Starkman: Ford CEO Jim Farley's Obscene $21 Million Payday

April 04, 2023, 12:43 AM

The writer, a Los Angeles freelancer and former Detroit News business reporter, blogs at Starkman Approved. This column first appeared on his blog. 

By Eric Starkman

In the mid-80s when I was a reporter at the Detroit News, a former colleague named Matt Beer and I hatched an idea to start a feisty Motor City tabloid called the Detroit Sun. Tabloids thrive on sports and crime, and you’d be hard pressed to find a city with a more fertile combination than Motown. We modeled our tabloid after the Toronto Sun, which was launched years earlier by former reporters from the failed Toronto Telegram and achieved near instant success.

Ford CEO Jim Farley

What motivated Beer and I was the looming merger of the business operations of the Detroit Free Press and Detroit News, which were respectively owned by the giant newspaper chains Knight Ridder and Gannett. Beer and I had a low regard for the managements of these companies, and we correctly predicted that they’d still lose money even after getting a government exemption that effectively granted them a business monopoly. San Jose-based Knight Ridder and Virginia-based Gannett cared not one iota about Detroit, but Beer, who was a native, and I did.

The tabloid Beer and I envisioned would cover the auto industry, which in those days was even bigger and more powerful than today, with a critical vengeance. We regarded the top auto executives as being obscenely overpaid, and we thought the Free Press and News treated them with too much respect and deference. Beer and I were ahead of our time in that our business plan called for the hiring of a Black labor writer, who we thought would be more likely to share our outrage about gross automotive executive pay and the differential in wages paid to their blue-collar workers.  

Alas, Beer and I couldn’t raise the funding, and we both left Detroit. But I’ve long believed that the Detroit Sun could have achieved considerable success and made a meaningful difference in the lives of Metro Detroiters because we would have held local businesses and their leaders accountable. The local reporting on Ford CEO Jim Farley’s 2022 compensation reaffirmed my belief.

Here’s the headline the Free Press ran on its story:

Here’s the headline the News ran:

Farley’s 2022 compensation would have been the Detroit Sun’s cover story featuring his photo and this bold-typed banner headline:


Yes, that’s what Ford awarded Farley in 2022 compensation, a year in which the automaker lost $2 billion, issued a record 67 recalls, and its stock price lost about half its value. It was also a year of mounting lawsuits and crushing legal defeats, including a $1.7 billion punitive judgment a Georgia jury awarded after being presented with evidence that a farming couple died in a rollover crash involving a “Super Duty” pickup whose roof didn’t meet Ford’s internal safety standards, and a $105 million judgement for violating a contract and misusing trade secrets.

Ford in 2022 also agreed to pay a $19.2 million multistate settlement for lying about the real-world economy of its hybrids and the payload capacity of its Super Duty pickups.

Farley’s total compensation amounted to 281 times the $74,691 median annual total compensation of all Ford employees last year.

Let that sink in: 281 times the median annual compensation of all Ford employees. Admittedly that number is skewed by Ford steadily moving jobs to India and Mexico, where the company proudly assembles its electric Mustang and other vehicles with workers being paid near poverty wages.

American CEO compensation is obscene, but Farley’s comp is hardcore pornographic. I defy anyone to come up with legitimate metrics that would justify Farley receiving even half the compensation he was awarded. Ford noted in its federal regulatory filing that its executive salaries are compared with a corporate peer group of 72 companies, which is akin to Verizon justifying its abysmal customer service because it’s in line with rival telecom and cable companies.

What’s also appalling is that Farley’s compensation included $1.4 million for use of private aircraft and company vehicles. Multiple Detroit News readers who share my outrage noted that Farley’s spouse and family live in the UK, where his wife Lia sings and plays guitar in the band Winding Road.  Seems reasonable to speculate that some of the private jet use was for quick jaunts across the pond to say hello to loved ones. I’ve featured a link to one of Lia’s videos, which Farley himself tweeted.

Farley isn’t the first Ford CEO whose family opted not to live in Detroit. That would be Mark Fields, whose family remained in Florida when he occupied the corner office in Ford’s glass tower in Deaborn, MI. A furor ensued in 2007 when Ford disclosed in its proxy statement that Fields’ personal use of the corporate jet in his first three months on the job cost the company $214,479, representing a full-year expense of $900,000.

After Fields’ personal use of corporate plane was disclosed, he voluntarily agreed to fly commercial. Farley doesn’t appear imbued with that sense of honor.

A community suffers when CEOs and their families have no roots or ties to where their companies operate, and metro Detroit residents know this better than anyone.

