annual Report on
Form 10-K
for the year ended December 31, 2009) adjusted for the
following:
|
|
|
|
|
less: capital spending (additional cash outflow);
|
43
|
|
|
|
|
add back: depreciation and amortization (non-cash expense);
|
|
|
|
add/deduct: changes in receivables, inventory, and trade
payables; and
|
|
|
|
other primarily expense and timing differences.
|
The following are excluded in the total Automotive
operating-related cash flow:
|
|
|
|
|
pension plan contributions;
|
|
|
|
employee separation payments; and
|
|
|
|
tax payments from affiliates.
|
The Named Executives who participated in the 2009 Performance
Unit program and their respective business unit are as follows:
|
|
|
Named Executive
|
|
Business Unit
|
|
Alan Mulally
|
|
Corporate
|
L. W. K. Booth
|
|
Corporate
|
William Clay Ford, Jr.
|
|
Corporate
|
Mark Fields
|
|
The Americas
|
John Fleming
|
|
Ford of Europe (50%) Volvo (50%)
|
44
For the business units in which Named Executives participated,
the following table shows the performance metric, weighting, and
the target for each metric.
2009
Performance Unit Metrics, Weightings, and Targets
|
|
|
|
|
|
|
|
|
|
|
Performance Metric
|
|
|
% Weighting
|
|
|
2009 Target
|
Global PBT* ($ Millions)
|
|
|
|
|
|
|
|
$
|
(6,300
|
)
|
Corporate
|
|
|
|
55
|
%
|
|
|
|
|
|
The Americas
|
|
|
|
40
|
%
|
|
|
|
|
|
Ford of Europe
|
|
|
|
40
|
%
|
|
|
|
|
|
Volvo
|
|
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Unit PBT*
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
The Americas ($ Millions)
|
|
|
|
15
|
%
|
|
|
$
|
(3,146
|
)
|
Ford of Europe ($ Millions)
|
|
|
|
15
|
%
|
|
|
$
|
133
|
|
Volvo ($ Millions)
|
|
|
|
15
|
%
|
|
|
$
|
(537
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total Automotive Operating-Related Cash Flow*
($ Billions)
|
|
|
|
20
|
%
|
|
|
$
|
(4.621
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cost Performance*
|
|
|
|
8.33
|
%
|
|
|
|
|
|
Corporate ($ Millions)
|
|
|
|
|
|
|
|
$
|
2,180
|
|
The Americas ($ Millions)
|
|
|
|
|
|
|
|
$
|
636
|
|
Ford of Europe ($ Millions)
|
|
|
|
|
|
|
|
$
|
703
|
|
Volvo ($ Millions)
|
|
|
|
|
|
|
|
$
|
641
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Share
|
|
|
|
8.33
|
%
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
****
|
|
The Americas**
|
|
|
|
|
|
|
|
|
**
|
|
Ford of Europe
|
|
|
|
|
|
|
|
|
8.8
|
%
|
Volvo
|
|
|
|
|
|
|
|
|
0.559
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Quality ***
|
|
|
|
8.33
|
%
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
|
Things-Gone-Wrong % YOY Improvement (50)%
|
|
|
|
|
|
|
|
|
****
|
|
Warranty Spending % YOY Improvement (50)%
|
|
|
|
|
|
|
|
|
****
|
|
The Americas
|
|
|
|
|
|
|
|
|
|
|
Things-Gone-Wrong % YOY Improvement (50)%
|
|
|
|
|
|
|
|
|
11.0
|
%
|
Warranty Spending % YOY Improvement (50)%
|
|
|
|
|
|
|
|
|
2.3
|
%
|
Ford of Europe
|
|
|
|
|
|
|
|
|
|
|
Things-Gone-Wrong % YOY Improvement (50)%
|
|
|
|
|
|
|
|
|
3.9
|
%
|
Warranty Spending % YOY Improvement (50)%
|
|
|
|
|
|
|
|
|
3.2
|
%
|
Volvo
|
|
|
|
|
|
|
|
|
|
|
Things-Gone-Wrong % YOY Improvement (50)%
|
|
|
|
|
|
|
|
|
18.0
|
%
|
Warranty Spending % YOY Improvement (50)%
|
|
|
|
|
|
|
|
|
(6.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
45
|
|
|
* |
|
Excludes special items as detailed in Fords Annual Report
on Form 10-K
for the year ended December 31, 2009. |
|
** |
|
The Market Share metric for the Americas was comprised of the
following targets: US (Retail as a percentage of Retail) 12.1%;
Canada (Retail & Fleet) 13.3%; Mexico
(Retail & Fleet) 11.3%; and South America
(Retail & Fleet) 10.6%. The Committee focused the
US Market Share metric on the retail percent of the overall
retail market because: (i) it was considered the best
measurement of the acceptance of our products by
US consumers; and (ii) our decision to de-emphasize
fleet sales in the US. The weightings for each region within the
Americas business unit were based on the planned net revenues of
the relevant region. The weightings were as follows:
US 65.32%; Canada 8.28%;
Mexico 5.74%; and South America 20.66%. |
|
*** |
|
The Quality metrics for the relevant business units were
developed from our Warranty Spending data and industry survey
data that measured Things-Gone-Wrong. To better understand the
Quality metrics, we show the targets as the
year-over-year
improvement to be achieved. The actual targets for the
Things-Gone-Wrong metrics were the number of Things-Gone-Wrong
for each relevant business unit and, in some cases,
sub-business
units. The Warranty Spending targets had a similar design.
Because showing the actual metrics would be unwieldy and not
enhance your understanding of the target to be achieved, we have
translated the Things-Gone-Wrong and Warranty Spending targets
into
year-over-year
improvement targets for each relevant business unit. |
|
**** |
|
The Corporate business unit did not have a formal target for the
Market Share and Quality metrics. Instead, performance for the
Corporate Market Share and Quality metrics was a weighted
average of the other business units market share and
quality performance. The weightings for Corporate Market Share
and Quality metrics were as follows: The Americas
47.8%; Ford of Europe 33.4%; Volvo
13.9%; and Asia Pacific and Africa 4.9%. These
weightings were based on the planned net revenues of the
relevant business units for 2009. |
The table below shows the performance results for each metric
for each business unit and the total performance results against
the metrics for 2009. The Committee reviewed Fords
performance for 2009 against the goals. Based on this
performance, the Committee determined the percentage of each of
the six performance goals achieved and the percent of the target
award earned for each business unit in which a Named Executive
participated (see column (h) of Grants of Plan-Based Awards
in 2009 Table and footnote 2 on pp. 57-58).
