DEF 14A 1 a2240860zdef14a.htm DEF 14A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.            )

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

 

Ford Motor Company

(Name of Registrant as Specified In Its Charter)

 

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Notice of 2020 Virtual Annual Meeting
of Shareholders and Proxy Statement




LOGO

 


Thursday, May 14, 2020 at 8:30 a.m., Eastern Daylight Saving Time
Virtual Annual Meeting of Shareholders
Online Meeting Only — No Physical Meeting Location


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GRAPHIC   Ford Motor Company
One American Road
Dearborn, Michigan 48126-2798

LOGO

Dear Shareholders:

It is my pleasure to inform you that our 2020 Annual Meeting of Shareholders will be conducted online on Thursday, May 14, 2020, starting at 8:30 a.m. EDT. The virtual nature of the meeting will continue to enable increased shareholder accessibility, while improving meeting efficiency and reducing costs. Shareholders will be able to listen, vote, and submit questions from any remote location with Internet connectivity. Information on how to participate in this year's virtual meeting can be found on page 85.

While we do not yet know the full impact of the global coronavirus pandemic, we are working hard to make sure our business is ready to resume normal operations once it is safe to do so. Throughout this crisis, I have been very impressed by our workforce as we work through these unprecedented times and the ways we have come together across industries to make a real difference for people in need. While there remains much uncertainty in our current environment, I am confident that we will get through this and continue to build for the future.

For nearly 117 years, Ford has proven its resilience through wars, recessions, oil shocks and more and we will get through this, too. We have endured because of the higher sense of purpose we aspire to, and because of the talent, dedication and determination of our employees. Whatever form transportation takes in the future, our Board of Directors, leadership team and extended family of employees are determined to continue earning your trust as we strive to become the world's most trusted company.

Thank you for your support of our efforts.

April 3, 2020

/s/ William Clay Ford, Jr.


William Clay Ford, Jr.
Chairman of the Board


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LOGO

Notice of Virtual Annual Meeting of
Shareholders of Ford Motor Company

Thursday, May 14, 2020
8:30 a.m., Eastern Daylight Saving Time

This year's virtual annual meeting will begin promptly at 8:30 a.m., Eastern Daylight Saving Time. If you plan to participate in the virtual meeting, please see the instructions on page 85 of the Proxy Statement. Shareholders will be able to listen, vote, and submit questions from their home or from any remote location that has Internet connectivity. There will be no physical location for shareholders to attend. Shareholders may only participate online by logging in at www.virtualshareholdermeeting.com/FORD2020.

ITEMS OF BUSINESS:

1.
The election of the 13 director nominees named in the Proxy Statement.

2.
The ratification of the selection of PricewaterhouseCoopers LLP as Ford's independent registered public accounting firm for 2020.

3.
A non-binding shareholder advisory vote to approve the compensation of the Named Executives.

4.
Consideration of the two shareholder proposals set forth in the Proxy Statement.

If you were a shareholder at the close of business on March 18, 2020, you are eligible to vote at this year's annual meeting.

Please read these materials so that you will know which items of business we intend to cover during the meeting. Also, please either sign and return the accompanying proxy card in the postage-paid envelope or instruct us by telephone or online as to how you would like your shares voted. This will allow your shares to be voted as you instruct even if you cannot participate in the meeting. Instructions on how to vote your shares by telephone or online are on the proxy card enclosed with the Proxy Statement.

Please see Other Items and the Questions and Answers section beginning on page 81 for important information about the proxy materials, voting, the virtual annual meeting, Company documents, communications, and the deadline to submit shareholder proposals for the 2021 Annual Meeting of Shareholders.

Shareholders are being notified of the Proxy Statement and the form of proxy beginning April 3, 2020.

April 3, 2020

Dearborn, Michigan

/s/ Jonathan E. Osgood


Jonathan E. Osgood
Secretary

We urge each shareholder to promptly sign and return the enclosed proxy card or to use telephone or online voting. See our Questions and Answers beginning on page 82 for information about the virtual meeting and voting by telephone or online and how to revoke a proxy.

NOTICE OF VIRTUAL ANNUAL MEETING OF SHAREHOLDERS

GRAPHIC

2020 Proxy Statement

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Proxy Summary

  1

Corporate Governance

 
10

Corporate Governance Principles

  10

Our Governance Practices

  10

Leadership Structure

  11

Board Meetings, Composition, and Committees

  11

Board's Role in Risk Management

  14

Independence of Directors and Relevant Facts and Circumstances

  18

Codes of Ethics

  19

Communications with the Board and Annual Meeting Attendance

  19

Beneficial Stock Ownership

  20

Certain Relationships and Related Party Transactions

  22

Government Relations Activities

  24

Proposal 1. Election of Directors

 
25

Director Compensation in 2019

  33

Proposal 2. Ratification of Independent Registered Public Accounting Firm

 
35

Audit Committee Report

  36

Proposal 3. Approval of the Compensation of the Named Executives

 
37

Compensation Discussion and Analysis (CD&A) Roadmap

 
38

Executive Compensation

 
39

COMPENSATION DISCUSSION AND ANALYSIS (CD&A)

  39

COMPENSATION COMMITTEE REPORT

  61

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

  62

COMPENSATION OF NAMED EXECUTIVES

  62

Summary Compensation Table

  62

Grants of Plan-Based Awards in 2019

  64

Outstanding Equity Awards at 2019 Fiscal Year-End

  65

Option Exercises and Stock Vested in 2019

  67

Pension Benefits in 2019

  67

Nonqualified Deferred Compensation in 2019

  69

Potential Payments Upon Termination or Change-in-Control

  70

Equity Compensation Plan Information

  73

Pay Ratio

  74

Shareholder Proposals

 
76

Proposal 4. Shareholder Proposal

  76

Proposal 5. Shareholder Proposal

  79

Other Items

 
81

Questions and Answers About the Proxy Materials

 
82

Instructions for the Virtual Annual Meeting

 
85

Appendix I. Cautionary Note on Forward Looking Statements

 
I-1

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2020 Proxy Statement


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Proxy Summary

This summary highlights information contained in this Proxy Statement. It does not contain all of the information you should consider. You should read the entire Proxy Statement carefully before voting. Please see the Questions and Answers section beginning on page 82 for important information about proxy materials, voting, the virtual annual meeting, Company documents, and communications.

The Board of Directors is soliciting proxies to be used at the annual meeting of shareholders. This Proxy Statement and the enclosed proxy are being made available to shareholders beginning April 3, 2020.

TIME OF VIRTUAL ANNUAL MEETING

Thursday, May 14, 2020
8:30 a.m., Eastern Daylight Saving Time

We will hold a virtual annual meeting of shareholders. Shareholders may participate online by logging onto www.virtualshareholdermeeting.com/FORD2020. There will not be a physical meeting location.
 
Corporate Website:
www.corporate.ford.com
Annual Report:
www.annualreport.ford.com

MEETING AGENDA

VOTING MATTERS
  Board
Recommendations

  Pages
 

Election of the 13 Director Nominees Named in the Proxy Statement

  FOR     25-34  

Ratification of Independent Registered Public Accounting Firm

 
FOR
   
35-36
 

Approval of the Compensation of the Named Executives

 
FOR
   
37-75
 

Shareholder Proposal — Give Each Share an Equal Vote

 
AGAINST
   
76-78
 

Shareholder Proposal — Lobbying Disclosure

 
AGAINST
   
79-80
 

CORPORATE GOVERNANCE HIGHLIGHTS

Lead Independent Director

Independent Board Committees — Audit, Compensation, and Nominating and Governance

Committee Charters

Independent Directors Meet Regularly Without Management and Non-Independent Directors

Regular Board and Committee Self-Evaluation Process

Separate Chairman of the Board and CEO

Confidential Voting

Shareholders Have the Right to Call Special Meetings
Shareholders May Take Action by Written Consent

Strong Codes of Ethics

Annual Election of All Directors

Majority Vote Standard — No Supermajority Voting Requirement

Board Meetings in 2019: 7

Standing Board Committees — Meetings in 2019: Audit: 15, Compensation: 9, Finance: 4, Nominating and Governance: 3, Sustainability and Innovation: 3

77% of the Director Nominees are Independent

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DIRECTOR NOMINEES   GRAPHIC
                                                 
      AGE
DIRECTOR SINCE
PRINCIPAL OCCUPATION



    QUALIFICATIONS
    COMMITTEES
    OTHER BOARDS
 
                                                 
 
    
                                               
Kimberly A. Casiano
Independent
     
62
2003
President, Kimberly Casiano & Associates, San Juan, Puerto Rico
 
          GRAPHIC
          Audit
Nominating & Governance
Sustainability & Innovation
          Mutual of America    
                                                    
Anthony F. Earley, Jr.
Independent
     
70
2009
Retired Executive Chairman of the Board of Directors, PG&E Corporation
 
          LOGO
          Compensation (Chair)
Nominating & Governance
Sustainability & Innovation
          Southern Company    
                                                    
Edsel B. Ford II      
71
1988
Consultant, Ford Motor Company
 
          GRAPHIC
          Finance
Sustainability & Innovation
               
                                                    
William Clay Ford, Jr.      
62
1988
Executive Chairman and Chairman of the Board of Directors, Ford Motor Company
 
          GRAPHIC
          Finance (Chair)
Sustainability & Innovation
               
                                                    
James P. Hackett      
64
2017
President and Chief Executive Officer, Ford Motor Company
 
          GRAPHIC
                           
                                                    
William W. Helman IV
Independent
     
61
2011
General Partner, Greylock Partners
 
          GRAPHIC
          Finance
Nominating & Governance
Sustainability & Innovation (Chair)
          Vornado Realty Trust    
                                                    
William E. Kennard
Independent
     
63
2015
Chairman, Velocitas Partners LLC
 
          GRAPHIC
          Finance
Nominating & Governance (Chair)
Sustainability & Innovation
          AT&T Inc.
MetLife, Inc.
Duke Energy Corporation
   
                                                    
John C. Lechleiter
Independent
     
66
2013
Retired Chairman and Chief Executive Officer, Eli Lilly and Company
 
          GRAPHIC
          Compensation
Nominating & Governance
               
                                                    
Beth E. Mooney
Independent
     
65
July 2019
Retired Chairman and Chief Executive Officer, KeyCorp*
 
          GRAPHIC
          Audit
Nominating & Governance
          AT&T Inc.
KeyCorp
   
                                                    
John L. Thornton
Independent
     
66
1996
Executive Chairman, Barrick Gold Corporation
 
          GRAPHIC
          Compensation
Finance
Nominating & Governance
          Barrick Gold Corporation    
                                                    
John B. Veihmeyer
Independent
     
64
2017
Retired Chairman and Chief Executive Officer, KPMG, LLP and retired Chairman of KPMG International
 
          GRAPHIC
          Audit
Nominating & Governance
               
                                                    
Lynn M. Vojvodich
Independent
     
52
2017
Former Executive Vice President & Chief Marketing Officer, Salesforce
 
          GRAPHIC
          Audit
Nominating & Governance
Sustainability & Innovation
          Booking Holdings Inc.
Dell Technologies
   
                                                    
John S. Weinberg
Independent
     
63
2016
Chairman of the Board of Directors and Executive Chairman, Evercore Partners Inc.
 
