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Share-Based Compensation (Notes)
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement, Noncash Expense [Abstract]  
Share-based Payment Arrangement [Text Block] SHARE-BASED COMPENSATION
Under our Long-Term Incentive Plans, we may issue restricted stock units (“RSUs”), restricted stock shares (“RSSs”), and stock options. RSUs and RSSs consist of time-based and performance-based awards. The number of shares that may be granted in any year is limited to 2% of our issued and outstanding Common Stock as of December 31 of the prior calendar year. The limit may be increased up to 3% in any year, with a corresponding reduction in shares available for grants in future years. Granted RSUs generally cliff vest or ratably vest over a three-year service period. Performance-based RSUs can be based on internal financial performance metrics or total shareholder return relative to a peer group or a combination of the two metrics. At the time of vest, RSU awards are net settled (i.e., shares are withheld to cover the employee tax obligation). Stock options ratably vest over a three-year service period and expire ten years from the grant date.

The fair value of both the time-based and the internal performance metrics portion of the performance-based RSUs and RSSs is determined using the closing price of our Common Stock at grant date. For awards that include a market condition, we measure the fair value using a Monte Carlo simulation. The weighted average per unit grant date fair value for the years ended December 31, 2022, 2023, and 2024 was $15.63, $12.98, and $12.49, respectively.

Time-based RSUs generally have a graded vesting feature whereby one-third of each grant vests after the first anniversary of the grant date, one-third after the second anniversary, and one-third after the third anniversary. The graded vesting method recognizes expense over the service period for each separately-vesting tranche, which results in accelerated recognition of expense. The fair value of time-based RSUs, RSSs, and stock options is expensed over the shorter of each separate vesting period, using the graded vesting method, or the time period an employee becomes eligible to retain the award at retirement. The fair value of performance-based RSUs and RSSs is expensed when it is probable and estimable as measured against the performance metrics over the shorter of the performance or required service periods. We measure the fair value of our stock options on the date of grant using either the Black-Scholes option-pricing model (for options without a market condition) or a Monte Carlo simulation (for options with a market condition). We have elected to recognize forfeitures as an adjustment to compensation expense for all RSUs, RSSs, and stock options in the same period as the forfeitures occur. Expense is recorded in Selling, administrative, and other expenses and Cost of sales, as incurred.

Restricted Stock Units and Restricted Stock Shares

The fair value of vested RSUs and RSSs as well as the compensation cost for the years ended December 31 were as follows (in millions):
 202220232024
Fair value of vested shares$252 $303 $522 
Compensation cost (a)223 356 411 
__________
(a)    Net of tax benefit of $113 million, $104 million, and $100 million in 2022, 2023, and 2024, respectively.

As of December 31, 2024, there was approximately $450 million in unrecognized compensation cost related to non-vested RSUs.  This expense will be recognized over a weighted average period of 1.9 years.

The performance-based RSUs granted in March 2022, 2023, and 2024 include a relative Total Shareholder Return (“TSR”) metric. Inputs and assumptions used to calculate the fair value at grant date through a Monte Carlo simulation were as follows:
 202220232024
Fair value per stock award$18.10 $18.57 $18.50 
Grant date stock price16.85 13.08 12.74 
Assumptions:
Ford’s stock price expected volatility (a)44.8 %49.5 %41.9 %
Expected average volatility of peer companies (a)39.6 49.6 40.7 
Risk-free interest rate1.62 4.57 4.43 
__________
(a)Expected volatility based on three years of daily closing share price changes ending on the grant date.
NOTE 6.  SHARE-BASED COMPENSATION (Continued)

During 2024, activity for RSUs and RSSs was as follows (in millions, except for weighted-average fair value):
 SharesWeighted-
Average
Fair Value
Outstanding, beginning of year80.6 $13.86 
Granted (a)61.8 12.49 
Vested (a)(41.9)12.45 
Forfeited(4.8)13.62 
Outstanding, end of year (b)95.7 13.44 
__________
(a)Includes shares awarded to non-employee directors.
(b)Excludes 1,285,271 non-employee director shares that were vested but unissued at December 31, 2024.

Stock Options
During 2024, no stock options were granted or exercised. At December 31, 2023 and 2024, stock options outstanding were 8.4 million and 4.7 million, respectively. As of December 31, 2024, all of our stock options are fully vested and will expire in 2030, if not exercised sooner.