2009 Performance
Unit Performance Results
(% of Target Achieved)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Results
|
Business
|
|
|
Global
|
|
|
Business
|
|
|
Total Auto.
|
|
|
Cost
|
|
|
Market
|
|
|
|
|
|
(Total % of
|
Unit
|
|
|
PBT
|
|
|
Unit PBT
|
|
|
Op.-Rel. Cash Flow
|
|
|
Performance
|
|
|
Share
|
|
|
Quality*
|
|
|
Target Achieved)
|
Corporate
|
|
|
|
100
|
%
|
|
|
|
N/A
|
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
72
|
%
|
|
|
|
70
|
%
|
|
|
|
95
|
%
|
The Americas
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
79
|
%
|
|
|
|
86
|
%
|
|
|
|
97
|
%
|
Europe
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
50
|
%
|
|
|
|
96
|
%
|
Volvo
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
0
|
%
|
|
|
|
76
|
%
|
|
|
|
90
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*The Performance Results column for the Quality metric shows the
combined percent achieved for the Things-Gone-Wrong target and
Warranty Spending target, weighted equally as shown in the 2009
Performance Unit Metrics, Weightings, and Targets Table on
p. 45. Although the performance results were less than
100%, our quality improved
year-over-year
and, in general, indicates industry-leading quality levels.
In its discretion, the Committee determined not to reduce
payouts in recognition of the following: (i) the Named
Executives made substantial progress in accelerating our ONE
Ford Plan; (ii) Final Awards of Restricted Stock Units do
not have an adverse impact on our cash flow in the current
period; (iii) the two-year restriction period of the
Restricted Stock Units serves as a retention tool; (iv) the
two-year restriction period focuses executive behavior on our
longer-term interests; and (v) Final Awards of Restricted
Stock Units align executive interests with yours.
46
D. Timing
of Awards
Annual grants of equity awards are typically determined at a
February Compensation Committee meeting. At that time, data for
previous performance periods are available to determine the
amount of the Final Awards. The Committee also decides the
effective date of the annual equity-based grants of options and
Performance Units. Due to administrative complexity relating to
valuation and notification, the Committee approved the annual
2010 equity-based Final Awards and grants on February 25, 2010,
and the Board approved an effective date of March 3, 2010. A
similar practice was also followed for the 2009 annual
equity-based Final Awards and grants. The release of earnings
information for the prior fiscal year is sufficiently in advance
of the annual grant date for the public to be aware of the
information.
The Committee does not time equity grant dates to affect the
value of compensation either positively or negatively. Executive
officers did not play a role in the selection of the grant
dates. Special grants, whether approved by the Compensation
Committee for officers or the Long-Term Incentive Compensation
Award Committee for non-officers, are effective either on a
specified future date (e.g., a date that coincides with a
promotion or hiring date, or quarterly grant date), or the date
of approval. In the case of an approval by written consent, the
grant date cannot be earlier than the date when the Committee
member approvals have been obtained. See Corporate
Governance Compensation Committee Operations at pp.
23-24 for more information on the Long-Term Incentive
Compensation Award Committee. For exercise prices of the 2009
option grants, see column (l) of the Grants of Plan-Based
Awards in 2009 Table on p. 57. Under the 2008 Long-Term
Incentive Plan, the terms of which were approved by you at the
2008 Annual Meeting, the exercise price of options will be the
closing price on the date of grant.
Stock Ownership
Goals
In 1994, the Compensation Committee created stock ownership
goals for executives at or above the Vice President level to
further align the interests of the executives with those of
shareholders. The following table shows the officer level and
respective ownership goal.
|
|
|
|
|
|
|
Ownership Goal
|
|
Officer Level
|
|
(% of salary)
|
|
|
Vice Presidents and Senior Vice Presidents
|
|
|
100
|
%
|
Group Vice Presidents
|
|
|
200
|
%
|
Executive Vice Presidents
|
|
|
300
|
%
|
Executive Chairman and President & CEO
|
|
|
500
|
%
|
Executives have five years from taking their position to achieve
their goal.
We review progress toward achievement of the ownership goals
periodically. All forms of stock ownership including
directly and indirectly owned shares of common stock, final
awards of stock equivalents or restricted stock units, and units
that are based on common stock count toward the
goal. As of March 3, 2010, all of the Named Executives
comply with the stock ownership goals.
Compensation
Programs for 2010
The following changes to our compensation and benefits program
were effective January 1, 2010:
|
|
|
|
|
Annual merit increases to salary, which will occur in April.
|
|
|
|
Company matching of employee contributions to 401(k) plans at a
rate of 3% of base salary ($0.60 for each dollar contributed, up
to 5% of base salary).
|
|
|
|
Suspension of 2010 enrollment in our Deferred Compensation Plan
due to low participation and high administrative complexity.
|
47
We believe that the programs mentioned above are reasonable and
appropriate given the progress of our ONE Ford Plan. As noted in
the Executive Summary on p. 32, in recent years
our employees experienced significant reductions in compensation
and benefits. In light of those reductions and our progress
during 2009, we believe the business can now better afford these
programs, which will assist in incentivizing and retaining our
employees.
In Equity Compensation on
pp. 40-41,
we explained that due to the 2008 Plans limit on shares
available for grant and Fords stock price on the date of
grant, we were not able to provide recipients with the
full-value of the equity compensation awards for the 2009 annual
equity grants and the 2009 Incentive Grants. In light of our
2009 performance and the rise in our stock price, the shares
available under the 2008 Plan are now sufficient to allow us to
award supplementary equity compensation grants in March 2010.
For current employees, recipients received equity grants that
approximated the value by which the recipients 2009 annual
equity grants
and/or 2009
Incentive Grants were reduced. Messrs. Mulally and Ford did
not receive any supplementary grants. In addition to the value
of their 2010 annual equity awards, Messrs. Booth, Fields,
and Fleming received stock options and Performance Units equal
in value to the reduction in value of their 2009 annual stock
award grants. Likewise, Mr. Fleming received additional
time-based Restricted Stock Units in March 2010 equal in value
to the reduction in value of his 2009 Incentive Grant.