          GRAPHIC
          Compensation
Finance
Nominating & Governance
Sustainability & Innovation
          Evercore Partners Inc.    
                                                    

*
Retirement effective May 1, 2020.

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CD&A Roadmap

GRAPHIC

*
See pages 60, 62, and 63 of Ford's 2019 Form 10-K for definitions and reconciliations to GAAP.

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GRAPHIC

GRAPHIC

GRAPHIC

*   See pages 60, 62, and 63 of Ford's 2019 Form 10-K for definitions and reconciliations to GAAP.

IMPROVING OUR FITNESS TO FINANCE OUR GROWTH

The information in this Performance Section shows we continue to deliver positive results over a sustained time period. In order to create greater value for our stakeholders, it is important that we attack costs as well as redesign our business operations to take advantage of future growth opportunities. The graphics below show some of our 2019 achievements in our areas of strength and the strategic choices we are making to drive future growth.

ACHIEVEMENTS   STRATEGIC CHOICES
GRAPHIC   Ford was America's best-selling vehicle brand for the tenth consecutive year   GRAPHIC   Announced an agreement with Mahindra to co-develop a midsize sport SUV for India and emerging markets
GRAPHIC   41st year Ford has been America's best-selling commercial van maker   GRAPHIC   Announced a joint venture with Mahindra that will develop, market, and distribute Ford brand vehicles in India and Ford brand and Mahindra brand vehicles in high-growth emerging markets
GRAPHIC   Lincoln SUVs had their best annual sales results since 2003   GRAPHIC   Invested in Rivian to form a strategic partnership to develop an all-new, next-generation battery electric vehicle
GRAPHIC   Full-year F-Series sales totaled 896,526, marking its 43rd year as America's best-selling pickup and the 38th straight year as America's best-selling vehicle   GRAPHIC   Ford and Autonomic, the creators of the Transportation Mobility Cloud, signed a global agreement with Amazon Web Services, which will expand the availability of cloud connectivity services and connected car application development services for the transportation industry
GRAPHIC   We concluded a new collective bargaining agreement with the United Auto Workers that increases our manufacturing competitiveness and protects jobs   GRAPHIC   Announced expansion of our alliance with Volkswagen to include investment in Argo AI, an autonomous vehicle development entity, and cooperation in the development of electric vehicles

GRAPHIC

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GRAPHIC

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Underlying our compensation programs is an emphasis on sound governance practices. These practices include:

WE DO

GRAPHIC   Perform annual say-on-pay advisory vote for shareholders
GRAPHIC   Pay for performance
GRAPHIC   Use appropriate peer group when establishing compensation
GRAPHIC   Balance short- and long-term incentives
GRAPHIC   Align executive compensation with stockholder returns through long-term incentives
GRAPHIC   Cap individual payouts in incentive plans
GRAPHIC   Include clawback provision in our incentive grants (see Risk Assessment Regarding Compensation Policies and Practices on p. 15)
GRAPHIC   Maintain robust stock ownership goals for Named Executives
GRAPHIC   Prohibit officers from hedging their exposure to Ford common stock and limit officers' pledging of Ford common stock (see Corporate Governance on p. 16)
GRAPHIC   Condition grants of long-term incentive awards on non-compete and non-disclosure restrictions
GRAPHIC   Mitigate undue risk taking in compensation programs
GRAPHIC   Retain a fully independent external compensation consultant whose independence is reviewed annually by the Compensation Committee (see Compensation Committee Operations on pp. 16-17)
GRAPHIC   Include a double-trigger change in control provision for equity grants

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WE DO NOT

GRAPHIC   Provide evergreen employment contracts
GRAPHIC   Pay out dividend equivalents on equity awards during vesting periods or performance periods
GRAPHIC   Maintain individual change in control agreements for Named Executives
GRAPHIC   Reprice options
GRAPHIC   Allow officers to hedge their exposure to Ford common stock

GRAPHIC

GRAPHIC

                                                             
  
Element
    
    BASE SALARY
    ANNUAL CASH
INCENTIVE AWARDS


    LONG-TERM
INCENTIVE AWARDS


    BENEFITS AND
PERQUISITES


    RETIREMENT PLANS
 
                                                             
                                                                
  
Purpose
    
      Base Level of
Compensation
          Incentive to Drive
Near-Term Performance
          Incentive to Drive Long-
Term Performance and
Stock Price Growth
          Enhance Productivity
and Development
          Income Certainty and
Security
   
                                                                
  
Target
    
      Fixed $           Fixed % of Salary           Fixed $ Value Equity Opportunity           Variable           % of Salary    
                                                                
 
Form of Delivery
    
      Cash           Cash           Performance Units*
and
Time-Based Units*
          Various           Cash    
                                                                
Company
Performance/
Award
      NA           0-200%           Performance Units
0-200%
          NA           NA    
*
A Performance Unit is an award of the right to earn up to a certain number of shares of common stock, Restricted Stock Units, or cash, or a combination of cash and shares of common stock or Restricted Stock Units, based on performance against specified goals established by the Compensation Committee under the Long-Term Incentive Plan. A Time-Based Unit represents the right to receive a share of common stock, or cash equivalent to the value of a share of common stock, when the restriction period ends, under the Long-Term Incentive Plan, as determined by the Compensation Committee.

GRAPHIC

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GRAPHIC

Our compensation practices have been consistently supported by shareholders, as evidenced by recent Say-on-Pay results.

GRAPHIC

We regularly meet with investors and consider any concerns shared with us. For instance, in 2015 we made significant changes to our Performance Unit program that addressed investor comments.

GRAPHIC

GRAPHIC

Named Executives' compensation is tied to our 2019 and 2017-2019 performance periods

Adopted policies that prohibit the hedging of exposure to Ford common stock by officers and limits the pledging of Ford common stock by officers

80% of our Named Executives' target compensation is performance-based

Our Global Compensation and Benefits Philosophy, Strategy, and Guiding Principles include a gender pay equity statement

Executive stock ownership goals continue to align the interests of executives with shareholders
The Compensation Committee amended its Charter to include review of significant people-related strategies to enhance oversight of human capital management

In 2019 we continued a modest share buyback program to offset the dilutive effect of our equity compensation plans

Executive pay practices are tied to robust risk and control features

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STAKEHOLDER ENGAGEMENT

Ford has a philosophy of direct, open, transparent, and frequent engagement with our stakeholders, including:

Ford's senior leadership team and Investor Relations met with fixed income and equity holders, as well as potential holders, at twenty conferences and nine roadshows. We hosted quarterly earnings calls, which were webcast, and also engaged with the capital markets via phone calls, emails, in-house meetings, and other industry events.

As an indication of our commitment to fostering strong communication ties with our stakeholders, we met with shareholders representing 65% of our institutional equity investor base and fixed income investors holding 30% of our unsecured debt outstanding. Topics discussed included: long term strategy, financial and operating performance, risk management, and environmental, social, and governance practices. We found these meetings to be informative, and we continue to incorporate many stakeholder suggestions into our Proxy Statement and communications strategy.

GRAPHIC

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE

For Ford, the commitment to create a better world is as strong as ever. We apply our global reach and resources to have a positive impact, provide trusted mobility, and drive human progress. Each year, we detail our performance and progress on sustainability and corporate responsibility in our Sustainability Report (www.sustainability.ford.com). Some highlights in our 2018-2019 report are:


GRAPHIC

 

Reaffirming our commitment to deliver CO2 reductions from our facilities and our vehicles in line with the Paris Climate Accord

 

GRAPHIC

 

Advancing diversity and inclusion by committing to the principles of the CEO Action for Diversity & Inclusion Pledge and included for the first time on the Bloomberg Gender-Equality Index

GRAPHIC

 

Investing more than $11 billion to get electrified vehicles on the road even faster. Strengthened electrification plans with Mahindra, VW, and Rivian alliances

 

GRAPHIC

 

Awarded the 2018 Environmental Innovation Award for using a tree-based cellulose hybrid material to reduce weight and cost in the Lincoln Continental

GRAPHIC

 

Reporting to the TCFD & SASB frameworks for climate and sustainability related financial impacts for the first time

 

GRAPHIC

 

Achieved 7.8% absolute reduction in global water use for manufacturing in 2018

GRAPHIC

 

Increasing our use of renewable energy for all manufacturing plants globally towards 100% by 2035

 

GRAPHIC

 

Setting clear Sustainability policies and strategies through our Sustainability and Innovation Committee of the Board of Directors

GRAPHIC

 

Achieved 30% CO2 reduction per vehicle from our manufacturing facilities leading to a new goal for a further 18% reduction by 2023

 

GRAPHIC

 

Achieved 5.5% absolute reduction in global waste sent to landfill in 2018

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Corporate Governance

Corporate Governance Principles

The Nominating and Governance Committee developed and recommended to the Board a set of corporate governance principles, which the Board adopted. Ford's Corporate Governance Principles may be found on its website at www.corporate.ford.com. These principles include: a limitation on the number of boards on which a director may serve, qualifications for directors (including a requirement that directors be prepared to resign from the Board in the event of any significant

change in their personal circumstances that could affect the discharge of their responsibilities), director orientation and continuing education, and a requirement that the Board and each of its Committees perform an annual self-evaluation. Shareholders may obtain a printed copy of the Company's Corporate Governance Principles by writing to our Shareholder Relations Department at Ford Motor Company, Shareholder Relations, P.O. Box 6248, Dearborn, MI 48126.

Our Governance Practices

GRAPHIC

Ford has a long history of operating under sound corporate governance practices, which is a critical element of creating the world's most trusted company. These practices include the following:

GRAPHIC   Annual Election of All Directors.

GRAPHIC

 

Majority Vote Standard. Each director must be elected by a majority of votes cast.

GRAPHIC

 

Independent Board. 77% of the Director Nominees are independent.

GRAPHIC

 

Lead Independent Director. Ensures management is adequately addressing the matters identified by the Board.

GRAPHIC

 

Independent Board Committees. Each of the Audit, Compensation, and Nominating and Governance Committees is comprised entirely of independent directors.

GRAPHIC

 

Committee Charters. Each standing committee operates under a written charter that has been approved by the Board and is reviewed annually.

GRAPHIC

 

Independent Directors Meet Regularly Without Management and Non-Independent Directors.

GRAPHIC

 

Regular Board and Committee Self-Evaluation Process. The Board and each committee evaluates its performance each year.
GRAPHIC   Mandatory Deferral of Compensation for Directors. In 2019, approximately 68% of annual director fees were mandatorily deferred into Ford restricted stock units, which strongly links the interests of the Board with those of shareholders.

GRAPHIC

 

Separate Chairman of the Board and CEO. The Board of Directors has chosen to separate the roles of CEO and Chairman of the Board of Directors.

GRAPHIC

 

Confidential Voting at Annual Meeting.

GRAPHIC

 

Special Meetings. Shareholders have the right to call a special meeting.

