By Nora Eckert
DETROIT, Feb 11 (Reuters) – Ford Motor CEO Jim Farley told employees in a town hall on Wednesday that companywide bonuses would be set to 130%, according to four people familiar with the matter, as the automaker delivered on its goal to improve vehicle quality.
Farley told attendees that the higher payouts are mainly due to the automaker’s improved initial vehicle quality, which measures repairs in the first 90 days of ownership. Farley said the metric is the best it has been in a decade, two of the people said.
Companywide bonuses at Ford are based on a set of metrics it establishes each year. These define the baseline amount for which all salaried workers are eligible, with a figure of above 100% denoting that the company exceeded those metrics. Individual performance can increase or decrease that amount. The bonuses apply to Ford’s global salaried workforce, which includes approximately 75,000 workers.
The automaker ties its employee compensation to key metrics such as quality and financial performance, objectives that are reassessed every year. In 2023, the payouts were set to 84% and in 2024 they were set to 69%. The company’s goals included EV sales and growth of vehicle connected services, such as software subscriptions, at that time.
The goals have not been publicly disclosed for 2025, but they are roughly the same as in 2024, according to a person familiar with the matter.
In what was described as an uncharacteristically upbeat town hall, Farley said the bonuses would be an investment in workers to deliver on the company’s goals, including its path to 8% EBIT margin by 2029.
The Dearborn, Michigan, automaker has for years struggled with numerous vehicle recalls and hefty warranty costs. In 2025, its recall tally hit an industry record. Farley has said recalls will increase in the short term as Ford roots out problems, and points to initial quality as a more reliable metric to reflect whether the company’s efforts are paying off.
Ford on Tuesday reported fourth-quarter earnings that missed analyst expectations, and full-year core profit that missed its guidance, largely due to complications from a fire at an aluminum supplier, as well as last-minute changes on tariff relief from the Trump Administration.
Ford shares were up 0.8% at $13.68 at midday on Wednesday.
The automaker’s stock has increased about 47% over the past year. Shares of cross-town rival General Motors’ have soared about 72% in the same period to around $80. Stellantis stock took a beating last week after a massive EV writedown, and its price is down about 42% for the last year, to about $7 a share.
(Reporting by Nora Eckert in Detroit; Editing by Mike Colias, Chizu Nomiyama and Matthew Lewis)
Comments