In order to further implement our ONE Ford Plan objective of
working together effectively as one team, the Committee decided
that all officers will be assigned to the Corporate business
unit for purposes of the performance metrics under the 2010
annual Performance Unit grants. Additionally, the Committee
decided to decrease the global PBT metric weighting from 55% to
45% and increase the global Automotive operating-related cash
flow metric from 20% to 30% for the 2010 annual Performance Unit
program. This change reflects the continued importance and
emphasis on managing our cash.
Retirement
Plans
In general, we believe that the retirement plans described below
serve several worthwhile business purposes, including retaining
top leadership talent. In addition, they provide income security
to long serving executives, and provide flexibility to us in
transferring executives among our operations. We believe these
programs to be reasonable and appropriate in light of
competitive practices and our executives total
compensation program. For additional information, see the
Pension Benefits in 2009 Table on p. 63 and the
Nonqualified Deferred Compensation in 2009 Table on p. 65.
A. Pre-2004
Plans
Our General Retirement Plan (GRP) provides a
tax-qualified benefit for each year of non-contributory
participation by employees in the United States hired before
January 1, 2004, and added benefits for those who make
contributions. We also have two other non-qualified retirement
plans for certain employees: the Supplemental Executive
Retirement Plan (SERP) that provides a supplemental
monthly benefit calculated on a percentage of Final Average Pay
(0.2%-0.9%
depending on executive position) and service, and the Benefit
Equalization Plan
(GRP-BEP).
Under the GRP-BEP, eligible employees receive benefits
substantially equal to those they could have received under the
GRP but were not able to because of Internal Revenue Code
limitations. Messrs. Booth, Ford, Fields, and Fleming are
eligible for benefits under the GRP, SERP, and GRP-BEP.
Certain eligible executives who separate from employment after
age 55 (age 52 if retiring under our Select Retirement
Plan (SRP)) and prior to age 65 may be eligible
for monthly benefits under our Executive Separation Allowance
Plan (ESAP) that provides a percentage of salary,
based on age and service, at time of separation until
age 65. The SRP is a voluntary retirement program offered
from time-to-time for select U.S. management employees. In
2006 the Committee requested that its consultant, Semler Brossy
Consulting Group, LLC, and the Company jointly conduct a review
of the SRP as a severance vehicle. The review compared present
values of the SRP benefit with traditional severance packages,
examined potential changes, and considered benefits to the
Company and to executives. The
48
Committee reviewed the report and concluded that the SRP should
remain in its current form to facilitate the reduction in work
force then being undertaken by the Company and to provide
flexibility to accommodate any future reductions.
Benefits under SERP, SRP, ESAP, and GRP-BEP are not funded. In
addition, in accordance with Code Section 409A, benefits
that accrued or vested on or after January 1, 2005 under
these plans may not be paid to certain key executives until at
least six months following their separation from employment.
B. Post-January 1,
2004 Plan
Consistent with our Strategy Statement (see Executive
Summary A. Compensation Philosophy, Strategy, and
Guiding Principles on pp. 33-34) to develop benefit
programs that provide employees with income security and
protection from catastrophic loss while minimizing our long-term
liabilities, Ford adopted a tax qualified retirement plan, the
Ford Retirement Plan (FRP), for salaried employees
hired or rehired on or after January 1, 2004 in the
U.S. The FRP was adopted in order to provide us with more
predictable retirement benefit costs and reduced financial
statement volatility. These goals are achieved through a stable
contribution schedule and the transfer of financial and
demographic risks from us to plan participants while still
providing employees with the opportunity for adequate income in
retirement. Employees who participate in this plan, including
Mr. Mulally, are not eligible to participate in the GRP
(with respect to future service) GRP-BEP, SERP, or ESAP.
Perquisites and
Other Benefits
We provided certain perquisites and other benefits to senior
management in 2009, the most significant of which are summarized
below. The Committee periodically reviews our policies on
perquisites and other benefits. The cost of these perquisites
and other benefits, as applicable are included in column (i) of
the Summary Compensation Table on p. 53.
Personal Travel: As part of our efforts to
reduce costs and conserve cash, we decided to close our Air
Transportation operation in 2008. Company policy does not allow
Messrs. Mulally or Ford to fly commercially due to security
concerns. Consequently, the Company pays the charter costs of
their use of private aircraft for business and personal travel.
The families of Messrs. Mulally and Ford are allowed to
accompany them on trips when they travel on private aircraft. In
addition, the Company will pay the cost of coach-class
commercial aircraft flights for Mr. Mulallys family
when their travel is at his request.
Requiring Messrs. Mulally and Ford to use private aircraft
for all travel provides several benefits to Ford. First, the
policy is intended to ensure the personal safety of our
President and CEO and our Executive Chairman, both of whom
maintain significant public roles for Ford. Second, use of
private aircraft ensures their availability and maximizes the
time available for Ford business.
For retention purposes, the Company continues to pay the costs,
including first class commercial airfare, for personal travel
for Mr. Fields to and from his home in Florida.
Evaluation Vehicle Program: We maintain a
program that provides our officers with the use of two Company
vehicles free of charge. This program requires officers to
provide written evaluations on a variety of our vehicles,
providing important feedback on the design and quality of our
products.
Other Services: For certain executive
officers, including the Named Executives, we provide a home
security evaluation and security system. We also provide an
allowance to senior managers for financial counseling services
and estate planning. We pay for approximately 75% of the cost of
this service up to $7,500. The safety and security (personal and
financial) of our executives is critically important. We believe
the benefits of providing these programs outweigh the relatively
minor costs associated with them.
49
Tax Reimbursement: During 2009, the Committee
reviewed the Companys policy regarding tax
gross-ups
for executive perquisites. There are only two perquisites for
which tax
gross-ups
are available: (i) personal travel and (ii) temporary
living/relocation expenses. The total amount spent on tax
gross-ups
for 2008 for Named Executives was approximately $460,000, and
this amount decreased to $135,883 for 2009 due to less
relocation expense. The Committee decided not to change our tax
gross-up
policy for 2009. The rationale for maintaining the policy was
that the majority of the relatively low total amount spent on
gross-ups is
related to the use of private aircraft for personal travel,
which the Company requires for Messrs. Mulally and Ford. We
believe that the relatively small cost of providing this benefit
is far outweighed by the value of the benefit in helping to
attract and retain executive talent in a difficult business
environment.