GRAPHIC

 

Shareholders May Take Action by Written Consent.

GRAPHIC

 

Strong Codes of Ethics. Ford is committed to operating its business with the highest level of integrity and has adopted codes of ethics that apply to all directors and senior financial personnel, and a code of conduct that applies to all employees.

GRAPHIC

 

Hedging and Pledging Policies. Officers are prohibited from hedging their exposure to, and limited in pledging, Ford common stock (see p. 16).

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Leadership Structure

GRAPHIC

Ford determines the most suitable leadership structure from time to time. At present, the Board of Directors has chosen to separate the roles of CEO and Chairman of the Board of Directors. James P. Hackett is our President and CEO, and William Clay Ford, Jr., is Chairman of the Board of Directors as well as our Executive Chairman. We believe this structure is optimal for Ford at this time because it allows Mr. Hackett to focus on leading the organization while allowing Mr. Ford to focus on leading the Board of Directors. Furthermore, the Board has appointed Anthony F. Earley, Jr., as our Lead Independent Director. We believe having a Lead Independent Director is an important

governance practice given that the Chairman of the Board, Mr. Ford, is not an independent director under our Corporate Governance Principles. The duties of the Lead Independent Director include:

chairing the executive sessions of our independent directors;

advising on the selection of Board Committee Chairs; and

working with Mr. Ford and Mr. Hackett to ensure management is adequately addressing the matters identified by the Board.

This structure optimizes the roles of CEO, Chairman, and Lead Independent Director and provides Ford with sound corporate governance in the management of its business.

Board Meetings, Composition, and Committees

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COMPOSITION OF BOARD OF DIRECTORS / NOMINEES

The Nominating and Governance Committee recommends the nominees for all directorships. The Committee also reviews and makes recommendations to the Board on matters such as the size and composition of the Board in order to ensure the Board has the requisite expertise and its membership consists of persons with sufficiently diverse and independent backgrounds. Between annual shareholder meetings, the Board may elect directors to the Board to serve until the next annual meeting. In 2018 we implemented a more robust peer and Board and Committee self-assessment process. In 2020, we engaged an outside party to communicate with each director concerning Board dynamics and effectiveness. The third-party will provide feedback to the Board on areas of strengths, weaknesses, and opportunities for improvement. We also instituted an evaluation process whereby every five years each director's skills and qualifications are analyzed as to whether such skills and qualifications remain relevant in light of changing business conditions.

For many years we have maintained a mandatory retirement age of 72 for directors. In 2019, the Board adopted a policy for new independent directors whereby it is expected that an independent director may serve up to 15 one-year terms, unless unique circumstances warrant additional terms. We will continue to maintain the mandatory retirement age of 72 so that for new independent directors it is expected that they will not be re-nominated when they reach the earlier of having served for 15 terms or age 72, absent a waiver from the Board for unique circumstances.

During 2019, the Committee recommended that the size of the Board be kept at 14 with the addition of Beth E. Mooney in July. Mr. Butler is not standing for re-election this year having reached our mandatory retirement age. Consequently, the Committee recommended that the size of the Board be reduced to 13 at the time of the 2020 Annual Meeting.

The Board believes it has an appropriate mix of short- and medium-tenured directors as well as long-tenured directors which provide a balance that enables the Board to benefit from fresh insights and historical perspectives during its deliberations. In addition, having two members of the Ford family, William Clay Ford, Jr. and Edsel B. Ford II, who are first cousins, brings a unique historical and long-term perspective to Board deliberations. In addition, the Board has managed succession planning effectively with

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strategic waivers of the mandatory retirement age where appropriate to maintain certain expertise while new directors supplement the Board structure.

The Board proposes to you a slate of nominees for election to the Board at the annual meeting. You may propose nominees (other than self-nominations) for consideration by the Committee by submitting the names, qualifications, and other supporting information to: Secretary, Ford Motor Company, One American Road, Dearborn, MI 48126. Properly submitted recommendations must be received no later than December 3, 2020, to be considered by the Committee for inclusion in the following year's nominations for election to the Board. Your properly submitted candidates are evaluated in the same manner as those candidates recommended by other sources. All candidates are considered in light of the needs of the Board with due consideration given to the qualifications described on p. 25 under Election of Directors.

EXECUTIVE SESSIONS OF NON-EMPLOYEE DIRECTORS

Non-employee directors ordinarily meet in executive session without management present at most regularly scheduled Board meetings and may meet at other times at the discretion of the Lead Independent Director or at the request of any non-employee director. Additionally, all of the independent directors meet periodically (at least annually) without management or non-independent directors present.

BOARD COMMITTEES

Only independent directors serve on the Audit, Compensation, and Nominating and Governance Committees, in accordance with the independence standards of the New York Stock Exchange LLC ("NYSE") Listed Company and Securities and Exchange Commission ("SEC") rules and the Company's Corporate Governance Principles. Under these standards members of the Audit Committee also satisfy the heightened SEC independence standards for audit committees and the members of the Compensation Committee satisfy the additional NYSE independence standards for compensation committees. Each member of the Audit Committee also meets the financial literacy requirements of the NYSE Listed Company rules. The Board, and each committee of the Board, has the authority to engage independent consultants and advisors at the Company's expense.

The Company has published on its website (www.corporate.ford.com) the charter of each of the Audit, Compensation, Finance, Nominating and Governance, and Sustainability and Innovation

Committees of the Board. Printed copies of each of the committee charters are available by writing to our Shareholder Relations Department at Ford Motor Company, Shareholder Relations, P.O. Box 6248, Dearborn, MI 48126.

BOARD COMMITTEE FUNCTIONS

Audit Committee: Selects the independent registered public accounting firm, subject to shareholder ratification, and determines the compensation of the independent registered public accounting firm.

At least annually, reviews a report by the independent registered public accounting firm describing: internal quality control procedures, any issues raised by an internal or peer quality control review, any issues raised by a governmental or professional authority investigation in the past five years and any steps taken to deal with such issues, and (to assess the independence of the independent registered public accounting firm) all relationships between the independent registered public accounting firm and the Company.

Consults with the independent registered public accounting firm, reviews and approves the scope of their audit, and reviews their independence and performance. Also, annually approves categories of services to be performed by the independent registered public accounting firm and reviews and, if appropriate, approves in advance any new proposed engagement greater than $250,000.

Reviews internal controls, accounting practices, and financial reporting, including the results of the annual audit and the review of the interim financial statements with management and the independent registered public accounting firm.

Reviews activities, organization structure, and qualifications of the General Auditor's Office, and participates in the appointment, dismissal, evaluation, and determination of the compensation of the General Auditor.

Discusses earnings releases and guidance provided to the public and rating agencies.

Reviews, at least annually, policies with respect to risk assessment and risk management.

Exercises reasonable oversight with respect to the implementation and effectiveness of the Company's compliance and ethics program, including being knowledgeable about the content and operation of the compliance and ethics program.

Reviews, with the Office of the General Counsel, any legal or regulatory matter that could have a significant impact on the financial statements.

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As appropriate, obtains advice and assistance from outside legal, accounting, or other advisors.

Prepares an annual report of the Audit Committee to be included in the Company's proxy statement.

Reviews our cyber security practices periodically, at least twice each year.

Assesses annually the adequacy of the Audit Committee Charter.

Reports to the Board of Directors about these matters.

Compensation Committee: Establishes and reviews the overall executive compensation philosophy and strategy of the Company.

Reviews and discusses key people-related business strategies.

Reviews and approves Company goals and objectives related to the Executive Chairman, the President and CEO, and other executive officers' compensation, including annual performance objectives.

Evaluates the performance of the Executive Chairman, the President and CEO, and other executive officers in light of established goals and objectives and, based on such evaluation, reviews and approves the annual salary, bonus, stock options, Performance Units, other stock-based awards, other incentive awards, and other benefits, direct and indirect, of the Executive Chairman, the President and CEO, and other executive officers.

Conducts a risk assessment of the Company's compensation policies and practices.

Considers and makes recommendations on Ford's executive compensation plans and programs.

Reviews the Compensation Discussion and Analysis to be included in the Company's proxy statement.

Prepares an annual report of the Compensation Committee to be included in the Company's proxy statement.

Assesses the independence of the Committee's consultant. Assesses annually the adequacy of the Compensation Committee Charter.

Reports to the Board of Directors about these matters.

Finance Committee: Reviews all aspects of the Company's policies and practices that relate to the management of the Company's financial affairs, consistent with law and specific instructions given by the Board of Directors.

Reviews capital allocation priorities, policies, and guidelines, including the Company's cash flow, minimum cash requirements, and liquidity targets.

Reviews the Company's capital appropriations financial performance against targets by conducting interim reviews and an annual review of previously approved capital programs and periodic review of acquisitions and new business investments.

Reviews with management, at least annually, the annual report from the Treasurer of the Company's cash and funding plans and other Treasury matters.

Reviews the strategy and performance of the Company's pension and other retirement and savings plans.

Performs such other functions and exercises such other powers as may be delegated to it by the Board of Directors from time to time.

Reviews, at least annually, policies with respect to financial risk assessment and financial risk management.

Assesses annually the adequacy of the Finance Committee Charter.

Reports to the Board of Directors about these matters.

Nominating and Governance Committee: Reviews and makes recommendations on: (i) the nominations or election of directors and (ii) the size, composition, and compensation of the Board.

Establishes criteria for selecting new directors and the evaluation of the Board, including whether current members and candidates possess skills and qualifications that support the Company's strategy.

Develops and recommends to the Board corporate governance principles and guidelines.

Reviews the charter and composition of each committee of the Board and makes recommendations to the Board for the adoption of or revisions to the committee charters, the creation of additional committees, or the elimination of committees.

Considers the adequacy of the By-Laws and the Restated Certificate of Incorporation of the Company and recommends to the Board, as appropriate, that the Board: (i) adopt amendments to the By-Laws and (ii) propose, for consideration by the shareholders, amendments to the Restated Certificate of Incorporation.

Considers shareholder suggestions for director nominees (other than self-nominations). See Composition of Board of Directors/Nominees on p. 11.

Assesses annually the adequacy of the Nominating and Governance Committee Charter.

Reports to the Board of Directors about these matters.

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Sustainability and Innovation Committee: Evaluates and advises on the Company's pursuit of innovative practices and technologies that improve environmental and social sustainability, enrich our customers' experiences, and increase shareholder value.

Discusses and advises on the innovation strategies and practices used to develop and commercialize technologies.

Annually reviews the Company's Sustainability Report Summary and initiatives related to innovation.

Assesses annually the adequacy of the Sustainability and Innovation Committee Charter.

Reports to the Board of Directors about these matters.

