Jim Farley

About Jim Farley

James D. Farley, Jr. (age 62) is President and Chief Executive Officer of Ford Motor Company and has served as a director since 2020; he became CEO on October 1, 2020 and added the role of President, Ford Model e, in March 2022 . Under his tenure, Ford reported record 2024 revenue of ~$185 billion (+5% y/y), Company adjusted EBIT of ~$10.2 billion, and adjusted EBIT margin of 5.5%; cumulative TSR declined 13% in 2024 as net income increased by $1.5 billion, reflecting mixed execution across quality and cost targets . Before joining Ford in November 2007, Farley spent 17 years in leadership positions at Toyota; he serves on The Business Council’s executive committee, indicating strong external networks relevant to industry transformation .

Past Roles

Organization	Role	Years	Strategic Impact
Ford Motor Company	President & CEO	Oct 2020–present	Leads Ford+ transformation; focused on digital/EV strategy; delivered record 2024 revenue and progress in software/services while facing quality and cost challenges .
Ford Motor Company	President, Ford Model e	Mar 2022–present	Drives EV and software initiatives central to Ford+ profitability and recurring revenue strategy .
Ford Motor Company	Chief Operating Officer	—	Oversaw global markets and operations including PD, Purchasing, Manufacturing, Quality, and AV partnerships; scale operational leadership .
Ford Motor Company	President, New Businesses, Technology & Strategy	—	Led strategic transformation toward higher growth/margins via smart, connected vehicles and experiences .
Ford Motor Company	EVP & President, Global Markets	—	Led global business units, Lincoln, Global Marketing & Sales, and EV strategy/business model development .
Ford Motor Company	EVP & President, Ford Europe, Middle East & Africa	2015–2017	Turnaround and regional leadership experience; underpins current international restructuring .
Ford Motor Company	EVP, Global Marketing, Sales & Service	—	Brand/commercial leadership across Ford’s portfolio .
Ford Motor Company	Group VP, Global Marketing and Canada/Mexico/South America	—	Regional P&L/marketing leadership in the Americas .
Toyota	Various leadership positions	~1990–2007	17-year track record at Toyota; deep industry grounding .

External Roles

Organization	Role	Years	Relevance
The Business Council	Member; Executive Committee	—	High-level policy/peer engagement supporting industry insights and influence .

Fixed Compensation

Year	Base Salary ($)	Target Bonus (% of Salary)	Actual Bonus Paid ($)	Notes
2024	1,700,000	200%	1,618,740	Business performance factor 69%; Farley assigned 69% individual performance factor; actual payout equals ~47.6% of target ($1.61874M ÷ $3.4M) .
2023	1,700,000	—	2,399,040	Prior year reference from SCT; program design similar, details in CD&A .
2022	1,700,000	—	2,754,000	Prior year reference from SCT .

Performance Compensation

Annual Performance Bonus Plan (2024)

Plan design metrics: Company Adjusted EBIT Margin; Quality (Repairs/1,000 in first 90 days); Global Electric Vehicle retail volume; Connected Services revenue .
Results: Business performance factor 69%; maximum opportunity 200% of target; final payouts reflect business factor and assigned individual performance factor (Farley: 69%) .

Metric	Weighting	Target	Actual/Assessment	Payout Linkage	Vesting/Timing
Company Adjusted EBIT Margin	Not disclosed	Not disclosed	2024 adjusted EBIT margin 5.5% (company-wide)	Included in 69% business factor	Cash bonus paid in 2025 for 2024 performance .
Quality (Repairs/1,000, 90 days)	Not disclosed	Not disclosed	Quality challenges largely drove lower business factor	Included in 69% business factor	Cash in 2025 .
Global EV Retail Volume	Not disclosed	Not disclosed	Best-ever global EV sales; retail volume fell short of targets	Included in 69% business factor	Cash in 2025 .
Connected Services Revenue	Not disclosed	Not disclosed	Progress in software/services; subscriptions up ~40% y/y; >50% gross margins cited at company level	Included in 69% business factor	Cash in 2025 .

Long-Term Incentive Plan (LTIP) – 2024 Grants

Structure: RSUs vest ratably over 3 years (33%/33%/34%); PSUs have 3-year performance period; 2024 PSU design is 100% three-year rTSR relative to a PSU peer group (modifier) .
Change-in-control: Double-trigger for equity; RSU/option vesting acceleration and treatment described in plan footnotes .