Alan
Mulally
Effective September 1, 2006, we entered into an agreement
with Mr. Mulally relating to his hiring as President and
Chief Executive Officer. That agreement contained a change
in control provision that provides that if we terminate
Mr. Mulallys employment for reasons other than for
cause during the first five years of his employment or if there
is a change in control of the Company during the first five
years of his employment and he terminates his employment for
good reason, he will receive certain payments and benefits (see
Potential Payments Upon Termination or Change in Control
Alan Mulally on pp. 66-71). If Mr. Mulally
leaves us pursuant to these arrangements, he may not work for a
competitor for five years after the date of his termination.
Mr. Mulally will not be entitled to any severance payment
if he is terminated for cause.
The Committee believes these termination provisions are
reasonable. The sunset provision of five years is an appropriate
length of time to compensate Mr. Mulally to leave his prior
position at Boeing and assume a leadership role with a company
in the midst of a turnaround. The non-compete clause also
protects the Company from competitive harm should
Mr. Mulally separate from Ford under these conditions. In
addition, under a change in control scenario,
Mr. Mulallys employment either must be terminated or
he must terminate his employment for good reason in
order to receive the termination benefits.
Mr. Mulally also was granted the option to live in
temporary housing near the Companys headquarters for the
first two years of employment at Company expense. In September
2008, the Committee decided to continue this arrangement
indefinitely. The Committee believes the arrangement is
beneficial to Mr. Mulally and the Company by allowing him
to continue to focus on our ONE Ford Plan. The cost of this
benefit is included in column (i) of the Summary
Compensation Table on p. 53. He is eligible for relocation
assistance pursuant to our relocation program if he chooses to
relocate his household.
William Clay
Ford, Jr.
In Named Executive Officers on pp. 37-38, we
explained the compensation arrangement with Mr. Ford that
led to his being a Named Executive this year. Please refer to
footnote 1 to the Summary Compensation Table on p. 53 for an
explanation of the treatment of each element of
Mr. Fords compensation. The Committee believes this
arrangement is fair and reasonable in light of
Mr. Fords leadership of the Company, initially as CEO
during the early phases of our turnaround plan. He has continued
to provide valuable service in his role as Executive Chairman
and Chairman of the Board in partnering with the President and
CEO in setting Fords strategy, and to provide leadership
on Company-wide issues of sustainability and stakeholder
relationships. The 2008 change to Mr. Fords
compensation arrangement accomplishes the following:
(i) provides Mr. Ford reasonable compensation for his
efforts, if the Company returns to full-year global Automotive
profitability, excluding special items; (ii) preserves
Mr. Fords
50
pledge not to receive new compensation until the Company
achieves full-year global Automotive profitability, excluding
special items; and (iii) strongly links
Mr. Fords compensation with shareholder interests.
Tax and Other
Considerations
A. Internal
Revenue Code § 162(m)
Code Section 162(m) generally disallows Federal tax
deductions for compensation in excess of $1 million paid to
the Chief Executive Officer and the next three highest paid
officers (other than the Chief Financial Officer) whose
compensation is required to be reported in the Summary
Compensation Table of the proxy statement (Covered
Executives). Certain performance-based compensation is not
subject to this deduction limitation. In our case, this
exemption applies to certain awards under the Incentive Bonus
Plan, the 1998 Plan, and the 2008 Plan. Specifically, 2009
awards of stock options and Final Awards related to Performance
Units were not subject to the deduction limit. However, the
amount of the Final Award for Mr. Mulally that exceeded the
shareholder approved limit of 2.5 million Restricted Stock
Units and therefore are subject to the deduction limit.
In contrast to the 2009 stock option awards and the Final Awards
granted under Article 4 of the 2008 Plan, service-based
Restricted Stock Units awarded to Covered Executives in prior
years are subject to the deduction limit. Additionally, we
cannot deduct that portion of any Covered Executives
salary that is in excess of $1 million (see Summary
Compensation Table on p. 53), or the cost of any perquisites
provided to a Covered Executive whose salary exceeds
$1 million.
Generally, we strive to maximize the tax deductibility of our
compensation arrangements. In the highly competitive market for
talent, however, we believe the Committee needs flexibility in
designing compensation that will attract and retain talented
executives and provide special incentives to promote various
corporate objectives. Furthermore, as noted in
Equity-Based Compensation on pp. 40-41, the
Committee responded to the adverse economic environment by
emphasizing performance-based equity compensation in order to
help achieve the 2009 objectives of our ONE Ford Plan. The
Committee, therefore, retains discretion to award compensation
that is not fully tax deductible.
B. Internal
Revenue Code § 409A
Code Section 409A governs the timing for income inclusion
of amounts deferred under nonqualified deferred compensation
plans. If certain requirements are not met, employees are
subject to additional income taxes. Our supplemental retirement
plans, severance arrangements, and other nonqualified deferred
compensation plans presently meet these requirements. As a
result, employees generally will be taxed when deferred
compensation is received. We will be entitled to a tax deduction
at that time.
C. Internal
Revenue Code § 280G
Code Section 280G disallows a companys tax deduction
for excess parachute payments. Additionally, Code
Section 4999 imposes a 20% excise tax on any person who
receives excess parachute payments. Presently, only
Mr. Mulally is entitled to payments upon termination of his
employment following a change in control of the Company which
may qualify as excess parachute payments.
Accordingly, our tax deduction for any such excess parachute
payments would be disallowed under Code Section 280G. Not
all of the payments to which Mr. Mulally may become
entitled upon a change in control would be excess parachute
payments. None of the other Named Executives has a
change-in-control
provision.
51
Compensation
Committee Report
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis (CD&A) with
management. Based on this review and discussion, the Committee
recommended to the Board of Directors that the CD&A be
included in this Proxy Statement and incorporated by reference
into our annual report on
Form 10-K.
Compensation Committee
Richard A. Manoogian (Chair)
Anthony F. Earley, Jr.
Ellen R. Marram
John L. Thornton
Compensation
Committee Interlocks and Insider Participation
The Compensation Committee is comprised of Anthony F.
Earley, Jr., Richard A. Manoogian, Ellen R. Marram, and
John L. Thornton, none of whom is an employee or a current or
former officer of the Company.
52
Compensation of
Executive Officers
The table below shows the before-tax compensation for Alan
Mulally, who served as President and CEO during 2009, L. W. K.
Booth, who served as Executive Vice President and Chief
Financial Officer during 2009, and the three most highly
compensated executive officers at the end of 2009.