Board's Role in Risk Management

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The oversight responsibility of the Board and its Committees is supported by Company management and the risk management processes that are currently in place. Ford has extensive and effective risk management processes, relating specifically to compliance, reporting, operating, and strategic risks. Compliance Risk encompasses matters such as legal and regulatory compliance (e.g., Foreign Corrupt Practices Act, environmental, OSHA/safety, etc.). Reporting Risk covers Sarbanes-Oxley compliance, disclosure controls and procedures, and accounting compliance. Operating Risk addresses the myriad of matters related to the operation of a complex company such as Ford (e.g., quality, supply chain, sales and service, financing and liquidity, product development and engineering, labor, etc.). Strategic Risk encompasses somewhat broader and longer-term matters, including, but not limited to, technology development, sustainability, capital allocation, management development, retention and compensation, competitive developments, and geopolitical developments.

We believe that key success factors in the risk management at Ford include a strong risk analysis tone set by the Board and senior management, which is shown through their commitment to effective top-down and bottom-up communication (including communication between management and the Board and Committees), and active cross-functional participation among the Business Units and Functional Skill Teams. We have institutionalized a Monthly Business Review and Monthly Business Review of Special Topics process where the senior leadership of the Company reviews the status of the business, the risks and opportunities presented to the business (in the areas of compliance, reporting, operating, and strategic risks), and, utilizing the principles of design

thinking and critical thinking, develops specific plans to address those risks and opportunities.

The Enterprise Risk Management process adopted by the Company identifies the top 10 critical enterprise risks identified through a survey process of senior management and the Board of Directors. Once identified, each of the top 10 risks is assigned an executive risk owner who is responsible to oversee risk assessment, develop mitigation plans, and provide regular updates. The process includes that Business Units and Skill Teams will follow the same process for local risk identification and management. Risks at all levels are shared and aligned for a top-down and bottom-up view and management of risk. The Audit Committee and Board annually review the process to update the list of critical risks and monitor risk movement and emerging trends.

As noted above, the full Board of Directors has overall responsibility for the oversight of risk management at Ford and oversees operating risk management with reviews at each of its regular Board meetings. The Board of Directors has delegated responsibility for the oversight of specific areas of risk management to certain committees of the Board, with each Board committee reporting to the full Board following each committee meeting. The Audit Committee assists the Board of Directors in overseeing compliance and reporting risk. The Board and the Audit and Compensation Committees periodically review policies related to personnel matters, including those related to sexual harassment and anti-retaliation policies related to whistleblowers. The Board, the Sustainability and Innovation Committee, the Compensation Committee, and the Finance Committee all play a role in overseeing strategic risk management.

The scope and severity of risks presented by cyber threats have increased dramatically, and constant vigilance is required to protect against intrusions. We take cyber threats very seriously, conducting alternating internal and external annual audits of our cyber security capabilities. These audits are a useful tool for ensuring that we maintain a robust cyber security program to

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protect our investors, customers, employees, and intellectual property. The Audit Committee reviews our cyber security practices periodically, at least twice each year, with report outs to the Board as needed.

We also maintain an industry-leading cyber security insurance program with many of the world's largest and most respected insurance companies. Additionally, we

are a founding member of the Board of the Automotive Information Sharing and Analysis Center. Our current seat on that Board ensures that we preserve relationships that help to protect ourselves against both enterprise and in-vehicle security risks.

OVERSIGHT OF RISK MANAGEMENT

 

 

COMPLIANCE & REPORTING

 

OPERATING & STRATEGIC
FORD BOARD
Oversight
  Audit Committee   Sustainability & Innovation Committee
Compensation Committee
Finance Committee
FORD MANAGEMENT
Day-to-Day
  Compliance Reviews
Sarbanes-Oxley Compliance
Internal Controls
Disclosure Committee
  Business Units & Skill Teams
Monthly Business Review
Monthly Business Review Special Topics
Product, Strategy, and People Forums

AUDIT COMMITTEE FINANCIAL EXPERT AND AUDITOR ROTATION

The Charter of the Audit Committee provides that a member of the Audit Committee generally may not serve on the audit committee of more than two other public companies. The Board has designated Stephen G. Butler and John B. Veihmeyer as Audit Committee financial experts. Messrs. Butler and Veihmeyer meet the independence standards for audit committee members under the NYSE Listed Company and SEC rules. Mr. Butler, having reached the mandatory retirement age of 72, is not standing for re-election at the Annual Meeting. Mr. Veihmeyer will become the chair of the Audit Committee upon Mr. Butler's retirement. The lead partner of the Company's independent registered public accounting firm is rotated at least every five years.

RISK ASSESSMENT REGARDING COMPENSATION POLICIES AND PRACTICES

In 2019, we conducted an annual assessment of our compensation policies and practices, including our executive compensation programs, to evaluate the potential risks associated with these policies and practices. We reviewed and discussed the findings of the assessment with the Compensation Committee and concluded that our compensation programs are designed with an appropriate balance of risk and reward and do not encourage excessive or unnecessary risk-taking behavior. As a result, we do not believe that risks relating to our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on the Company.

In conducting this review, we considered the following attributes of our programs:

mix of base salary, annual bonus opportunities, and long-term equity compensation, with performance-based equity compensation opportunities for officers;

alignment of annual and long-term incentives to ensure that the awards encourage consistent behaviors and incentivize performance results;

inclusion of non-financial metrics, such as quality, and other quantitative and qualitative performance factors in determining actual compensation payouts;
capped payout levels for both the Incentive Bonus Plan and performance-based stock awards for Named Executives — the Compensation Committee has negative discretion over incentive program payouts;

use of Time-Based Units that vest ratably over three years and Performance Units that have a three-year performance period with performance measured against financial metrics (75% weighting) and relative Total Shareholder Return ("TSR") (25% weighting);

generally providing senior executives with long-term equity-based compensation on an annual basis — we believe that accumulating equity over a period of time encourages executives to take actions that promote the long-term sustainability of our business;

double-trigger change in control provisions for equity grants; and

stock ownership goals that align the interests of executive officers with those of our shareholders — this discourages executive officers from focusing on

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short-term results without regard to longer-term consequences.

Recoupment Policy. The Committee formally adopted a policy of recoupment of compensation in certain circumstances. The purpose of this policy is to help ensure executives act in the best interests of the Company. The policy requires any Company officer to repay or return cash bonuses and equity awards in the event: (i) the Company issues a material restatement of its financial statements, and the restatement was caused by such officer's intentional misconduct; (ii) such officer was found to be in violation of non-compete provisions of any plan or agreement; or (iii) such officer has committed ethical or criminal violations. The Committee will consider all relevant factors and exercise business judgment in determining any appropriate amounts to recoup up to 100% of any awards.

Our Compensation Committee considered compensation risk implications during its deliberations on the design of our executive compensation programs with the goal of appropriately balancing short-term incentives and long-term performance.

Hedging and Pledging Policies. At its December 2019 meeting the Compensation Committee adopted policies regarding the hedging and pledging of common stock by officers. The Committee adopted the following policy related to hedging exposure to common stock:

    Certain forms of hedging or monetization transactions, such as forward sale contracts, allow a person to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow an officer to continue to own Ford common stock, but without the full risks and rewards of ownership. When that occurs, the officer may no longer have the same incentives or objectives as the Company's other shareholders. Consequently, officers are prohibited from engaging in hedging their exposure to directly or indirectly owned Ford common stock, whether obtained through compensation, open-market purchases, or otherwise. For purposes of this policy, "hedging" includes the purchase of financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Ford common stock. Any hedges of Ford common stock in existence at the time a person becomes subject to this policy are grandfathered, but are prohibited from being renewed or extended.

In addition, the Committee adopted the following policy related to the pledging of common stock:

    Pledges of Ford common stock by an officer can result in the sale of shares without the consent of the officer if the obligation secured by the shares is in default, and if this occurs during a blackout period it could result in an insider trading violation by that officer. Pledges of Ford common stock in a brokerage margin account (where shares are pledged to secure a loan to buy other securities) present significant insider trading risk because the shares can be sold automatically with a decline in the stock price. In addition, the reputation of the Company, as well as officers' personal reputations, can be adversely affected if Ford common stock is sold pursuant to a defaulted obligation. Consequently, officers are prohibited from engaging in pledging directly or indirectly owned Ford common stock to secure obligations of a brokerage margin account as described above. Officers may pledge shares of Ford common stock other than in brokerage margin accounts as long as the following conditions are met: (i) only shares that exceed applicable stock ownership guidelines may be pledged and (ii) any such pledge receives the prior approval of the Chief Executive Officer and Office of the General Counsel. Any pledges of Ford common stock in existence at the time a person becomes subject to this policy are grandfathered, but are prohibited from being renewed or extended, unless such renewal or extension complies with this policy.

Regarding directors, the 2014 Stock Plan for Non-Employee Directors prohibits the hedging and pledging of common stock received pursuant to that plan.

COMPENSATION COMMITTEE OPERATIONS

The Compensation Committee establishes and reviews our executive compensation philosophy and strategy and oversees our various executive compensation programs. The Committee is responsible for evaluating the performance of and determining the compensation for our Executive Chairman, the President and CEO, and other executive officers and approving the compensation structure for senior management, including officers. The Committee is comprised of four directors who are considered independent under the NYSE Listed Company rules and our Corporate Governance Principles. The Committee's membership is determined by our Board of Directors. The Committee operates under a written charter adopted by our Board of Directors. The Committee annually reviews the charter. A copy of the charter may be found on our website at www.corporate.ford.com.

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The Committee makes decisions regarding the compensation of our executive officers, including the Named Executives. The Committee has delegated authority, within prescribed share limits, to a Long-Term Incentive Compensation Award Committee (comprised of William Clay Ford, Jr., and James P. Hackett) to approve grants of options, Performance Units, Time-Based Units, and other stock-based awards, and to the Annual Incentive Compensation Award Committee (also comprised of Messrs. Ford and Hackett) to determine bonuses for other employees. The Committee also delegated authority to the Office of the Chairman and Chief Executive, comprised of Messrs. Ford and Hackett, to determine the compensation of non-executive officers. The Committee regularly reviews such determinations.

The Board of Directors makes decisions relating to non-employee director compensation. Any proposed changes are reviewed in advance and recommended to the Board by the Nominating and Governance Committee (see Director Compensation in 2019 on pp. 33-34).

The Compensation Committee considers recommendations from Mr. Ford, Mr. Hackett, and the Chief Human Resources Officer in developing compensation plans and evaluating performance of other executive officers. The Committee's consultant also provides advice and analysis on the structure and level of executive compensation. Final decisions on any major element of compensation, however, as well as total compensation for executive officers, are made by the Compensation Committee.

As in prior years, in 2019 the Committee engaged Semler Brossy Consulting Group, LLC, an independent compensation consulting firm, to advise the Committee on executive compensation and benefits matters. Semler Brossy is retained directly by the Committee, which has the sole authority to review and approve the budget of the independent consultant. Semler Brossy does not advise our management and receives no other compensation from us. The same Semler Brossy principal attended all nine of the Committee meetings in 2019.