Grant Type	Grant Date	Target Units (#)	Grant Date Fair Value ($)	Key Terms
PSUs (2024 cycle)	3/4/2024	764,835	14,149,448	3-year performance; 100% rTSR weighting; payouts modulated; dividends accrue and pay in cash upon grant of final award .
RSUs (annual)	3/4/2024	509,890	6,495,999	Vest 33%/33%/34% over 3 years; dividend equivalents accrue/pay in cash on vest .
Annual Cash Target	2/23/2024 (approval)	—	Target $3,400,000	Non-equity incentive opportunity underpinning bonus plan .

Outstanding and Vesting Equity (as of 12/31/2024)

Instrument	Quantity	Terms/Price	Vesting/Expiry	Value Reference
Stock Options – exercisable	1,659,954	$6.96 strike	Expire 08/04/2030; vested 33%/33%/34% on 8/5/2021, 8/5/2022, 8/5/2023	In-the-money at $9.90 YE price; see company footnotes on option value methodology .
Unvested RSUs	959,670	—	Standard 33/33/34 schedule; certain retirement/CIC conditions apply	YE market value $9,500,733 at $9.90/sh .
Unearned PSUs (2022–2024 cycles at target basis)	2,026,109	—	3-year cycles; subject to performance and rTSR modifier	YE market/payout value $20,058,479 at $9.90/sh (target assumption) .
2024 Vesting Activity	1,878,887 vested	—	2024	Value realized on vesting $23,392,143 .

PSU Performance-to-Metrics Snapshot (as of 12/31/2024)

PSU Grant Year	Performance-to-Metrics (as of 12/31/24)
2022 Grant	79%
2023 Grant	0%
2024 Grant	150%

Equity Ownership & Alignment

Beneficial ownership: 5,680,305 shares of Ford common stock; options exercisable within 60 days to acquire 1,659,954 additional shares; no individual director/executive owned >0.14% of outstanding common stock as of Feb 1, 2025 .
Ownership guidelines and compliance: Officers have 5 years to meet guidelines; all Named Executives were compliant at 12/31/2024; Farley holds Ford stock worth more than 30x his base salary (based on Jan 31, 2025 closing price $10.08) .
Hedging/pledging: Hedging prohibited; pledging limited to shares in excess of guideline and subject to prior approvals; as of Feb 1, 2025, no director or executive officer had pledged shares .
Alignment: 2024 LTIP fully equity-based (PSUs, RSUs), with PSUs tied 100% to rTSR for 2024 grants; RSUs accrue dividend equivalents but pay only upon vest .

Employment Terms

Provision	Summary
Agreement reference	Employment Agreement (Exhibit 10‑O to 2024 10‑K) .
Severance (involuntary not for cause within 5 years of appointment)	One year base salary plus annual bonus target; removal of any outstanding vesting requirements on 2020 stock option grant; contingent on 2‑year non‑compete and waiver/release .
Change in Control (CIC)	Double-trigger: CIC plus resignation for “good reason” within protected period (2 years post‑CIC) triggers benefits; “good reason” includes pay reductions, failure to pay compensation, loss of incentive opportunities (below 80% of pre‑CIC), material diminution of responsibilities, or failure by successor to assume obligations; no duplicative payments—greater of overlapping benefits on item-by-item basis .
Termination Benefits (as of 12/31/2024)	Voluntary: $0; Retirement Eligible: $1,633,221; CIC: $29,996,671; Involuntary Not for Cause: $5,100,000; Death/Disability: $16,284,858 (assumptions as disclosed) .
Clawbacks	Incentive grants include clawback provisions; RSUs subject to clawback and forfeiture for non‑compete and inimical conduct .
Pensions	Farley does not participate in pension benefit plans (no change in pension value reported) .
Options/Equity CIC treatment	Double-trigger for equity grants; specific RSU/option treatment described, including immediate vesting in certain CIC scenarios if not replaced by comparable awards and six‑month minimum tenure met .

Board Governance

Board service and roles: Director since 2020; not assigned to Board committees (N/A); employee director (not independent) .
Leadership structure: Separate Chair (Executive Chair William Clay Ford, Jr.) and CEO; Lead Independent Director is John L. Thornton; independent committees (Audit, Compensation, Nominating) composed entirely of independent directors .
Governance policies: Annual say‑on‑pay; robust ownership guidelines; hedging prohibited and pledging limited; no option repricings; no options granted since 2020; double‑trigger CIC provisions for equity .