SUMMARY
COMPENSATION TABLE
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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(i)
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(j)
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Change in
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Pension
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Value and
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Nonqualified
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Non-Equity
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Deferred
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Name and
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Principal
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Salary
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Bonus(2)
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Awards(3)
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Awards(3)
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Compensation(4)
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Earnings(5)
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Compensation(6)
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Total
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Position
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Year
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($)
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($)
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($)
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($)
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($)
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($)
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($)
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($)
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Alan Mulally
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2009
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1,400,003
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0
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10,974,782
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5,050,000
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0
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491,869
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17,916,654
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President and Chief
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2008
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2,000,000
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0
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4,491,462
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9,437,376
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0
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1,046,390
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16,975,228
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Executive Officer
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2007
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2,000,000
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4,006,154
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5,678,933
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5,999,999
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2,993,846
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1,441,763
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22,120,695
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L. W. K. Booth
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2009
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1,200,000
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0
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345,493
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760,000
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0
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1,382,493
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138,201
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3,826,187
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Executive Vice
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2008
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1,075,000
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0
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1,386,994
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999,999
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0
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1,700,527
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291,880
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5,454,400
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President and Chief Financial Officer
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2007
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868,133
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526,923
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1,465,473
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3,314,995
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1,723,077
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1,845,517
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329,376
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10,073,494
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William Clay Ford, Jr.(1)
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2009
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0
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0
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9,411,533
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5,066,200
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0
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616,374
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1,740,167
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16,834,274
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Executive Chairman
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Mark Fields
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2009
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1,300,000
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0
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609,579
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760,000
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0
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1,217,680
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93,994
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3,981,253
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Executive Vice
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2008
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1,300,000
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0
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1,649,437
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999,999
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0
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536,070
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161,867
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4,647,373
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President and
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2007
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1,255,634
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711,538
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2,032,894
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4,714,496
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2,138,462
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457,458
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439,567
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11,750,049
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President The
Americas
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John Fleming
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2009
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750,000
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0
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1,004,842
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570,000
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0
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1,332,269
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195,307
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3,852,418
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Executive Vice President Global Manufacturing & Labor
Affairs and Chairman Ford of Europe
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|
|
|
|
|
|
|
|
|
Notes
(1)As
noted in the Compensation Discussion and
Analysis Named Executive Officers on
pp. 37-38,
Mr. Ford has agreed to forego new compensation (including
salary, bonus, and other awards) until such time as the
Compensation Committee determines that the Companys global
Automotive sector has achieved full-year profitability,
excluding special items. It was further agreed that the
compensation Mr. Ford would have received beginning in 2008
and future years, but for the agreement to continue to forego
new compensation, will be earned and paid when the Committee
determines that the Companys global Automotive sector has
achieved full-year profitability, excluding special items.
Beginning in 2008, the following table describes the elements of
Mr. Fords compensation and the
53
expected treatment of each element when the Committee determines
the conditions for payment have been met. Amounts will be
determined annually and approved by the Committee.
|
|
|
|
Element
|
|
|
Treatment
|
Base Salary
|
|
|
Will be paid in a single lump sum
payment retroactively to January 1, 2008.
|
|
|
|
Thereafter, would be paid monthly
according to usual business/payroll practices.
|
|
|
|
|
Incentive Bonus
|
|
|
Actual award will be based on the
Committees determination of Company and individual
performance when the Committee determines the conditions for
payment have been met.
|
|
|
|
|
Stock Option Grant
|
|
|
Starting with the 2009 annual option
grant, such grants are made in accordance with the
Companys annual option grant process with an exercise
price determined as the fair market value on the date of grant
as determined by the Committee.
|
|
|
|
The grant will vest upon the occurrence
of the later of the normal 3 year vesting schedule and the
Committee determining that the Companys global Automotive
sector has achieved full-year profitability, excluding special
items. The options will have a 10-year term commencing on the
grant date, regardless of whether the options ever vest.
|
|
|
|
The annual 2008 option grant will be
treated under the previous arrangement outlined below.
|
|
|
|
|
Performance Units
|
|
|
Final Award will be based on the
Committee-approved performance metrics used for annual
Performance Unit grants.
|
|
|
|
The Final Award of Restricted Stock
Units will be made when the Committee determines the conditions
for payment have been met and be based on the Committees
determination of Company and individual performance.
|
|
|
|
The Final Award will be subject to the
normal 2-year restriction period.
|
|
|
|
|
In March 2009, the Committee determined the treatment of
Mr. Fords stock option grants. Under the previous
arrangement, Mr. Ford would have received stock options
with a
10-year term
that vested over three years from the date of grant with a
strike price equal to the fair market value of Ford common stock
on the date of grant. The date of grant would be on, or after,
the date the Committee determined that the Companys global
Automotive sector achieved full-year profitability, excluding
special items. The Committee recognized that this method failed
to take into account stock price appreciation that may occur if
the Company returns to full-year global Automotive
profitability, excluding special items, and, consequently,
adopted the method outlined in the above table. This structure
incentivizes Mr. Ford to achieve stock price appreciation
even though he would not realize the benefits of that
appreciation until the full-year profitability metric is
achieved.
(2)The
amounts shown for 2007 reflect bonus awards paid in 2008 for
2007 performance.
(3)The
amounts shown in columns (e) and (f) reflect the aggregate
grant date fair value computed in accordance with FASB ASC
Topic 718 for stock-based and option awards for each of the
Named Executives for the years ended December 31, 2007,
2008, and 2009 (if required to be included in the Summary
Compensation Table). The assumptions for the 2009 calculations
can be found at footnote 21 to our audited financial
statements in Fords Annual Report on
Form 10-K
for the year ended December 31, 2009. The assumptions used
for the 2008 calculations can be found at footnote 17 to our
audited financial statements in Fords Annual Report on
Form 10-K
for the year ended December 31, 2008. The assumptions used
for the 2007 calculations can be found at footnote 17 to
our audited financial statements in Fords Annual Report on
Form 10-K
for the year ended December 31, 2007. Pursuant to SEC
rules, we disregarded the estimate of forfeitures related to
service-based vesting conditions.