The Committee has analyzed whether the work of Semler Brossy as a compensation consultant has raised any conflict of interest, taking into consideration the following factors: (i) the provision of any other services to the Company by Semler Brossy; (ii) the amount of fees the Company paid to Semler Brossy as a percentage of the firm's total revenue; (iii) Semler

Brossy's policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Semler Brossy or the individual compensation advisor employed by the firm with an executive officer of the Company; (v) any business or personal relationship of the individual compensation advisor with any member of the Committee; and (vi) any stock of the Company owned by Semler Brossy or the individual compensation advisor employed by the firm. The Committee has determined, based on its analysis of the above factors, that the work of Semler Brossy and the individual compensation advisor employed by Semler Brossy as compensation consultant to the Committee has not created any conflict of interest.

In addition, the Committee reviewed survey data provided by the Willis Towers Watson Executive Compensation Database (see Competitive Survey on pp. 44-45). Willis Towers Watson does not make recommendations to, nor does it assist, the Committee in determining compensation of executive officers. Willis Towers Watson is retained by Ford management, not the Committee.

Committee meetings typically occur prior to the meetings of the full Board of Directors. Incentive Bonus targets and awards, Performance Unit grants, Time-Based Units, and cash awards typically are decided at the February or March Committee meeting (see Timing of Awards on pp. 47-48). Officer salaries are reviewed in February or March each year.

See the Compensation Discussion and Analysis on pp. 39-61 for more detail on the factors considered by the Committee in making executive compensation decisions. The Committee reviews our talent and executive development program with senior management. These reviews are conducted periodically and focus on executive development and succession planning throughout the organization, at the Leadership Level 1 officer level and above.

Our policy, approved by the Compensation Committee, to limit outside board participation by our officers, is:

no more than 15% of all officers should be on unaffiliated for-profit boards at any given point in time; and

no officer should be a member of more than one unaffiliated for-profit board.

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Independence of Directors and Relevant Facts and Circumstances

 

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DIRECTOR INDEPENDENCE

A majority of the directors must be independent directors under applicable SEC and NYSE Listed Company rules. These rules provide that no director can qualify as independent unless the Board affirmatively determines that the director has no material relationship with the listed company. The Board has adopted the following standards in determining whether or not a director has a material relationship with the Company. These standards are contained in Ford's Corporate Governance Principles and may be found at the Company's website, www.corporate.ford.com.

Employee or Former Employee.  No director who is an employee or a former employee of the Company can be independent until three years after termination of such employment.

Independent Auditor Affiliation.  No director who is, or in the past three years has been, affiliated with or employed by the Company's present or former independent auditor can be independent until three years after the end of the affiliation, employment, or auditing relationship.

Interlocking Directorship.  No director can be independent if he or she is, or in the past three years has been, part of an interlocking directorship in which an executive officer of the Company serves on the compensation committee of another company that employs the director.

Additional Compensation.  No director can be independent if he or she is receiving, or in the last three years has received, more than $100,000 during any 12-month period in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).

Immediate Family Members.  Directors with immediate family members in the foregoing categories are subject to the same three-year restriction.

Other Relationships.  The following commercial, charitable, and educational relationships will not be

considered to be material relationships that would impair a director's independence:

    (i)
    Sales and Purchases of Products/Services. If within the preceding three years a Ford director was an executive officer or employee of another company (or an immediate family member of the director was an executive officer of such company) that did business with Ford and either: (a) the annual sales to Ford were less than the greater of $1 million or two percent of the total annual revenues of such company, or (b) the annual purchases from Ford were less than the greater of $1 million or two percent of the total annual revenues of Ford, in each case for any of the three most recently completed fiscal years.

    (ii)
    Indebtedness. If within the preceding three years a Ford director was an executive officer of another company which was indebted to Ford, or to which Ford was indebted, and either: (a) the total amount of such other company's indebtedness to Ford was less than two percent of the total consolidated assets of Ford, or (b) the total amount of Ford's indebtedness to such other company was less than two percent of the total consolidated assets of such other company, in each case for any of the three most recently completed fiscal years.

    (iii)
    Charitable Contributions. If within the preceding three years a Ford director served as an executive officer, director, or trustee of a charitable or educational organization, and Ford's discretionary contributions to the organization were less than the greater of $1 million or two percent of that organization's total annual discretionary receipts for any of the three most recently completed fiscal years. (Any matching of charitable contributions will not be included in the amount of Ford's contributions for this purpose.)

Based on these independence standards and all of the relevant facts and circumstances, the Board determined that none of the following directors had any material relationship with the Company and, thus, are independent: Stephen G. Butler, Kimberly A. Casiano, Anthony F. Earley, Jr., William W. Helman IV, William E. Kennard, John C. Lechleiter, Beth E. Mooney, John L. Thornton, John B. Veihmeyer, Lynn M. Vojvodich, and John S. Weinberg. Additionally, the Board has

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determined that each of Stephen G. Butler, Kimberly A. Casiano, Beth E. Mooney, John B. Veihmeyer, and Lynn M. Vojvodich is independent under the heightened SEC independence standards for audit committees and that each of Anthony F. Earley, Jr., John C. Lechleiter, John L. Thornton, and John S. Weinberg is independent under the additional NYSE independence standards for compensation committees. Additionally, Ellen R. Marram, who did not stand for election at the 2019 Annual Meeting, was determined by the Board to have had no material relationship with the Company during the time of her service and, thus, was independent.

DISCLOSURE OF RELEVANT FACTS AND CIRCUMSTANCES

With respect to the independent directors listed above, the Board considered the following relevant facts and circumstances in making the independence determinations:

From time to time during the past three years, Ford purchased goods and services from, sold goods and

services to, or financing arrangements were provided by, various companies with which certain directors were or are affiliated either as a member of such company's board of directors or, in the case of Ms. Mooney and Messrs. Earley and Weinberg, as an officer of such a company. In addition to Ms. Mooney and Messrs. Earley and Weinberg, these directors included Mr. Kennard, Ms. Marram, Mr. Thornton, Ms. Vojvodich, and Mr. Veihmeyer. The Company also made donations to certain institutions with which certain directors are affiliated. These included Ms. Casiano, Mr. Earley, Dr. Lechleiter, Ms. Marram, Ms. Mooney, Mr. Thornton, and Mr. Veihmeyer. In addition, the Company made charitable donations in each director's name in lieu of holiday gifts. None of the relationships described above was material under the independence standards contained in our Corporate Governance Principles.

Codes of Ethics

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The Company has published on its website (www.corporate.ford.com) its code of conduct handbook, which applies to all officers and employees, a code of ethics for directors, and a code of ethics for the Company's chief executive officer as well as senior financial and accounting personnel. Any waiver of, or amendments to, the codes of ethics for directors or

executive officers, including the chief executive officer, the chief financial officer, and the principal accounting officer, must be approved by the Nominating and Governance Committee, and any such waivers or amendments will be disclosed promptly by the Company by posting such waivers or amendments to its website. The Nominating and Governance Committee also reviews management's monitoring of compliance with the Company's Code of Conduct. Printed copies of each of the codes of ethics referred to above are also available by writing to our Investor Relations Department at Ford Motor Company, Investor Relations, P.O. Box 6248, Dearborn, MI 48126.

Communications with the Board and Annual Meeting Attendance

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The Board has established a process by which you may send communications to the Board as a whole, the non-employee Directors as a group, or the Lead Independent Director. You may send communications to our Directors, including any concerns regarding Ford's accounting, internal controls, auditing, or other matters, to the following address: Board of Directors (or Lead Independent Director or non-employee Directors as a

group, as appropriate), Ford Motor Company, P.O. Box 685, Dearborn, MI 48126-0685. You may submit your concern anonymously or confidentially. You may also indicate whether you are a shareholder, customer, supplier, or other interested party.

Communications relating to the Company's accounting, internal controls, or auditing matters will be relayed to the Audit Committee. Communications relating to governance will be relayed to the Nominating and Governance Committee. All other communications will be referred to other areas of the Company for handling as appropriate under the facts and circumstances outlined in the communications. Responses will be sent to those that include a return address, as appropriate.

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You may also find a description of the manner in which you can send communications to the Board on the Company's website (www.corporate.ford.com).

All members of the Board are expected to participate in the annual meeting, unless unusual circumstances

would prevent such participation. Last year, of the thirteen then current members of the Board, thirteen attended the virtual annual meeting.

Beneficial Stock Ownership

FIVE PERCENT BENEFICIAL OWNERS OF COMMON STOCK

Pursuant to SEC filings, the Company was notified that as of December 31, 2019, the entities included in the table below had more than a 5% ownership interest of Ford common stock, or owned securities convertible into more than 5% ownership of Ford common stock, or owned a combination of Ford common stock and securities convertible into Ford common stock that could result in more than 5% ownership of Ford common stock.

 
   
   
   
   
   
 
  Name of Beneficial Owner
  Address of Beneficial Owner
  Ford
Common Stock

  Percent of
Outstanding Ford
Common Stock

   

 

State Street Corporation and certain of its affiliates*

  State Street Financial Center
One Lincoln Street
Boston, MA 02111
  360,996,261   9.27%    

 

The Vanguard Group and certain of its affiliates

  The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
  306,343,834   7.86%    

 

BlackRock, Inc. and certain of its affiliates

  BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
  309,823,273   8.0%    
*
State Street Bank and Trust Company is the trustee for Ford common stock in the Ford defined contribution plans master trust, which beneficially owns 4.6% of the common stock of Ford. In this capacity, State Street Bank and Trust Company has voting power over the shares in certain circumstances.

FIVE PERCENT BENEFICIAL OWNERS OF CLASS B STOCK

As of February 1, 2020, the persons included in the table below beneficially owned more than 5% of the outstanding Class B Stock.

 
   
   
   
   
   
 
  Name of Beneficial Owner
  Address of Beneficial Owner
  Ford
Class B Stock

  Percent of
Outstanding Ford
Class B Stock

   
    Lynn F. Alandt*   Ford Estates, 2000 Brush, Detroit, MI 48226   9,815,321   13.85%    
    David P. Larsen, as trustee of various trusts**   Ford Estates, 2000 Brush, Detroit, MI 48226   10,641,319   15.02%    
    Voting Trust***   Ford Estates, 2000 Brush, Detroit, MI 48226   70,778,212   99.90%    
*
Includes shares beneficially owned in either an individual or fiduciary capacity as sole trustee or as a co-trustee.

**
Represents beneficial ownership of shares held in a fiduciary capacity as sole trustee or as a co-trustee. Mr. Larsen disclaims beneficial ownership of these shares.

***
These shares of Class B Stock are held in a voting trust of which Edsel B. Ford II, William Clay Ford, Jr., Benson Ford, Jr., and Alfred B. Ford are the trustees. The trust is of perpetual duration until terminated by the vote of shares representing over 50% of the participants and requires the trustees to vote the shares as directed by a plurality.

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BENEFICIAL STOCK OWNERSHIP

The following table shows how much Ford stock each current director, nominee, and Named Executive beneficially owned as of February 1, 2020. No director, nominee, or executive officer, including Named Executives, beneficially owned more than 0.16% of Ford's total outstanding common stock nor did any such person beneficially own more than 0.01% of Ford common stock units as of February 1, 2020. Executive officers held options exercisable on or within 60 days after February 1, 2020 to buy 4,834,634 shares of Ford common stock.

