Ford raises pay of board, descendant Edsel II

SOUTHFIELD, Mich. -- Ford has boosted annual compensation for board members by 25 percent and will pay 29 percent more to Edsel Ford II, its founder's great-grandson, for his work as a director and consultant.

Ford, the second-largest U.S. automaker, will pay its board members an annual retainer of $250,000, up from $200,000, the Dearborn, Mich.-based automaker said in its annual report filed Tuesday with the U.S. Securities and Exchange Commission.

The SEC filing also showed that Ford will pump $3.8 billion into its global pension plans this year as it tries to get them closer to fully funding their obligations.

Ford said it will put $2 billion into the U.S. pension plan, make $350,000 in benefit payments, and put the remaining $1.45 billion into other plans across the globe. As of Dec. 31, the U.S. plan was $9.4 billion short of its obligations, while global plans, which include the United States, were short by $15.4 billion, the report said.

The company said it expects the global funds to be fully funded during the next few years based on long-term investments and company contributions.

The company said it gave its 16 directors a raise after finding out they were paid less than the median level paid at similar companies.

"We review all the compensation levels on a regular basis, and in the case of the board, determined this was needed to ensure we continue to attract and retain the talent we have," said Todd Nissen, a Ford spokesman.

Ford cut compensation to directors in half to $100,000 in 2006, when the company hired Alan Mulally as its chief executive officer and borrowed $23 billion to restructure its operations, Mr. Nissen said.

The board elected to forgo cash payments entirely in 2009, Mr. Nissen said. The compensation was re-established at $200,000 in 2010. Sixty percent of director compensation is deferred into Ford common stock units, the filing said.

Edsel Ford II, a director, also will receive $650,000 a year in cash as a consultant, up from $500,000.

Edsel Ford II, 63, has had a consulting contract with Ford Motor since 1999. The increase in Edsel Ford's consulting compensation is the first he's received since the arrangement began, Mr. Nissen said. The company began paying Edsel Ford's consulting fee in cash rather than restricted stock during the second half of 2010.

The company realized "substantial benefits" from Edsel Ford II's activities on its behalf, according to the filing. His services include dealer relations and representing the company through education projects, heritage events, and motor sports, Mr. Nissen said.

The founding Ford family still controls the company through a special class of stock that provides 40 percent voting power.

Bill Ford, Edsel Ford II's cousin, is executive chairman of the board. Bill Ford, 54, and Edsel Ford II are the only family members on the board.

The Associated Press contributed to this report.