54
Included in the amounts shown in column (e) are the grant
date values of certain awards that are subject to performance
conditions. Pursuant to SEC rules, the grant date values shown
above are reported based upon the probable outcome of such
conditions as of the date of grant. The table below shows the
value of such awards at the grant date assuming that the highest
level of performance is achieved.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
Awards
|
Named Executive Officer
|
|
|
Year
|
|
|
($)
|
Alan Mulally
|
|
|
|
2009
|
|
|
|
|
21,511,222
|
|
|
|
|
|
2008
|
|
|
|
|
5,204,475
|
|
|
|
|
|
2007
|
|
|
|
|
6,309,926
|
|
|
|
|
|
|
|
|
|
|
|
|
L. W. K. Booth
|
|
|
|
2009
|
|
|
|
|
1,393,116
|
|
|
|
|
|
2008
|
|
|
|
|
1,607,177
|
|
|
|
|
|
2007
|
|
|
|
|
1,628,303
|
|
|
|
|
|
|
|
|
|
|
|
|
William Clay Ford, Jr.
|
|
|
|
2009
|
|
|
|
|
13,234,400
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Fields
|
|
|
|
2009
|
|
|
|
|
1,539,341
|
|
|
|
|
|
2008
|
|
|
|
|
1,911,282
|
|
|
|
|
|
2007
|
|
|
|
|
2,258,771
|
|
|
|
|
|
|
|
|
|
|
|
|
John Fleming*
|
|
|
|
2009
|
|
|
|
|
802,652
|
|
|
|
|
|
|
|
|
|
|
|
|
*The amount shown in column (e) for Mr. Fleming
includes an award that did not have a performance condition (see
footnote 3 of Grants of Plan-Based Awards in 2009 Table on
p. 58).
(4)The
amounts shown in column (g) for 2007 reflect awards earned
by certain Named Executives under the Incentive Bonus Plan.
(5)The
amounts shown reflect the increase in the actuarial present
value of accrued pension benefits under various Company plans.
For 2009, the accrued pension benefits are measured from
December 31, 2008 to December 31, 2009; for 2008, the
accrued pension benefits are measured from December 31,
2007 to December 31, 2008; and for 2007 the accrued pension
benefits are measured from December 31, 2006 to
December 31, 2007. See the Pension Benefits in 2009 Table
on p. 63 for additional information, including the present
value assumptions used in these calculations. No Named Executive
received preferential or above-market earnings on deferred
compensation.
(6)The
following table summarizes the amounts shown in column
(i) for 2009.
All Other
Compensation in 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Other
|
|
|
|
|
|
|
|
|
|
|
|
Contributions to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
|
|
|
|
Tax
|
|
|
|
Insurance
|
|
|
|
Retirement and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits(i)
|
|
|
|
Reimbursements
|
|
|
|
Premiums(ii)
|
|
|
|
401(k)
Plans(iii)
|
|
|
|
Other(iv)
|
|
|
|
Total
|
|
Name
|
|
|
Year
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
Alan Mulally
|
|
|
|
2009
|
|
|
|
|
304,756
|
|
|
|
|
84,972
|
|
|
|
|
24,385
|
|
|
|
|
13,475
|
|
|
|
|
64,281
|
|
|
|
|
491,869
|
|
L. W. K. Booth
|
|
|
|
2009
|
|
|
|
|
119,069
|
|
|
|
|
0
|
|
|
|
|
18,223
|
|
|
|
|
0
|
|
|
|
|
909
|
|
|
|
|
138,201
|
|
William Clay Ford, Jr.
|
|
|
|
2009
|
|
|
|
|
1,708,302
|
|
|
|
|
25,271
|
|
|
|
|
6,594
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
1,740,167
|
|
Mark Fields
|
|
|
|
2009
|
|
|
|
|
64,957
|
|
|
|
|
25,640
|
|
|
|
|
3,397
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
93,994
|
|
John Fleming
|
|
|
|
2009
|
|
|
|
|
149,268
|
|
|
|
|
0
|
|
|
|
|
5,749
|
|
|
|
|
0
|
|
|
|
|
40,290
|
|
|
|
|
195,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)For a
description of perquisites relating to personal use of company
aircraft, our evaluation vehicle program, and security and other
services for Named Executives, see Compensation Discussion
and Analysis Perquisites and Other Benefits on
pp. 49-50.
Other perquisites and personal benefits whose incremental cost
is included in the amounts shown (unless indicated) consist of
the following: personal use of Company phone cards and cell
phones, personal use of car and driver service, personal use of
Company season tickets to athletic events,* personal use of
55
Company club memberships,* annual executive health exams, fuel
and car washes related to the evaluation vehicles, and temporary
housing and relocation expenses.
*Indicates no incremental cost to the Company because these
benefits are primarily for business use and when the executive
uses such benefit for personal use, the executive pays for any
costs other than season ticket
and/or
annual club membership costs.
Amounts for the Named Executives include the incremental costs
to the Company for providing certain perquisites and other
benefits during 2009. For Mr. Mulally, the amount shown
includes $127,699 for personal use of private aircraft, $43,447
for security, and $94,623 for temporary housing. For
Mr. Booth, the amount shown includes $86,497 for costs
associated with his international service assignment, including
relocation, temporary housing, lodging, and meals during
relocation. For Mr. Ford the amount shown includes $438,419
for personal use of Company and private aircraft, and $1,191,457
for security. For Mr. Fields the amount shown includes
$27,514 as the actual cost of first class commercial airfare for
personal travel to and from his home in Florida. For
Mr. Fleming, the amount shown includes $126,010 for costs
associated with his international service assignment, including
home leave travel, temporary housing, and lodging.
During 2009, for use of private aircraft, we use the actual
costs incurred. We calculated the aggregate incremental cost of
security, relocation and temporary housing expenses as the
actual cost incurred to provide these benefits. We calculated
the aggregate incremental cost of providing the evaluation
vehicles by estimating the lease fee for a comparable vehicle
under our Management Lease Program. The lease fee under that
program takes into account the cost of using the vehicle,
maintenance, license, title and registration fees, and insurance.
(ii)Amounts
shown reflect the dollar value of premiums paid by the Company
equal in amount to 3 times an employees salary.
Employees may purchase additional life insurance and these
premiums are payroll deducted with no additional Company
contributions or cost.
(iii)The
amount shown for Mr. Mulally reflects contributions made to
his Ford Retirement Plan account (see Compensation
Discussion and Analysis Retirement Plans on
pp. 48-49).
Effective January 2009, the Company suspended matching
contributions to employee 401(k) accounts.
(iv)The
amount shown for Mr. Mulally primarily reflects Company
contributions to a nonqualified benefit equalization plan
related to the Ford Retirement Plan (see Nonqualified Deferred
Compensation in 2009 Table and footnotes 1 and 2 on
pp. 65-66).