 

Name

  Ford
Common
Stock 1,2
  Ford
Common
Stock
Units 3
   

 

Stephen G. Butler**

  158,869   167,016    

 

Kimberly A. Casiano*

  113,566   156,425    

 

Anthony F. Earley, Jr.*

  158,744   70,389    

 

James D. Farley, Jr.

  1,615,449   0    

 

James P. Hackett*

  1,203,708   0    

 

William W. Helman IV*

  121,919   41,754    

 

Joseph R. Hinrichs

  1,943,338   1,119    

 

William E. Kennard*

  92,369   0    

 

Name

  Ford
Common
Stock 1,2
  Ford
Common
Stock
Units 3
   

 

John C. Lechleiter*

  252,485   5,640    

 

Beth E. Mooney*

  12,098   0    

 

Robert L. Shanks

  1,681,170   0    

 

Tim Stone

  460,878   0    

 

John L. Thornton*

  204,063   323,519    

 

John B. Veihmeyer*

  53,603   0    

 

Lynn M. Vojvodich*

  59,513   0    

 

John S. Weinberg*

  102,139   0    


 

Name

  Ford
Common
Stock 1,2
  Ford
Common
Stock
Units 3
  Ford
Class B
Stock
  Percent of
Outstanding
Ford
Class B
Stock
   

 

Edsel B. Ford II*

  1,307,524   171,082   5,347,181   7.55%    

 

William Clay Ford, Jr.*

  6,117,581   176,930   14,244,283   20.10%    

 

All Directors and Executive Officers as a group

                   

 

22 persons beneficially owned 0.45% of Ford common stock or securities convertible into Ford common stock as of February 1, 2020

                   
*
Indicates Director Nominees

**
Mr. Butler is not standing for re-election at the 2020 Annual Meeting.

1
For executive officers, included in the amounts for "All Directors and Executive Officers as a group" are Restricted Stock Units issued under our Long-Term Incentive Plans ("LTI Plans") as long-term incentive grants in 2019 and prior years for retention and other incentive purposes.

    In addition, amounts shown include Restricted Stock Units issued under the LTI Plans as follows: 544,533 units for Mr. Shanks; 808,141 units for William Clay Ford, Jr.; 846,679 units for Mr. Farley; 838,726 units for Mr. Hinrichs; 460,878 units for Mr. Stone; and 1,009,133 units for Mr. Hackett.

    In addition, amounts shown include Restricted Stock Units issued under the 2014 Stock Plan for Non-Employee Directors of Ford Motor Company ("2014 Plan") as follows: 152,869 units for Mr. Butler; 105,403 units for Ms. Casiano; 107,686 units for Mr. Earley; 92,369 units for Mr. Kennard; 162,485 units for Dr. Lechleiter; 12,098 units for Ms. Mooney; 53,603 units for Mr. Veihmeyer; 59,513 units for Ms. Vojvodich; and 102,139 units for Mr. Weinberg.

    Included in the stock ownership shown in the table above: Edsel B. Ford II has disclaimed beneficial ownership of 393,285 shares of common stock and 966,194 shares of Class B Stock that are either held directly by his immediate family or by charitable funds which he controls. William Clay Ford, Jr., has disclaimed beneficial ownership of 706,687 shares of Class B Stock that are either held directly by members of his immediate family or indirectly by members of his immediate family in trusts in which Mr. Ford has no interest. Present directors and executive officers as a group have disclaimed beneficial ownership of a total of 393,285 shares of common stock and 1,672,881 shares of Class B Stock.

    No director or executive officer had pledged shares of common stock as security or hedged their exposure to common stock.

2
Also, on February 1, 2020 (or within 60 days after that date), the Named Executives listed below have rights to acquire shares of common stock through the exercise of stock options under Ford's stock option plans (which amounts are included in the "Ford Common Stock" column), as follows:
   
   
   
   
 

 

Person

  Number of Shares    
 

 

James D. Farley, Jr.

  272,017    
 

 

William Clay Ford, Jr.

  3,448,490    
 

 

James P. Hackett

  0    
 
   
   
   

 

Person

  Number of Shares    

 

Joseph R. Hinrichs

  342,664    

 

Tim Stone

  0    

 

Robert L. Shanks

  468,636    
3
In general, these are common stock units credited under a deferred compensation plan and payable in cash and in the cases of William Clay Ford, Jr., and Joseph R. Hinrichs, include stock units under a benefit equalization plan.

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Certain Relationships and Related Party Transactions

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POLICY AND PROCEDURE FOR REVIEW AND APPROVAL OF RELATED PARTY TRANSACTIONS

Business transactions between Ford and its officers or directors, including companies in which a director or officer (or an immediate family member) has a substantial ownership interest or a company where such director or officer (or an immediate family member) serves as an executive officer ("related party transactions") are not prohibited. In fact, certain related party transactions can be beneficial to the Company and its shareholders.

It is important, however, to ensure that any related party transactions are beneficial to the Company. Accordingly, any related party transaction, regardless of amount, is submitted to the Nominating and Governance Committee in advance for review and approval. All existing related party transactions are reviewed at least annually by the Nominating and Governance Committee. The Office of the General Counsel reviews all such related party transactions, existing or proposed, prior to submission to the Nominating and Governance Committee, and our General Counsel opines on the appropriateness of each related party transaction. The Nominating and Governance Committee may, at its discretion, consult with outside legal counsel.

Any director or officer with an interest in a related party transaction is expected to recuse himself or herself from any consideration of the matter.

The Nominating and Governance Committee's approval of a related party transaction may encompass a series of subsequent transactions contemplated by the original approval, i.e., transactions contemplated by an ongoing business relationship occurring over a period of time. Examples include transactions in the normal course of business between the Company and a dealership owned by a director or an executive officer (or an immediate family member thereof), transactions in the normal course of business between the Company and financial institutions with which a director or officer may be associated, and the ongoing issuances of purchase orders or releases against a blanket purchase order made in the normal course of business by the Company

to a business with which a director or officer may be associated. In such instances, any such approval shall require that the Company make all decisions with respect to such ongoing business relationship in accordance with existing policies and procedures applicable to non-related party transactions (e.g., Company purchasing policies governing awards of business to suppliers, etc.).

In all cases, a director or officer with an interest in a related party transaction may not attempt to influence Company personnel in making any decision with respect to the transaction.

RELATED PARTY TRANSACTIONS

In February 2002, Ford entered into a Stadium Naming and License Agreement with The Detroit Lions, Inc. (the "Lions"), pursuant to which we acquired for $50 million, paid by us in 2002, the naming rights to a new domed stadium located in downtown Detroit at which the Lions began playing their home games during the 2002 National Football League season. We named the stadium "Ford Field." The term of the naming rights agreement is 25 years, which commenced with the 2002 National Football League season. Benefits to Ford under the naming rights agreement include exclusive exterior entrance signage and predominant interior promotional signage. Beginning in 2005, the Company also agreed to provide to the Lions, at no cost, eight new model year Ford, Lincoln or Mercury brand vehicles manufactured by Ford in North America for use by the management and staff of Ford Field and the Lions and to replace such vehicles in each second successive year, for the remainder of the naming rights agreement. The cost incurred during 2019 was $127,874. William Clay Ford, Jr., is a minority owner and is a director and officer of the Lions.

In 2014, Ford entered into a Sponsorship Agreement with a wholly owned subsidiary of the Lions to be the exclusive title sponsor of an NCAA sanctioned, men's college football "Bowl" game to be played in each of the 2014-2016 seasons at Ford Field. We named the Bowl the "Quick Lane Bowl" for our Quick Lane Tire & Auto Center brand and acquired several broadcast television messages, event signage, and other advertising in exchange for a sponsorship fee. In 2016, the Company extended its sponsorship of the Quick Lane Bowl for another three years to cover the 2017-2019 seasons. The cost incurred during 2019 was $715,000. We extended our sponsorship of the Quick Lane Bowl through 2022 as follows: 2020: $715,000; 2021: $736,000; and 2022: $758,600.

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Paul Alandt, Lynn F. Alandt's husband, is a minority owner of two Ford franchised dealerships and a Lincoln franchised dealership. In 2019, Ford charged the dealerships about $182.0 million for products and services in the ordinary course of business. In turn, Ford paid the dealerships about $32.7 million for services in the ordinary course of business. Also in 2019, Ford Motor Credit Company LLC, a wholly owned entity of Ford, provided about $290.0 million of financing to dealerships owned by Mr. Alandt and paid about $1.6 million to them in the ordinary course of business. The dealerships paid Ford Credit about $287.2 million in the ordinary course of business. Additionally, in 2019, Ford Credit purchased retail installment sales contracts and Red Carpet Leases from the dealerships in amounts of about $22.4 million and $116.0 million, respectively.

In March 2001, Marketing Associates, LLC (dba OneMagnify), an entity in which Edsel B. Ford II and his family have a controlling equity interest, acquired all of the assets of the Marketing Associates Division of Lason Systems, Inc. Before the acquisition, the Marketing Associates Division of Lason Systems, Inc. provided various marketing and related services to the Company and this continued following the acquisition. In 2019, the Company paid Marketing Associates, LLC approximately $63.4 million for marketing and related services provided in the ordinary course of business.

In April 2016, the Company approved an investment of up to $10 million over five years in Fontinalis Capital Partners II, a venture capital fund that invests in next-generation mobility start-up entities. As of March 1, 2020, we have invested $9.0 million. Our investment has yielded several benefits, including: (i) increased early exposure to possible mobility investments; (ii) the ability to invest directly in an entity whether or not the investment fund invests in the entity; and (iii) increased exposure to venture capital mobility expertise. As of January 1, 2020, William Clay Ford, Jr. had a 7.6% interest and Lynn F. Alandt had a 4% interest in the investment fund.

During 2019, the Company employed Henry Ford III, son of Edsel B. Ford II, as an Associate Director in our global Corporate Strategy skill team. Henry Ford III received 2019 compensation of approximately $182,322 consisting primarily of salary, bonus, and stock awards.

During 2019, the Company employed the husband of Marcy S. Klevorn, former President, Mobility, as a Senior Project Manager in our Information Technology skill team. He received 2019 compensation of approximately $182,191 consisting primarily of salary and bonus. Ms. Klevorn retired from Ford effective October 1, 2019.

During 2019, the Company employed Alexandra Ford English, daughter of William Clay Ford, Jr., as a member of our Automated Vehicle Business Team. Ms. Ford English received 2019 compensation of approximately $294,829, consisting primarily of salary, bonus, and stock awards.

During 2019, the Company employed the husband of Catherine O'Callaghan, Controller and CFO Automotive, as a Manager, Marketing Sales & Service. He received 2019 compensation of approximately $421,234, consisting primarily of salary, bonus, and stock awards.

Pursuant to SEC filings, the Company was notified that as of December 31, 2019, State Street Corporation, and its affiliate State Street Bank and Trust Company, State Street Financial Center, One Lincoln Street, Boston, MA 02111, and certain of its affiliates, owned approximately 9.27% of our common stock. During 2019, the Company paid State Street Corporation and its affiliates approximately $3.9 million in the ordinary course of business.

