Bill Ford is doubling down on Ford shares, and quietly amassing more control of the company

1 week ago
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Incoming Ford CEO Jim Farley (left) and Ford Executive Chairman Bill Ford Jr. airs with a 2021 F-150 during an lawsuit Sept. 17, 2020 astatine the company's Michigan works that produces the pickup.

Michael Wayland | CNBC

DETROIT – Ford Motor Chair Bill Ford has been dilatory amassing much shares, and control, of the automaker his great-grandfather founded successful 1903.

Unlike Elon Musk and different CEOs who've precocious cashed retired immoderate of their institution banal arsenic prices soared, Ford has been doubling down connected his namesake institution implicit the past decade.

The 64-year-old is the company's biggest idiosyncratic shareholder with 2.3 cardinal shares of Ford's communal stock. More importantly, he's besides the biggest holder of the automaker's Class B shares that transportation super-voting powers that person allowed the Ford household to clasp power of the company. While the Class B shares relationship for 2% of Ford's outstanding stock, they power 40% of the voting power.

Bill Ford straight owns 16.1 million, oregon 23%, of the Class B shares, which are lone disposable to household members. That's quadruple the astir 4 million, oregon 5.7%, helium owned successful 2012, according to FactSet.

"I deliberation it's truly important that the household bequest continue. It gives america a look and possibly a humanity that a batch of different companies don't have."

From Satya Nadella astatine Microsoft to Jeff Bezos and Elon Musk, CEOs, founders and different institution insiders person been cashing successful their banal astatine the highest gait connected record. Ford's rising involvement successful the institution bucks a caller inclination by CEOs and firm insiders who sold a grounds $69 cardinal successful banal successful 2021, arsenic looming taxation hikes and lofty stock prices encouraged galore to instrumentality profits.

Ford, whose involvement has grown done his enactment arsenic president of the board, said he's holding connected to his shares due to the fact that of his "tremendous confidence" successful the company's absorption team, led by CEO Jim Farley, to present connected Farley's Ford+ turnaround plan focusing connected electrical and connected vehicles. He received $16 cardinal successful full compensation from Ford successful 2020, which came successful a premix of benefits, currency and equity awards.

Ford acquired 412,500 further Class B shares past period that are being held successful a household trust. The determination came astir a week aft helium acquired astir 2 cardinal communal shares of the institution by exercising banal options, immoderate of which were acceptable to expire.

Instead of cashing successful connected the $18 cardinal successful proceeds helium would person gotten from exercising the options similar astir executives do, Ford paid $20.5 cardinal successful currency arsenic good arsenic taxes connected the gains to clasp connected to the shares.

"I conscionable consciousness similar we are precise good positioned to present superior shareholder returns and I for 1 wanted to beryllium a large portion of that," Ford told CNBC. "I deliberation successful galore ways we person an accidental to make the astir worth for shareholders since the scaling of the Model T."

EVs

Unlike his predecessor, Farley has won capitalist assurance since taking implicit the helm successful October 2020. Shares of the automaker person surged by astir 270% since then, sending its marketplace worth supra $100 cardinal connected Thursday for the archetypal clip ever. 2020 marked the archetypal twelvemonth since 2001 that Ford's stock has topped $20 a share.

The banal closed Wednesday astatine $25.02 a share, with the company's marketplace worth astatine $99.99 billion. Ford's present worthy much than crosstown rival General Motors, which is valued astatine astir $90 billion.

Under Farley's Ford+ plan, the institution is pivoting hard to EVs, including the Mustang Mach E and all-electric Ford F-150, arsenic good arsenic connected services to make recurring revenue. The institution expects an 8% adjusted nett borderline earlier involvement and taxes successful 2023 — earlier than many analysts expected.

"The Mach-E and the Lightning, some their bid banks conscionable overwhelmed us," Ford said. "We're connected this electrification journey, but it's much than that. It's connecting to the customer, it's each the services that volition beryllium developed astir electrification."

Family shares

Ford straight owns astir 20.3 cardinal shares, including restricted, communal and Class B stock. The holdings, which whitethorn exclude immoderate trusts, are worthy much than $500 cardinal arsenic of Thursday's closing price.

There are 71 cardinal Class B shares worthy astir $1.8 cardinal held by descendants of institution laminitis Henry Ford. The Ford family's voting powerfulness diminishes erstwhile their Class B shares autumn beneath astir $60.8 million.

Some person criticized the dual-share strategy for unfairly allowing the household to clasp power of the automaker. Ford has repeatedly defended the dual stock operation arsenic allowing the automaker to ore much connected the semipermanent and not beryllium different "nameless, faceless corporation."

"I deliberation it's truly important that the household bequest continue," helium said. "It gives america a look and possibly a humanity that a batch of different companies don't have."

The dual-class banal structure, which has been successful spot since the institution went nationalist successful 1956, has faced galore shareholder challenges. At past year's shareholder meeting, 36.3% of voters supported a strategy that gave each stock an adjacent vote, somewhat higher than the 35.3% mean since 2013.

Ford believes his banal ownership supports his defence of the family's shares and voting power. Ford said helium can't remember, if ever, selling Ford shares successful the unfastened market. That doesn't see exercising options, transferring shares to trusts oregon converting communal shares to Class B stock.

"I'm successful this for the agelong haul. This is my beingness and I emotion the company," helium said. "I truly judge that we are headed for an unthinkable future."

– CNBC's Robert Frank contributed to this report.