Ford Motor Co. will pay a bonus to Chief Executive Officer Alan Mulally after his employment ends as reward for leading the second-largest U.S. automaker through its turnaround.
The payment will be based on Ford’s contributions to Mulally’s company retirement and benefit equalization plans, the Dearborn, Michigan-based company said today in a regulatory filing. Ford reported net income of $5.67 billion for 2012 and its shares climbed 20 percent, outpacing the Standard & Poor’s 500 Index’s 13 percent rise.
The agreement for the payment was dated Feb. 13 and is “a clarification of a prior agreement,” Jay Cooney, a company spokesman, said in an interview. “Nothing has changed.” No amounts were disclosed in the accord.
Ford reclaimed investment-grade credit ratings and paid out its first dividend since 2006 on the strength of its namesake brand, the only vehicle line to top 2 million U.S. sales last year. Mulally, 67, has instituted a global product development plan called One Ford to boost profits by selling the same models globally, rather than different versions for various regions.
Ford has earned $35.2 billion the past four years after losing $30.1 billion from 2006 through 2008. Executive Chairman Bill Ford elevated Mark Fields to chief operating officer in December from president of the Americas, positioning the 23-year veteran of the company to succeed Mulally after 2014.
The shares fell 0.2 percent to $12.99 at the close in New York.
Mulally’s compensation for 2012, including salary and benefits, will be revealed later this year in the company’s proxy statement. Ford rewarded Mulally with stock worth $58.3 million in March of last year and $56.6 million a year earlier.
Ford also provided some detail on the Venezuelan government’s Feb. 8 decision to devalue its currency to an exchange rate of 6.3 bolivars to the U.S. dollar and the effect that move will have on the automaker’s operations in the country.
Ford had $620 million in net monetary assets denominated in Venezuelan bolivars as of the end of last year, according to today’s filing. Ford would have recorded a translation loss of about $200 million in its year-end financial statements had the devaluation occurred before the end of last year, the company said.
“Our ability to obtain funds at the official exchange rate has been limited,” Ford said in the filing. “Continuing restrictions on the foreign currency exchange market could affect our Venezuelan operations’ ability to pay obligations denominated in U.S. dollars as well as our ability to benefit from those operations.”
The automaker also reported that North American automotive employment increased to 80,000 at the end of 2012 from 75,000 a year earlier. South American jobs rose to 17,000 from 16,000 while Europe, where industry sales reached a 19-year-low in 2012, fell to 46,000 from 47,000. Total Ford employment increased 4.3 percent to 171,000.
Rising demand for F-Series pickups in Ford’s home market paced a record $8.34 billion annual pretax profit for the company’s operations in North America, which countered overseas losses.
The North American results also will lead to profit sharing of about $8,300 on average to Ford’s 45,300 hourly workers represented by the United Auto Workers union, a record payout that will occur next month. General Motors Co., the largest U.S. automaker, is paying its hourly workers as much as $6,750, while Chrysler Group LLC’s will get about $2,250.
Ford began paying a quarterly dividend of 5 cents a share in March of last year and moved last month to double the payout. Moody’s Investors Service raised Ford to investment grade in May after Fitch Ratings lifted the company to the status in April. Standard & Poor’s ranks Ford’s debt BB+, the highest level of speculative grade, with a positive outlook.