Pursuant to SEC filings, the Company was notified that as of December 31, 2019, BlackRock, Inc., 55 East 52nd Street, New York, NY 10022, and certain of its affiliates, owned approximately 8.0% of the Company's common stock. During 2019, the Company paid BlackRock, Inc. approximately $16.6 million in the ordinary course of business.

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The following chart shows the process for identification and disclosure of related party transactions.

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Government Relations Activities

Ford believes that relations with governmental entities plays a key role in supporting regulations and legislation that govern our business now and into the future. We also believe that being transparent in our government relations activities is good governance and benefits our shareholders. That's why in the third quarter of 2019 we posted to the following website disclosures concerning our political and lobbying activities: (https://corporate.ford.com/content/dam/corporate/en/company/
government-relations/ford-motor-company-report-of-2019-us-political-activity.pdf)

We urge you to visit the website to gain an understanding of our policies and processes regarding political and lobbying activity. Our disclosures include certain trade associations to which we belong, Section 527 and 501(c)(4) contributions, Ford Political Action Committee contributions, and our governance of such contributions. The site also contains various links to our federal disclosure reports. CPA-Zicklin, an independent index that rates corporate disclosures relative to political and lobbying activities, has rated our disclosure in the top-quartile of its index. We believe you will find the disclosure informative, relevant, and help you to better understand how and why we seek to influence legislation and regulations that govern our business.

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Proposal 1. Election of Directors

IDENTIFICATION OF DIRECTORS

The Charter of the Nominating and Governance Committee provides that the Committee conducts all necessary and appropriate inquiries into the background and qualifications of possible candidates as directors. The Committee identifies candidates through a variety of means, including search firms, recommendations from members of the Committee and the Board, including the Executive Chairman and the President and CEO, and suggestions from Company management. The Committee has the sole authority to retain and terminate any search firm to be used to assist it in identifying and evaluating candidates to serve as directors of the Company. The Company on behalf of the Committee has paid fees to third-party firms to assist the Committee in the identification and evaluation of potential Board members.

Our newest director is Beth E. Mooney. Ms. Mooney was identified and proposed to the Committee by the Chair of the Nominating and Governance Committee. Ms. Mooney was interviewed prior to her election by the Chair of the Nominating and Governance Committee, the Chairman of the Board, the President and CEO, and Edsel B. Ford II. Upon recommendation of the Nominating and Governance Committee, the Board elected Ms. Mooney on July 10, 2019, with immediate effect.

Thirteen directors will be elected at this year's annual meeting. Each director will serve until the next annual meeting or until he or she is succeeded by another qualified director who has been elected. Mr. Butler, having reached our mandatory retirement age of 72, will not stand for re-election at the 2020 Annual Meeting of Shareholders.

We will vote your shares as you specify when providing your proxy. If you do not specify how you want your shares voted when you provide your proxy, we will vote them for the election of all of the nominees listed below. If unforeseen circumstances (such as death or disability) make it necessary for the Board of Directors to substitute another person for any of the nominees, we will vote your shares for that other person.

QUALIFICATIONS CONSIDERED FOR NOMINEES

Because Ford is a large and complex company, the Nominating and Governance Committee considers numerous qualifications when considering candidates for the Board. In addition to the qualifications listed below, among the most important qualities directors should possess are the highest personal and professional ethical standards, integrity, and values. They should be committed to representing the long-term interests of all shareholders. Directors must also have practical wisdom and mature judgment. Directors must be objective and inquisitive. Ford recognizes the value of diversity, and we endeavor to have a diverse Board, with experience in business, international operations, finance, manufacturing and product development, marketing and sales, government, education, technology, and in areas that are relevant to the Company's global activities. The biographies of the nominees show that, taken as a whole, the current slate of director nominees possesses these qualifications. Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively, including making themselves available for consultation outside of regularly scheduled Board meetings, and should be committed to serve on the Board for an extended period of time. Directors should also be prepared to offer their resignation in the event of any significant change in their personal circumstances that could affect the discharge of their responsibilities as directors of the Company, including a change in their principal job responsibilities.

Each of the nominees for director is now a member of the Board of Directors, which met seven times during 2019. Each of the nominees for director attended at least 75% of the combined Board and committee meetings held during the periods served by such nominee in 2019. The nominees provided the following information about themselves as of the latest practical date. Additionally, for each director nominee we have disclosed the particular experience, qualifications, attributes, or skills that led the Board to conclude that the nominee supports the Company's strategy and thus, should serve as a director.

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Kimberly A. Casiano

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Age: 62

Independent Director Since: 2003

Committees: Audit, Nominating and Governance, Sustainability and Innovation

Experience: Ms. Casiano has been the President of Kimberly Casiano & Associates since 2010. Her firm provides advisory services in marketing, recruiting, communications, advocacy, and diversity. From 1994 through 2009, Ms. Casiano served as President and Chief Operating Officer of Casiano Communications, Inc., a U.S. Hispanic media and direct marketing company. She joined the company in 1987 and held various management positions. Prior to that, Ms. Casiano was a consultant in the Caribbean and Latin America for the U.S. Agency for International Development (A.I.D.) of the U.S. Department of State. Ms. Casiano is a member of the founding Board of Directors of the Latino Corporate Directors Association and the Board of Advisors of Moffitt Cancer Center in Tampa.

Reasons for Nomination: Ms. Casiano has extensive domestic and international experience in marketing, sales, media, advertising, CRM, and direct marketing, particularly in U.S. Hispanic and Latin American markets. Ford benefits from Ms. Casiano's global business and executive experience cultivated through years spent managing her own company. Ms. Casiano consistently provides Ford with valuable insight for our "where to play and how to win" analyses, enterprise risk management systems, and Environmental, Social & Governance (ESG) strategy.

Current Public Company Directorships: Mutual of America

Public Company Directorships Within the Past Five Years: Mead Johnson Nutrition Company

Anthony F. Earley, Jr.

GRAPHIC  

Age: 70

Independent Director Since: 2009

Committees: Compensation (Chair), Nominating and Governance, Sustainability and Innovation

Experience: Mr. Earley was the Executive Chairman of PG&E Corporation from March 2017 until December 2017. From September 2011 until February 2017, he served as the Chairman, Chief Executive Officer, and President of PG&E Corporation, which filed for bankruptcy on January 29, 2019 as a result of potential liabilities for wildfires in California. Before joining PG&E Corporation, Mr. Earley served in a number of executive leadership roles at DTE Energy including Executive Chairman, Chairman, Chief Executive Officer, President, and Chief Operating Officer. In addition, Mr. Earley served as President and Chief Operating Officer of Long Island Lighting Company. Mr. Earley also served as an officer in the United States Navy nuclear submarine program where he was qualified as a chief engineer officer. Mr. Earley currently serves on the boards of United Way Worldwide, CLEAResult, and Southern Company. He also serves as Chairman of the Board of the Detroit Zoological Society.

Reasons for Nomination: Among other qualifications, Mr. Earley brings a wealth of executive leadership experience to the Board. These experiences complement our plan by providing valuable insight into ways in which Ford can operate profitably at the current demand, while changing our product mix. His expertise in electrical infrastructure complements our electrification strategy by providing key insight into the development of innovative products such as the development of hybrid and electric vehicles our customers want and value.

Current Public Company Directorships: Southern Company

Public Company Directorships Within the Past Five Years: PG&E Corporation

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Edsel B. Ford II

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Age: 71

Director Since: 1988

Committees: Finance, Sustainability and Innovation                                            

Experience: Mr. Ford serves as a consultant to Ford and has served in this capacity since 1999. Previously, Mr. Ford served as a Vice President of Ford Motor Company and as the former President and Chief Operating Officer of Ford Motor Credit Company.

Reasons for Nomination: Mr. Ford has a wealth of valuable experience in the automotive industry. During his time as an executive at the Company and as a consultant for the Company, he developed deep knowledge of the Company's business. Mr. Ford's life-long affiliation with the Company provides the Board with a unique historical perspective and a focus on the long-term interests of the Company. In his role as consultant to the Company, Mr. Ford brings significant value to Board deliberations with his experience in various stakeholder relationships, both domestically and abroad, including relationships with dealers, non-government organizations, employees, and the communities in which Ford has a significant presence. In addition, Mr. Ford's experience in creative and technology-driven marketing allows him to provide valuable insight in developing marketing and vehicle distribution strategies.

Public Company Directorships Within the Past Five Years: International Speedway Corporation

William Clay Ford, Jr.

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Age: 62

Director Since: 1988

Committees: Finance (Chair), Sustainability and Innovation                                  

Experience: Mr. Ford has held a number of management positions within Ford, including Vice President — Commercial Truck Vehicle Center. Mr. Ford was Chair of the Finance Committee from 1995 until October 2001 and was elected Chairman of the Board of Directors in January 1999. He served as Chief Executive Officer of the Company from October 2001 until September 2006 when he became Executive Chairman. Mr. Ford is also Vice Chairman of the Detroit Lions, Inc., former Chairman of the Detroit Economic Club, and trustee of the Henry Ford Museum. He also is a member of the board of Business Leaders for Michigan.

Reasons for Nomination: Mr. Ford has served in a variety of key roles at Ford and understands the Company and its various stakeholders. His long-term perspective and lifelong commitment to the Company adds significant value to the Company's stakeholder relationships. Mr. Ford, an early and influential advocate for sustainability at the Company, has long been recognized as a leader in advancing mobility, connectivity, and electrification in the automobile industry, which adds significant value to Board deliberations.

Public Company Directorships Within the Past Five Years: eBay Inc.

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James P. Hackett

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Age: 64

Director Since: 2017

Independent Director: September 2013-March 2016                                  

Committees: N/A

Experience: Mr. Hackett was elected President and Chief Executive Officer of Ford Motor Company in May 2017. Since March 2016, Mr. Hackett served as Chairman of Ford Smart Mobility LLC, a subsidiary of Ford formed to accelerate the Company's plans to design, build, grow, and invest in emerging mobility services. Prior to joining Ford Smart Mobility, Mr. Hackett was a member of the Ford Motor Company Board of Directors starting in 2013. As a member of the Sustainability and Innovation Committee, he was actively involved with the Ford senior leadership team in launching the Company's Ford Smart Mobility plan. He also served on the Audit and the Nominating and Governance Committees. Mr. Hackett was vice chairman of Steelcase, a global leader in the office furniture industry, from 2014 to 2015. He retired as Chief Executive Officer of Steelcase in February 2014, after having spent 20 years leading the Grand Rapids-based office furniture company.

Reasons for Nomination: As a consumer-focused, forward-thinking leader, Mr. Hackett is credited with guiding Steelcase to becoming a global leader in the office furniture industry. During his 30 years there, he helped transform the office furniture company from traditional manufacturer to industry innovator. Having spent his career focused on the evolving needs of consumers, Mr. Hackett is equipped to lead the Company's commitment to becoming the world's most trusted company, designing smart vehicles for a smart world that help people move more safely, confidently, and freely.

