Ford Executive's Ouster Cost Him $6.2 Million in Unvested Shares

(Bloomberg) -- Getting ousted from Ford Motor Co. for “inappropriate behavior” will cost Raj Nair millions, the automaker revealed in a filing.

Nair, forced out as head of North American operations, will forgo performance bonuses for last year and this year as part of his separation agreement. He will also give up a series of stock awards, including grants he could have received for performance from 2015 to 2017, the filing shows. Nair will forfeit unvested restricted shares worth at least $6.2 million as of Wednesday’s close in New York, according to data compiled by Bloomberg.

Acting on a recent anonymous tip, Ford disclosed on Wednesday it had investigated Nair and found he engaged in behavior “inconsistent with the company’s code of conduct.” The automaker has not specified what actions caused one of its top executives to immediately leave the company. Ford on Thursday replaced Nair with Kumar Galhotra, who had been chief marketing officer and head of the Lincoln luxury brand.

Nair, 53, was among a handful of top Ford executives who last year received a retention bonus valued at $5 million if he stayed through the end of the decade. He will still receive retirement and health-care benefits from Ford, according to the filing with the U.S. Securities and Exchange Commission. It didn’t specify the size of his pension or how long the company-paid medical benefits will last.

In exchange for those benefits, Nair signed away his right to sue the company and agreed to “cooperate with any future company investigations and litigation,” the filing said. Nair also agreed to not take a job with a competing company for two years.

--With assistance from Jenn Zhao

To contact the reporters on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net, Anders Melin in New York at amelin3@bloomberg.net.

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Anne Riley Moffat

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