According to media reports, multiple sources have revealed that some mid-level managers at Ford Motor Company will not receive stock bonuses this year. Internally, this move is seen as CEO Jim Farley's latest effort to cut excessive costs.
A person familiar with the discussions stated that out of Ford's 3,300 global mid-level managers, approximately 1,650 will not receive stock bonuses this year. Ford's stock awards are typically distributed in March, but senior management has instructed that only half of mid-level managers will be granted stock bonuses.
Sources indicated that Ford employees were informed of the changes in last week's company briefing, where they were told that the reduction in stock bonuses was performance-based. Some Ford employees view this decision as a form of downsizing and have started looking for job opportunities elsewhere.
Ford, however, stated that the change is intended to incentivize higher performance. A company spokesperson commented, "We are committed to fostering a high-performance culture that recognizes and rewards employees for their contributions to the business."
David Whiston, an analyst at investment advisory firm Morningstar, remarked in an email, "Compared to General Motors, Ford's profitability has consistently lagged, and Farley may see it as unacceptable to continue awarding stock bonuses to all mid-level managers."
He further added, "Given that this move specifically targets mid-level managers, it could be a strategy to encourage some of them to leave."
Stock bonuses are typically used by automakers as a talent retention tool and are part of Ford's performance-based compensation structure, which also includes cash incentives. These bonuses are awarded to all salaried employees across the company, with the majority being management personnel.
Additionally, three sources revealed that Ford has structured company-wide bonuses based on metrics such as vehicle quality, total annual earnings, and electric vehicle sales. In 2024, these factors accounted for 69% of the potential total bonuses.
The reduction in executive stock awards is not entirely unexpected, as Ford has been struggling to improve operational efficiency across both its loss-making EV division and its traditional internal combustion engine business. For years, Farley has reassured employees and Wall Street that Ford is undergoing significant transformations to become leaner and more competitive against U.S. rivals, Chinese automakers, and electric vehicle manufacturer Tesla.
Over the past year, Ford's stock price has dropped by approximately 23%, while its competitor General Motors has seen a 23% increase due to cost reductions and improved profitability.
At the same time, Ford and its competitors are dealing with uncertainties surrounding former U.S. President Donald Trump's trade policies. Farley has stated that these policies "add significant costs and create a lot of chaos." Trump's tariffs on imports from Mexico and Canada are set to take effect on March 1. While Ford's competitors may be more directly impacted, the company could still face a 25% tariff on vehicles imported from Mexico, including the Mustang Mach-E, Bronco Sport, and Maverick pickup truck.
