(Adds Moody's report, details on Fields, company background)
By David Shepardson
May 24 Ford Motor Co said on Wednesday
that new Chief Executive James Hackett is eligible for at least
$13.4 million in total annual compensation.
Hackett, 62, a former chief executive of furniture
manufacturer Steelcase Inc, was named to replace CEO
Mark Fields on Monday.
Hackett will earn a $1.8 million annual salary, up from
$716,000 at his previous job as chairman of the Ford unit
developing self-driving cars and related projects.
He will receive $7 million in stock-based compensation and
pocket a $1 million bonus for becoming CEO. He is also eligible
for an annual bonus of up to $3.6 million, plus compensation
from his service at Ford's mobility unit.
Fields will retire from the company effective Aug. 1. He
resigned from the Ford board immediately. He will be eligible
for pro-rated incentive compensation through Aug. 1.
Fields will also be eligible for a company retirement
program, a voluntary separation program offered to some
In March, Ford said Fields received total compensation of
$22.1 million for 2016, up nearly 19 percent from $18.6 million.
Joe Hinrichs, head of the Americas since December 2012, who
was named on Monday to manage global product development,
manufacturing and labor affairs, purchasing, and environmental
and safety engineering, received a $5 million restricted
He received total compensation of $6.7 million in 2016.
Some of the compensation for Hackett will vest over three
years. Hackett was elected to Ford's board effective Friday.
Ford replaced Fields amid investor unease about the U.S.
automaker's slumping stock price and its ability to counter
threats from longtime rivals and Silicon Valley.
Moody's senior vice president Bruce Clark said in a research
note the announcement is credit negative and could reflect more
serious challenges than previously known. "The appointment of a
new CEO at Ford was unexpected and comes in the absence of any
major missteps by the company during recent years," he wrote.
Chairman Bill Ford Jr., whose family effectively controls
the U.S. No. 2 automaker, said on Monday he wanted Hackett to
speed up decision-making and cut costs, but did not elaborate on
how the new CEO should change operations.
Hackett said after discussing some management changes
announced Monday that "there's more to come later in the week
that will round out my team."
Ford last week announced plans to cut 1,400 white-collar
positions. It is expected to consider further
significant cost cuts in the next three to six months.
(Reporting by David Shepardson in Washington and Ankit Ajmera
in Bengaluru; Editing by Chris Reese and Matthew Lewis)