WILMINGTON, Del. - Ford Motor Co. shareholders yesterday approved the company's request to issue shares of common stock to help pay some of its health-care obligations to retired autoworkers.
At the automaker's annual meeting in Delaware, more than 95 percent of shareholders voted to authorize the issuance of stock that Ford could use to pay up to 50 percent of its future cash obligations to its Voluntary Employee Beneficiary Association, or VEBA, the health-care trust for retired autoworkers and their families.
Shareholders also granted Ford authority to issue stock to new VEBA, which would be considered an affiliate of the company, to satisfy a 2008 agreement with the United Auto Workers regarding funding of retiree health care. Under the agreement, the new VEBA would be responsible for providing retiree health benefits to current and former UAW-represented workers.
Neither proposal received any comment from shareholders, who in other balloting soundly rejected a "say-on-pay" proposal giving shareholders an advisory vote on executive compensation.
The company owes $13.1 billion to its VEBA by 2022, of which $6.5 billion can be paid in stock, cash, or a combination. In March, UAW members approved a new contract that, besides freezing wages and cutting benefits, allows Ford to use stock to make payments to the retiree health-care trust.
On Monday, Ford disclosed a public offering of 300 million shares of common stock that will help it fund the VEBA, which is owed $6.3 billion by the end of this year.
The offer, which Ford said netted $1.6 billion, was a first for the 105-year-old company, which went public in 1956. Ford also granted the underwriters a 30-day option to purchase another 45 million shares, which they exercised.39.74023 -75.55084 ERROR: Template storyimage.ldo not found in theme default for section Automotive!
Ford Motor Co. shareholders Thursday approved the company's request to issue shares of common stock to help pay some of its health-care obligations to retired autoworkers.