Part of the UAW chief Shawn Fain’s criticism of auto company practices is that the CEOs of these corporations make tens of millions of dollars. This is somewhat misleading because a portion of this pay is based on stock performance. Still, Ford CEO Jim Farley was paid $21 million in 2022, 281 times the median pay of Ford’s workers. Regardless of the details, the optics of such a large pay gap are bad.
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However, optics are barely the main issue compared to Farley’s missteps. He missed Ford’s expense expectations for the third quarter of 2022 by $1 billion because he miscalculated costs. The day after this earnings miss, Ford’s stock fell more than it had in 11 years.
Farley also raised the price of the F-150 Lightning, the company’s flagship EV, several times. Ford said the reason was unexpected changes in component prices. It is not something that should have happened to one of the largest manufacturers in the world.
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Ford’s stock price started 2022 at about $25. It ended the year at just above $12. Who wouldn’t like a payday for a similar performance? To make matters worse, Farley’s boss, Bill Ford, executive chairman, made $17.3 million in 2022. The union could argue that Ford has two CEOs who made nearly $40 million when taken together.
Farley made $20 million despite several fumbles. This does give the UAW substantial fuel for part of the rationale for its strike. Whatever else is said, Farley should be blamed in part for the UAW’s leverage. (These are CEOs of major companies who are paid 1,000 times more than their employees.)
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