In 2015, an Atlanta hospital executive named John Fox was appointed CEO of Beaumont Health, then the biggest hospital system serving the metro Detroit area. It’s uncertain whether Fox’s family ever relocated to Detroit, but its known that while he was under contract he bought a new home in Atlanta and another in North Carolina, where he owned a vacation home. The purchases made clear Fox wasn’t committed to Detroit. Two of Fox’s top lieutenants commuted from Atlanta, and one from Grand Rapids.

When Fox arrived, Beaumont’s flagship Royal Oak hospital in suburban Detroit was nationally respected, particularly for cardiology and orthopedics. But Fox’s aggressive cost cutting with the intent of selling the hospital system drove away dozens of top-notch surgeons and physicians, many of whom were lifelong Michiganders. Fox had no ties to Michigan, so he didn’t care.

To be sure, Connecticut-born Farley isn’t the only top auto executive passing through Motown. Arden Hoffman, who recently joined GM as the company’s “Chief People Officer,” cluelessly noted to that company’s embattled employees she was looking forward to spending time in Detroit while also enjoying outdoor passions at her homes in Montana and San Francisco.

Given that Ford enjoys billions in tax breaks from Congress and Michigan to support the development of electric vehicles and save the planet, using private corporate jets rather than flying commercial is a diss to environmentalists who genuinely care about the environment. But Ford has clearly demonstrated it has little regard for the concerns of environmentalists.

Ford disclosed last week it is investing in a $4.5 billion nickel processing facility in Indonesia in partnership with a communist China-based nickel refiner. Amid rumors that Tesla was negotiating to begin mining in Indonesia, dozens of nongovernment agencies (NGOs) published an open letter earlier this year urging Elon Musk to avoid Indonesia. The NGOs said that Indonesia nickel mining was causing increased deforestation and polluting rivers, lakes, and beaches.

Bloomberg recently reported that much of the aluminum in Ford’s electric F-150 pickup truck comes from a refinery in Brazil allegedly responsible for sickening thousands of people. As well, Ford is receiving $1.7 billion in Michigan tax breaks and other subsidies to build an electric battery plant on fertile farmland in a rural community where it isn’t welcome.

Multiple Detroit News readers noted that CEOs of Japan’s automakers, who with the exception of Nissan make quality vehicles of the sort that Ford could never imagine let alone achieve, make substantially less than their U.S. counterparts. I’ve seen online references that Toyota pays its top executive as little as $5 million.

I found this 2010 New York Times story which stated that the combined salaries of the president of Toyota Motor and the 38 members of its board had been smaller than the single salary of some top executives at car makers in the United States and elsewhere. The Times said Toyota docked the pay of its top management by 10 percent to “atone” for the company’s safety problems, which led to the recalls of more than nine million vehicles worldwide. Toyota’s then president, Akio Toyoda, and other top executives also forfeited bonuses for the second consecutive year.

To be fair, Farley in 2022 was forced to experience some atonement, as his 2021 compensation was $23 million. And while some of Ford’s issues predated his arrival, Ford’s quality control issues remain, as the company has already been forced to recall some of its latest models.

While the Detroit Free Press and the Detroit News were nonplussed by Farley’s compensation, many News readers expressed outrage in the comments section. I’ve copied and posted a few below, some of which are reflective of the great humor I’ve long appreciated in Michiganders. There are references to SNL’s famous Chris Farley, who was Jim Farley’s first cousin.

Farley reminds me of all the past Detroit Lion coaches of yesteryear. First impressions were like finally a leader. Then a few games later, Holy Smokes this coach can’t be this bad can he? Yes, they all were. YOU PEOPLE KNOW WHAT TO DO. Stop the bleeding.

Should be required to return $1/recalled vehicle. His salary would have been around $22.00.

Meanwhile, Toyota’s CEO was paid $4.5 million for the same period. Toyota is almost 5 times larger than Ford (Toyota market cap: $234 Billion. Ford market cap: $50 Billion). The cost of housing, goods and services in Japan are higher than those in the U.S. Their employees, both in the U.S. and Japan, are paid a comparable wage to Ford’s UAW employees.

Toyota’s CEO made $4.5 million last year. Their market cap is $234 Billion and Ford’s market cap is $50 Billion. Yeah, seems about right.

Farley would be overpaid if Ford BILLED him to come to the office. I hope he saved a few bucks because his end is obviously near.

And WHY is Ford Motor Company getting OUR TAX MONEY? I’m very disgusted at what goes on in Michigan! I can’t say what I really want to!

Hm. One of the guys saying we need EVs to save the planet is using a private jet for free. Is the jet electric? Or doesn’t he want to do his part to “save the planet”??

It has always been my dream to be a failed CEO of a large corporation.

I would contend that Chris Farley, even in his current state, would do a better job running Ford.

(Reference to Chris Farley skit): Remember that time when you guys built good cars people actually wanted to buy and drive? That was awesome!!

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