February 24, 2012
Ford will add $3.8 billion into pension plan 1
Ford is set to add a staggering $3.8 billion into their pension plan. Board members are set to receive a 25 per cent increase in annual compensation. Edsel Ford II, the great Grandson of the original Ford owner and a current Director and Consultant is set to receive a 29 per cent pay increase.
Board members annual fee is set to increase from $200,000 to $250,000. Edsel Ford will get a pay rise of $150,000, from $500,000 to $650,000. Mr Ford has been working with the company since 1999. This amount of consulting compensation is said to the first that he has received since the process had started. He had previously received cash for his consultation work compared to restricted stock in the latter part of 2010. Ford have profited greatly thanks to the efforts of Edsel Ford according to the company.
His other roles within the company include that of dealer relations, organising and taking part in education projects, being involved in motor sports events along with heritage events. The only other Ford family member working directly with the company at the moment is William Clay Ford Jr, a cousin of Edsel. He is the current chairman of the board.
The Ford family
The Ford family are still control of the company. They represent 40 % of board voting power at present.
This is a major turnaround since 2006. Back then, Ford had cut compensation by 50 per cent to an amount of $100,000. This was when Alan Mulally was hired as the companies CEO. At the time an investment of $23 billion was needed in order to turn the company’s fortunes around. Compensation was re-introduced back in 2010 to the amount of $200,000. Sixty per cent of all Director Compensation is placed into the common stock units of Ford.
Sources claim that the move was made for Ford to add to strengthen it’s pension plans as the stock market is currently very unpredictable. Interest rates have recently fallen. Ford want to hold 80 per cent of their pension fund assets in bonds, which is almost the double the 45 per cent figure recently.
For directors must either make more contributions or hope that the stock market gets better. 30 per cent of the pension fund was dedicated to stocks. A quarter of that goes into private equity, hedge funds and real estate. This figure is expected to be reduced down to 20 per cent in the upcoming years.