Jim Farley made $25.8 million in 2024. Ford Motor Company lost $7.4 billion in its electric vehicle division. The stock dropped roughly 20% over the course of the year. And now, the automaker is asking shareholders to approve the largest CEO compensation package in its 122-year history.
The disconnect is hard to ignore.
According to Ford’s proxy filing, Farley’s total compensation jumped from $19.6 million in 2023 to $25.8 million in 2024 — a 31% increase that makes him one of the highest-paid executives in the global auto industry. The package includes a base salary of $1.8 million, a cash bonus of $3.4 million, stock awards valued at $16.6 million, and other compensation totaling roughly $4 million, as reported by Yahoo Finance. That figure stands in stark contrast to the experience of Ford’s common shareholders, who watched their investment erode while General Motors shares climbed more than 50% over the same period.
Ford’s board, led by Executive Chairman Bill Ford, is framing the payout as a reward for strategic positioning — the kind of long-term thinking that doesn’t always show up in a single year’s stock chart. The company argues that Farley has restructured Ford into three distinct business units (Ford Blue for internal combustion, Ford Model e for electric vehicles, and Ford Pro for commercial vehicles), giving the company a clearer path to profitability in each segment. Ford Pro, in particular, has become a bright spot, generating strong margins on fleet vehicles and subscription-based software services.
But the numbers tell a more complicated story. Ford Model e posted an operating loss of $7.4 billion in 2024, building on a $4.7 billion loss in 2023. That’s more than $12 billion in red ink over two years from a single division. The company has scaled back its EV ambitions multiple times, delaying or canceling planned models as consumer demand for battery-electric vehicles softened. Meanwhile, warranty costs — a persistent headache under Farley’s watch — continued to eat into margins across the business. Ford spent approximately $5.2 billion on warranty claims in 2024, a figure that dwarfs most competitors.
So how does a board justify record pay against that backdrop?
The answer lies partly in how executive compensation is structured at Ford. A significant portion of Farley’s package is tied to performance-based stock units that vest over multiple years, meaning the board is betting that the strategic moves made in 2024 will pay off down the road. Ford’s compensation committee noted that Farley’s leadership on cost reduction — the company has targeted $2 billion in material cost savings — and the reorganization into separate business units were key factors in the pay decision. The proxy statement also cited Ford Pro’s 14% revenue growth and its expanding software and services business as evidence that Farley is building durable value.
Shareholders aren’t necessarily buying it. Proxy advisory firm Institutional Shareholder Services (ISS) recommended that Ford investors vote against the say-on-pay proposal at the company’s annual meeting, citing the misalignment between Farley’s compensation and total shareholder return. Glass Lewis, another influential proxy advisor, issued a similar recommendation. Both firms pointed out that Ford’s stock performance has lagged its peers significantly, making the size of the CEO’s package difficult to defend on a pay-for-performance basis.
This isn’t the first time Ford has faced a shareholder rebellion on executive pay. In 2023, roughly 66% of shareholders voted in favor of the company’s compensation plan — a passing grade, but well below the 90%-plus approval rates typical at large-cap companies. A result below 50% this year would be a stinging rebuke, though say-on-pay votes are advisory and non-binding. Ford’s board could, in theory, ignore the outcome entirely. Few boards do.
The broader context matters here. The auto industry is in a period of extraordinary capital expenditure and strategic uncertainty. Every major manufacturer is spending billions to electrify its lineup while simultaneously trying to keep its traditional business profitable. GM, Stellantis, Toyota — all are grappling with the same tension. But Ford’s execution has been notably rough. Quality issues have dogged new product launches. The F-150 Lightning, once a marquee EV, has seen production cuts. And the company’s decision to cancel a planned large electric SUV and pivot toward smaller, more affordable EVs suggests the original strategy was misjudged.
Farley has been candid about some of these missteps. In earnings calls, he’s acknowledged that Ford’s quality problems are unacceptable and that the EV business needs to reach profitability faster. He’s also pointed to Ford Pro as proof that his restructuring is working — the commercial division generated roughly $69 billion in revenue and posted operating margins that rival some of the best in the industry. His argument, essentially, is that Ford is a turnaround story in progress, and that judging the CEO’s compensation by a single year’s stock performance misses the point.
Wall Street is split. Analysts at Morgan Stanley have maintained a constructive view on Ford, arguing that Ford Pro alone could justify a higher valuation if the market starts to value it separately. Others are less generous. Analysts at Bernstein have questioned whether Ford’s cost structure is competitive enough to survive a prolonged EV transition, noting that the company’s breakeven point on electric vehicles remains far above current sales volumes.
There’s also the matter of peer comparison. Mary Barra, CEO of General Motors, earned approximately $28 million in 2023 — more than Farley’s prior-year package but against a backdrop of substantially better stock performance and stronger earnings. Carlos Tavares, who led Stellantis until his abrupt departure in late 2024, was among the highest-paid auto executives in the world, though his compensation drew fierce criticism from European investors and labor unions alike. In this context, Farley’s $25.8 million is high but not unprecedented. The question is whether Ford’s results merit it.
Recent developments haven’t made the board’s case any easier. President Trump’s escalating tariff regime on imported vehicles and auto parts has thrown yet another variable into Ford’s planning. The company warned in early 2025 that tariffs on components from Mexico, Canada, and China could add billions in costs, forcing potential price increases or further restructuring. Farley has lobbied publicly for tariff relief, arguing that the policy could undermine domestic manufacturing rather than support it. Ford paused shipments of certain vehicles from its plants in Mexico and Canada in response to the initial tariff announcements, a move that rattled investors.
And then there’s the stock. Ford shares have continued to struggle in 2025, trading near multi-year lows as the broader market digests tariff uncertainty, softer consumer demand, and rising input costs. For shareholders sitting on significant losses, approving a record pay package for the CEO feels counterintuitive at best. At worst, it looks like a board that’s lost touch with the people it’s supposed to represent.
Bill Ford, the executive chairman and great-grandson of founder Henry Ford, has publicly backed Farley’s strategy. The Ford family controls a special class of stock that gives them 40% of shareholder voting power despite owning a much smaller economic stake in the company. That dual-class structure means the family’s support effectively insulates management from the kind of activist pressure that might otherwise force a reckoning. It also means the say-on-pay vote, even if it fails, may not change much.
Still, optics matter. A failed say-on-pay vote would send a clear signal that institutional investors — pension funds, mutual funds, index funds — have lost patience. It could embolden activist shareholders to push for board changes or strategic alternatives. And it would add to the growing body of evidence that corporate America’s compensation machinery is increasingly disconnected from the outcomes experienced by ordinary shareholders.
Ford’s annual meeting is scheduled for later this spring. The company has not publicly commented on the ISS or Glass Lewis recommendations beyond its proxy filing, which lays out the board’s rationale in detail. In that document, the compensation committee writes that Farley’s leadership “has positioned Ford for long-term competitiveness” and that his pay reflects “the complexity and scope of the transformation underway.”
Maybe. But $25.8 million is a lot of money to pay for positioning. Shareholders tend to prefer results.
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