Ford Motor Co. Executive Chairman Bill Ford, great grandson of company founder Henry Ford, sold 3.5 million shares of common stock for total proceeds of $28.4 million, the company said in a regulatory filing today.
Bill Ford sold some of the shares to pay down personal debt he took on in 2005, when he acquired options for stock to show his faith in the company’s future. He sold about half of the 3.5 million shares for $22.7 million. The other 1.77 million shares were options he exercised and sold for $23 million, netting $5.7 million.
The board’s compensation committee voted to release $4.2 million of salary from the past two years and seven months that had been deferred until the company’s automotive operations were profitable, said Mark Truby, a spokesman. Now Bill Ford is cashing in some of his equity holdings to draw some cash.
“Don’t forget that the company hasn’t been paying dividends,” said Joe Phillippi, principal of AutoTrends Inc., a consulting firm in Short Hills, New Jersey. “It’s not surprising that he wanted to take a little money off the table.”
In 2005, when company profits were sinking, Bill Ford told employees that he would forgo any compensation until the company returned to profitability. He then personally borrowed money to buy about $14 million in stock options.
Ford Motor made $2.7 billion last year and $4.7 billion in the first half of this year, its most profitable first half in more than a decade. It had lost $30.1 billion from 2006 through 2008.
Ford rose 6 cents, or 0.5 percent, to $13.04 a share at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 30 percent this year.
Bill Ford wrote in a note sent to employees today that the compensation committee for Ford’s board decided that the company was profitable enough to reinstate his pay.
Separately, Bill Ford donated $1 million in stock to the William Clay Ford Jr. Scholarship Program, according to the filing.
He also traded 750,000 shares of common stock for Class B super-voting shares held by the Ford family, which maintains 40 percent of the vote.
Separately, Edsel Ford, a director and cousin of Bill Ford, sold 179,000 Class A shares worth $2.34 million, the company said in another filing.