Furthermore, the amounts for Messrs. Booth and Fleming
include various payments related to their international service
assignment, such as
cost-of-living
adjustments, tax preparation, and other payments associated with
his international service. These benefits are generally
available to any level of employee who is on an international
assignment.
56
Grants of
Plan-Based Awards in 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan
|
|
|
|
Estimated Future Payouts Under
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards(1)
|
|
|
|
Equity Incentive Plan
Awards(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
|
(g)
|
|
|
|
(h)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
|
|
(k)
|
|
|
|
(l)
|
|
|
|
(m)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
|
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
Option
|
|
|
|
Exercise
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
Awards:
|
|
|
|
of Base
|
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
Number of
|
|
|
|
Price of
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Shares
|
|
|
|
Securities
|
|
|
|
Option
|
|
|
|
Stock and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
|
Underlying
|
|
|
|
Awards
|
|
|
|
Option
|
|
|
|
|
|
|
Grant
|
|
|
|
Approval
|
|
|
|
Threshold
|
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
Threshold
|
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
or Units
|
|
|
|
Options
|
|
|
|
Date
|
|
|
|
Awards
|
|
|
|
Name
|
|
|
Date
|
|
|
|
Date
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
(#)
|
|
|
|
(#)
|
|
|
|
(#)
|
|
|
|
#(3)
|
|
|
|
(#)(4)
|
|
|
|
($/Sh)(5)
|
|
|
|
($)(6)
|
|
|
|
Alan Mulally
|
|
|
|
3/30/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,076,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,474,783
|
|
|
|
|
|
|
|
3/11/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,826,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,499,999
|
|
|
|
|
|
|
|
3/11/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000,000
|
|
|
|
|
1.96
|
|
|
|
|
5,050,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L. W. K. Booth
|
|
|
|
3/30/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
387,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
265,411
|
|
|
|
|
|
|
|
3/30/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,082
|
|
|
|
|
|
|
|
3/11/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
752,475
|
|
|
|
|
1.96
|
|
|
|
|
760,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William Clay Ford, Jr.
|
|
|
|
3/27/2009
|
|
|
|
|
3/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,790,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,260,733
|
|
|
|
|
|
|
|
3/27/2009
|
|
|
|
|
3/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,870,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,150,800
|
|
|
|
|
|
|
|
3/27/2009
|
|
|
|
|
3/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,470,000
|
|
|
|
|
2.84
|
|
|
|
|
5,066,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Fields
|
|
|
|
3/30/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
387,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
423,801
|
|
|
|
|
|
|
|
3/30/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
169,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
185,778
|
|
|
|
|
|
|
|
3/11/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
752,475
|
|
|
|
|
1.96
|
|
|
|
|
760,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Fleming
|
|
|
|
3/30/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
290,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
254,842
|
|
|
|
|
|
|
|
3/11/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
382,653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
750,000
|
|
|
|
|
|
|
|
3/11/2009
|
|
|
|
|
2/25/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
564,356
|
|
|
|
|
1.96
|
|
|
|
|
570,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)In
March 2009, the Compensation Committee decided to cancel the
2009 Incentive Bonus Plan (see Compensation Discussion and
Analysis Executive Summary on p. 32 and
Compensation Discussion and Analysis Annual
Compensation B. Incentive Bonuses on p. 40).
Consequently, Threshold, Target, and Maximum awards are not
applicable for our Incentive Bonus Plan for 2009.
(2)The
first amount shown in column (h) for each of the Named
Executives reflect the target amount of annual Performance Units
grants for the 2009 performance period. The target amount of the
opportunity for 2009 performance was measured against the
metrics and weightings discussed in Compensation
Discussion and Analysis Equity-Based
Compensation C. Annual Performance Unit and Stock
Option Grants on pp.
42-47. The
Final Awards of Restricted Stock Units earned for 2009
performance have a two-year restriction period and will not pay
Dividend Equivalents during the restriction period, if dividends
are paid on common stock. No Dividend Equivalents were paid
during the 2009 performance period for this award opportunity.
Following the restriction period, shares of Ford common stock
will be issued, less shares withheld for tax withholding.
Mr. Ford will only receive the Final Award if the Committee
determines that the Company has achieved full year global
Automotive profitability, excluding special items.
For Messrs. Booth and Fields, the second amount shown in
column (h) reflects an award of Performance Units pursuant
to a Senior Executive Retention Program (see Compensation
Discussion and Analysis Equity
Compensation B. Senior Executive Retention
Program on p. 42). The value of the net amount of the
award opportunity was delivered 50% in stock options and 50% in
Performance Units. The stock option portion of the award was
delivered in 2007. The Performance Unit portion of the total
opportunity was divided equally among three one-year performance
periods, 2007, 2008 and 2009, and was valued on the initial
grant date of March 21, 2007. The 2009 portion of the grant
had the same metrics, targets, and weightings as the 2009 annual
Performance Unit grants for the 2009 performance period (see
Compensation Discussion and Analysis
Equity-Based Compensation C. Annual Performance Unit
and Stock Option Grants on p.
42-47). From
0% to 100% of each portion of the Performance Unit grant can be
earned based on performance during the respective performance
period. The Final Awards will be in the form of Restricted Stock
Units. No Dividend Equivalents will be paid during
57
the performance period or restriction period. Final Awards for
the 2007, 2008, and 2009 performance periods will have a three
year, two year, and one year restriction period, respectively.
Following the restriction periods, shares of Ford common stock
will be issued, less any shares withheld to cover tax
withholding.
For Messrs. Mulally and Ford, the second amount shown in
column (h) reflects an award of Performance Units pursuant
to the 2009 Incentive Grants program (see Compensation
Discussion and Analysis Equity
Compensation A. 2009 Incentive Grants on p.
41-42).
These Performance Units have a two year performance period, and
the performance metric is an acceleration of the ONE Ford Plan
to restructure our business as measured by a reduction in global
Ford brand platforms in 2009 and 2010 from 25 platforms to 23
platforms. At the conclusion of the two-year performance period,
the Committee will assess performance against this metric and
will grant Final Awards, if any, in unrestricted common stock.
No Dividend Equivalents will be paid during the performance
period. Mr. Ford will only receive the Final Award when the
Committee determines that the Company has achieved full year
global Automotive profitability, excluding special items.
(3)The
amount shown for Mr. Fleming represents a grant of
time-based Restricted Stock Units (see Compensation
Discussion and Analysis Equity-Based
Compensation A. 2009 Incentive Grants on
pp. 41-42).