Compensation Structure Analysis

Mix and at-risk pay: Majority of Farley’s target total direct compensation is variable and equity-based; 2024 base salary unchanged; 2024 stock awards $20.65 million vs cash bonus $1.62 million—clear emphasis on long-term equity .
Metrics and rigor: 2024 bonus plan incorporated quality and growth levers (EV volume, connected services) alongside profitability (adjusted EBIT margin); business factor at 69% signals accountability on quality/cost; 2024 PSUs are 100% rTSR, reinforcing shareholder alignment but increasing exposure to market beta .
Equity program features: RSUs vest over 3 years (sell pressure potential around vest dates); PSUs have 3‑year cycles with performance-to-metrics snapshot showing variability (2022: 79%; 2023: 0%; 2024: 150% as of 12/31/24), introducing outcome dispersion across cycles .
Severance/change-in-control: Moderate cash severance (1x salary + target bonus), double-trigger CIC, and 2‑year non‑compete mitigate retention risk without excessive cash guarantees .

Performance & Track Record Highlights

2024 operating performance: Record revenue ~$185B (+5% y/y); adjusted EBIT ~$10.2B; adjusted EBIT margin 5.5% .
Quality and cost: “Three months in service” quality improved 21% since 2020; safety recalls reduced 45% between 2022–2024; nevertheless, quality/cost targets were missed in aggregate (business factor 69%) .
Strategic execution: Ford Pro revenue $67B (+15% y/y), EBIT ~$9B (13.5% margin); software/services 13% of Ford Pro EBIT; EV milestones delivered albeit retail shortfalls vs targets; growing paid software subscriptions (~865k; ~40% y/y) with >50% gross margins .
TSR context: Cumulative TSR fell 13% in 2024; pay-versus-performance discussion attributes swings in Compensation Actually Paid largely to stock price variability across 2020–2024 .

Compensation Peer Group, Say‑on‑Pay, and Committee

Peer group: December 2024 compensation survey peer group comprised 84 companies; retained certain industrial/defense names (3M, GE Aerospace, Honeywell, Northrop Grumman, General Dynamics) for key positions .
Say‑on‑pay: Company indicates compensation practices have been “consistently supported” by shareholders; engagement conducted during 2024 as programs evolved under Ford+ (percentages not specified) .
Compensation committee: Comprised entirely of independent directors (John C. May, Lynn Vojvodich Radakovich, John L. Thornton, John S. Weinberg); independent consultant retained annually .

Director Service Details (dual-role implications)

Item	Detail
Board Service	Director since 2020; employee director (non‑independent) .
Committees	None (N/A); only independent directors serve on Audit, Compensation, Nominating committees .
Chair/CEO Separation	Roles are separated; Executive Chair is William Clay Ford, Jr.; Lead Independent Director is John L. Thornton—mitigates CEO/Chair concentration concerns .
Independence/Conflicts	Independent committee structure and Lead Independent Director provide counterbalance to CEO’s board role .

Investment Implications

Alignment and retention: Farley’s ownership far exceeds guidelines (>30x salary), hedging prohibited, no pledging reported—strong alignment with shareholders and low governance red flags on stock use .
Incentive signals: 2024 bonus factor at 69% indicates emphasis on quality and profitability rigor; 2024 PSUs 100% rTSR heightens market-aligned pay outcomes; PSU performance dispersion across cycles (2022: 79%; 2023: 0%; 2024: 150% as of YE) suggests variable realized equity, supporting performance sensitivity .
Supply/technical overhang: RSUs vest on a 3‑year 33/33/34 cadence; 1.88M shares vested in 2024, creating periodic taxable events that can translate to selling pressure around vest dates, though there’s no evidence of pledging; sizable in-the-money options (2020 grant) also add potential event‑driven flows near expiries (2030) .
Risk controls: Moderate severance (1x salary + target bonus), double‑trigger CIC, two‑year non‑compete, and clawbacks suggest pay practices that balance retention with shareholder protections .
Execution watch‑items: Sustained quality improvements and cost reductions remain key to unlock incentive upside and support TSR; Ford Pro’s profitable growth and software monetization are positive levers under Farley’s strategy, while EV retail volumes and margin targets are ongoing hurdles to monitor .