Ford COO Spends Almost Entire Salary Buying $1 Million in Stock
(Bloomberg) -- Ford Motor Co. Chief Operating Officer Jim Farley spent the equivalent of almost his entire 2019 salary to purchase $1 million of stock in a show of confidence in the automaker’s recovery prospects.
Farley, 57, earned $1.1 million in salary as part of a compensation package that totaled $8.36 million last year when he was president of Ford’s new business, technology and strategy. He was promoted to COO on March 1 in a management shakeup that included the abrupt departure of his chief rival, Joe Hinrichs.
Farley purchased 194,950 shares at an average price of $5.13 on April 30, according to regulatory filing Monday. The transaction increased his direct share ownership by 31% to 828,922. The stock is down 47% this year.
The carmaker has made clear that Farley is heir apparent to Chief Executive Officer Jim Hackett, 65, who has struggled to institute a sweeping $11 billion reorganization. Before the coronavirus closed Ford’s factories, Farley pledged to accelerate a turnaround at a company that has seen profits decline for three consecutive years.
“Everyone at Ford knows the situation we’re in,” Farley said February 26 at a Wolfe Research conference in New York. “I can see it on the faces of my colleagues and it takes me back to about 10 years ago. I’ve seen that look before.”
Farley’s challenges have only grown since. With North American factories shut since mid-March -- and no restart dates scheduled -- Ford is forecasting a $5 billion loss in the second quarter, following a $2 billion operating deficit in the first three months of the year. It burned through $8 billion in the first quarter, suspended its dividend, had its credit cut to junk and sold $8 billion in junk bonds.
Farley last week outlined how the company plans to resume production with safety protocols that include mandatory face masks, temperature checks, social distancing and closed common areas such as cafeterias. But he gave no timeline for reopening.
“We want to restart as soon as we can and do it safely,” Farley told reporters. “We’ve gone through so many things as a company for over 100 years, but this is really unprecedented.”
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