These Restricted Stock Units have a two year restriction period.
No Dividend Equivalents will be paid during the restriction
period. Following the restriction period, shares of Ford common
stock will be issued, less any shares withheld to cover tax
withholding.
(4)The
amounts shown in column (k) represent
10-year
stock option grants. In general, 33% of each stock option grant
vests one year after the grant date, 33% after two years, and
34% after three years. Any unexercised options expire after ten
years. If a grantee retires, becomes disabled, or dies, his or
her options continue to be exercisable up to the normal
expiration date. In most other instances of employment
termination, all options generally end upon termination of
employment or are exercisable for a specified period. Options
are subject to certain conditions, including not engaging in
competitive activity. Options generally cannot be transferred
except through inheritance. In general, each grantee agrees to
remain a Ford employee for at least one year from the date of
the option grant. Mr. Fords option grant will vest on
the later of the normal three-year vesting period and the date
on which the Compensation Committee determines that the
Companys global Automotive sector has achieved full-year
profitability, excluding special items.
(5)The
exercise price of the options is the closing price of Ford
common stock traded on the NYSE on the effective date of the
grant (see Compensation Discussion and
Analysis Equity-Based Compensation D.
Timing of Awards on p. 47).
(6)The
amounts shown in column (m) represent the full grant date
value of each equity-based award shown in the table for each
Named Executive computed under FASB ASC Topic 718.
58
Outstanding
Equity Awards at 2009 Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
|
|
(a)
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
|
(g)
|
|
|
|
(h)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
Number of
|
|
|
|
Payout Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Value of
|
|
|
|
Unearned
|
|
|
|
of Unearned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
|
Shares or
|
|
|
|
Shares, Units
|
|
|
|
Shares, Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
|
|
Units of
|
|
|
|
Units of
|
|
|
|
or Other
|
|
|
|
or Other
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
Unexercised
|
|
|
|
Option
|
|
|
|
|
|
|
|
Stock That
|
|
|
|
Stock That
|
|
|
|
Rights That
|
|
|
|
Rights That
|
|
|
|
|
|
|
Underlying Unexercised
|
|
|
|
Unearned
|
|
|
|
Exercise
|
|
|
|
Option
|
|
|
|
Have Not
|
|
|
|
Have Not
|
|
|
|
Have Not
|
|
|
|
Have Not
|
|
|
|
|
|
|
Options (#)
|
|
|
|
Options(1)
|
|
|
|
Price
|
|
|
|
Expiration
|
|
|
|
Vested(3)
|
|
|
|
Vested(4)
|
|
|
|
Vested(5)
|
|
|
|
Vested(6)
|
|
|
|
Name
|
|
|
Exercisable
|
|
|
|
Unexercisable
|
|
|
|
(#)
|
|
|
|
($)
|
|
|
|
Date(2)
|
|
|
|
(#)
|
|
|
|
($)
|
|
|
|
(#)
|
|
|
|
($)
|
|
|
|
Alan Mulally
|
|
|
|
|
|
|
|
|
5,000,000
|
|
|
|
|
|
|
|
|
|
1.96
|
|
|
|
|
03/10/2019
|
|
|
|
|
851,235
|
|
|
|
|
8,512,350
|
|
|
|
|
8,903,060
|
|
|
|
|
89,030,600
|
|
|
|
|
|
|
|
1,175,220
|
|
|
|
|
2,386,054
|
|
|
|
|
|
|
|
|
|
6.14
|
|
|
|
|
03/04/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,109,243
|
|
|
|
|
571,429
|
|
|
|
|
|
|
|
|
|
7.55
|
|
|
|
|
03/04/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.28
|
|
|
|
|
08/31/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
|
|
|
8.28
|
|
|
|
|
08/31/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L. W. K. Booth
|
|
|
|
|
|
|
|
|
752,475
|
|
|
|
|
|
|
|
|
|
1.96
|
|
|
|
|
03/10/2019
|
|
|
|
|
236,219
|
|
|
|
|
2,362,190
|
|
|
|
|
504,752
|
|
|
|
|
5,047,520
|
|
|
|
|
|
|
|
124,528
|
|
|
|
|
252,830
|
|
|
|
|
|
|
|
|
|
6.14
|
|
|
|
|
03/04/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
612,855
|
|
|
|
|
315,715
|
|
|
|
|
|
|
|
|
|
7.55
|
|
|
|
|
03/04/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.83
|
|
|
|
|
03/09/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.49
|
|
|
|
|
03/10/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.26
|
|
|
|
|
03/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.55
|
|
|
|
|
03/18/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.91
|
|
|
|
|
03/14/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24.49
|
|
|
|
|
06/28/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30.19
|
|
|
|
|
03/08/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.73
|
|
|
|
|
03/09/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William Clay Ford, Jr.
|
|
|
|
|
|
|
|
|
3,470,000
|
|
|
|
|
|
|
|
|
|
2.84
|
|
|
|
|
03/26/2019
|
|
|
|
|
2,568
|
|
|
|
|
25,680
|
|
|
|
|
4,660,000
|
|
|
|
|
46,600,000
|
|
|
|
|
|
|
|
1,685,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.49
|
|
|
|
|
03/10/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,587,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.49
|
|
|
|
|
01/04/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.98
|
|
|
|
|
12/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.78
|
|
|
|
|
09/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
107,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.09
|
|
|
|
|
06/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.40
|
|
|
|
|
03/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,360,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.82
|
|
|
|
|
01/02/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.44
|
|
|
|
|
12/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.68
|
|
|
|
|
09/29/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.12
|
|
|
|
|
06/27/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.42
|
|
|
|
|
03/27/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.13
|
|
|
|
|
01/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.36
|
|
|
|
|
01/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Fields
|
|
|
|
|
|
|
|
|
752,475
|
|
|
|
|
|
|
|
|
|
1.96
|
|
|
|
|
03/10/2019
|
|
|
|
|
305,492
|
|
|
|
|
3,054,920
|
|
|
|
|
557,732
|
|
|
|
|
5,577,320
|
|
|
|
|
|
|
|
124,528
|
|
|
|
|
252,830
|
|
|
|
|
|
|
|
|
|
6.14
|
|
|
|
|
03/04/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
871,586
|
|
|
|
|
449,001
|
|
|
|
|
|
|
|
|
|
7.55
|
|
|
|
|
03/04/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.83
|
|
|
|
|
03/09/2016
|
& |