Public Company Directorships Within the Past Five Years: Steelcase Inc. and Fifth Third Bancorp

William W. Helman IV

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Age: 61

Independent Director Since: 2011

Committees: Finance, Nominating and Governance, Sustainability and Innovation (Chair)

Experience: Mr. Helman is a General Partner at Greylock Partners, a venture capital investment firm focused on early stage investments in technology, enterprise software, and consumer internet. He joined Greylock in 1984 and served as Managing Partner from 1999 to 2013. Mr. Helman is on the board of the Broad Institute and on the Board of Trustees of Vornado Realty Trust.

Reasons for Nomination: Mr. Helman's experience with technology investments and social media marketing provides a unique and valued perspective as these issues are becoming increasingly important as the auto industry adopts new technologies, develops innovative solutions to personal mobility challenges, and adapts to new social media techniques. Mr. Helman's expertise in investing in new innovations offers the Board valuable insight as Ford continues to invest in connectivity and mobility technologies in order to deliver innovative products our customers want and value.

Current Public Company Directorships: Vornado Realty Trust

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William E. Kennard

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Age: 63

Independent Director Since: 2015

Committees: Finance, Nominating and Governance (Chair), Sustainability and Innovation

Experience: Mr. Kennard is the Chairman and co-founder of Velocitas Partners LLC, an asset management firm. Mr. Kennard served as chairman of the U.S. Federal Communications Commission (FCC) from 1997 to 2001 and served as the FCC's general counsel from 1993 to 1997. As U.S. Ambassador to the European Union from 2009 to 2013, he worked to eliminate regulatory barriers to commerce and to promote transatlantic trade, investment, and job creation. In addition to his public service, Mr. Kennard was a managing director of The Carlyle Group from 2001 to 2009 where he led investments in the telecommunications and media sectors. He also serves as a trustee of Yale University.

Reasons for Nomination: Mr. Kennard has extensive experience in the public policy, law, telecommunications, and private equity fields. In particular, he has shaped policy and pioneered initiatives to help technology benefit consumers worldwide. Mr. Kennard is regarded as a champion for consumers in the digital age, and we believe this expertise, unique perspective, risk management skills, and first-hand knowledge of the technological regulatory landscape help guide our strategy as we accelerate our innovative work in the areas of in-car connectivity and mobility solutions in a smart world.

Current Public Company Directorships: AT&T Inc., MetLife, Inc., and Duke Energy Corporation

John C. Lechleiter

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Age: 66

Independent Director Since: 2013

Committees: Compensation, Nominating and Governance                                  

Experience: Dr. Lechleiter retired as Eli Lilly and Company's President and Chief Executive Officer on December 31, 2016, after 37 years with the company. He also served as Chairman of the Board of Directors of Lilly from 2009 through May 2017. Dr. Lechleiter joined Lilly in 1979 as a senior organic chemist in process research and development and became head of that department in 1982. In 1984, he began serving as director of pharmaceutical product development for the Lilly Research Center. He later held roles in project management, regulatory affairs, product development, and pharma operations. In 2005, he was named Lilly's President and Chief Operating Officer and joined the Board of Directors. Dr. Lechleiter is a member of the American Chemical Society. He serves on the boards of the Battelle Memorial Institute, Indiana Biosciences Research Institute, Indy Championship Fund, and Lilly Endowment, Inc. He is a member emeritus of the board of the Central Indiana Corporate Partnership.

Reasons for Nomination: Dr. Lechleiter's experience as a chairman and chief executive officer of a multinational company and his knowledge of science, marketing, management, and international business aid the Board in overseeing the management of a global company. Dr. Lechleiter's background and experience in research and development also provide the Company with meaningful insight as it accelerates the development of new products. Additionally, Dr. Lechleiter's extensive experience in managing risk in a highly regulated industry operating in a changing landscape will assist the Board as the Company adapts to an increasingly complex and dynamic environment, both in the core business and autonomous vehicles.

Public Company Directorships Within the Past Five Years: Eli Lilly and Company and Nike, Inc.

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Beth E. Mooney

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Age: 65

Independent Director Since: 2019

Committees: Audit, Nominating and Governance                                  

Experience: Ms. Mooney has served as Chairman and Chief Executive Officer of KeyCorp since May 2011 and retires from KeyCorp effective May 1, 2020. She joined the company in April 2006 as Vice Chair of Key Community Bank, and in 2010 was elected to KeyCorp board of directors. Previously, Ms. Mooney was Senior Executive Vice President and Chief Financial Officer at Alabama-based AmSouth Bancorporation (now Regions Financial Corp.) and held senior positions at Bank One Corp., Citicorp Real Estate, Inc., Hall Financial Group, and Republic Bank of Texas/First Republic. Ms. Mooney is a director of The Bank Policy Institute, serving as chair of its BITS technology-policy division. Ms. Mooney serves as the board chair of The Cleveland Clinic, and serves on the boards of Catalyst and The Conference Board. She is also a member of The Clearing House Supervisory Board, the Business Roundtable, and the Business Council.

Reasons for Nomination: Ms. Mooney has a wealth of experience and deep understanding of the financial industry. Her extensive banking and business experience bring a unique perspective that will enhance the Board during this transformational time in the Company and the industry. Additionally, Ms. Mooney's extensive experience in risk management and executive matters will provide Ford with valuable insight into these key areas.

Current Public Company Directorships: AT&T Inc. and KeyCorp

John L. Thornton

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Age: 66

Independent Director Since: 1996

Committees: Compensation, Finance, Nominating and Governance                                  

Experience: Mr. Thornton has served as Executive Chairman of Barrick Gold Corporation since April 2014. He also serves as Non-Executive Chairman of PineBridge Investments, a global asset manager. Mr. Thornton serves on the Board of SparkCognition, a leading industrial artificial intelligence company. He is a Professor, Director of the Global Leadership Program, and a Member of the Advisory Board of the Tsinghua University School of Economics and Management in Beijing. He is also Chairman Emeritus of the Brookings Institution in Washington, D.C. Mr. Thornton retired as President and Director of The Goldman Sachs Group, Inc. in 2003. Mr. Thornton also previously served as Chairman of Goldman Sachs Asia and as Co-Chief Executive of Goldman Sachs International, overseeing the firm's business in Europe, the Middle East, and Africa. Mr. Thornton is Co-Chair of the Asia Society, and is also a trustee, advisory board member or member of, the China Investment Corporation (CIC), Confucius Institute Headquarters, King Abdullah University of Science and Technology, McKinsey Advisory Council, Schwarzman Scholars, and the African Leadership Academy. He is also Vice Chairman of the Morehouse College Board of Trustees.

Reasons for Nomination: Mr. Thornton has extensive international business and financial experience. Mr. Thornton brings valuable insight into emerging markets gained through his oversight of the presence of Goldman Sachs International on multiple continents. Mr. Thornton's extensive experience in finance and business matters, both domestically and internationally, is critical to achieving our fitness goals of financing our long-term strategic plan, improving our balance sheet, and creating profitable growth. Mr. Thornton's unique knowledge brings to the Board valuable insight in international business, especially in China, which has become one of the world's most important automotive growth markets.

Current Public Company Directorships: Barrick Gold Corporation

Public Company Directorships Within the Past Five Years: China Unicom (Hong Kong) Limited

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John B. Veihmeyer

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Age: 64

Independent Director Since: 2017

Committees: Audit, Nominating and Governance                                            

Experience: Mr. Veihmeyer served as Chairman of KPMG International from 2014 until his retirement after 40 years with KPMG in September 2017. Before becoming global chairman, Mr. Veihmeyer held numerous leadership roles at KPMG, including U.S. Chairman and Chief Executive Officer from 2010 to 2015, U.S. Deputy Chairman, managing partner of KPMG's Washington, D.C. operations, and global head of Risk Management and Regulatory. Mr. Veihmeyer currently serves as a member of the executive committee of the Board of Trustees of the University of Notre Dame and as a director of the Ladies Professional Golf Association, and Catholic Charities of Washington, D.C. Mr. Veihmeyer previously served as a Trustee of the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board.

Reasons for Nomination: Mr. Veihmeyer has extensive experience in the accounting profession, both in the United States and internationally, as well as executive leadership experience as Chairman and Chief Executive Officer of KPMG. His experience leading KPMG, which has member firms in over 150 countries, has provided Mr. Veihmeyer with significant exposure to business operations in every region of the world. Mr. Veihmeyer also previously served on the board of Catalyst, Inc. and has been recognized for his leadership in diversity and inclusion. Mr. Veihmeyer's financial expertise, executive leadership experience, risk management skills, and international exposure bring value to the Company's Board at an unprecedented time of disruption in the automotive industry and in an increasingly complex regulatory environment.

Lynn M. Vojvodich

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Age: 52

Independent Director Since: 2017

Committees: Audit, Nominating and Governance, Sustainability and Innovation

Experience: Ms. Vojvodich is an advisor to start-up and growth-stage technology companies. Previously, Ms. Vojvodich was Executive Vice President and Chief Marketing Officer of salesforce.com, Inc. ("Salesforce") from September 2013 until February 2017. In this role, she led Salesforce's branding and positioning, public relations, digital marketing, content marketing, marketing campaigns, and strategic events. Before joining Salesforce, Ms. Vojvodich held marketing leadership roles at Microsoft and BEA Systems, and served as a partner with venture capital firm Andreessen Horowitz. She is the founder of Take3, a marketing strategy firm and a member of the Board of Figma, a collaborative design platform that helps teams around the world create software.

Reasons for Nomination: Ms. Vojvodich has a wealth of expertise in marketing technology and innovation, market analysis, and the software industry. As Ford continues to transform itself into the world's most trusted company, Ms. Vojvodich provides valuable guidance regarding how the Company should market and position itself in its automotive and mobility businesses, including the use of digital strategies. Ms. Vojvodich's experience advising start-up and growth-stage technology businesses lends itself to the Company as it continues culture-shaping initiatives to attract talent and deliver a broader suite of mobility products and services.

Current Public Company Directorships: Booking Holdings Inc. and Dell Technologies

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John S. Weinberg

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Age: 63

Independent Director Since: 2016

Committees: Compensation, Finance, Nominating and Governance, Sustainability and Innovation

Experience: Mr. Weinberg became Chairman of the Board of Directors and Executive Chairman of Evercore Inc. in November 2016. Previously, Mr. Weinberg served as Vice Chairman of the Goldman Sachs Group from June 2006 until October 2015. His career at Goldman Sachs spanned more than three decades, with the majority of his time spent in the banking division. Mr. Weinberg currently serves as a board member of New York-Presbyterian Hospital, the Cystic Fibrosis Foundation, and Middlebury College.

Reasons for Nomination: Mr. Weinberg has extensive experience in finance, banking, and capital markets, as well as a deep understanding of Ford, its history, and the needs of its business. During his time with Goldman Sachs, Mr. Weinberg served as a trusted advisor to Ford and other manufacturing clients. As Ford transforms itself into the world's most trusted company, making smart cars for a smart world, Mr. Weinberg's financial and risk management expertise will aid the Company in rapidly improving its fitness to lower costs, reallocate capital, and finance our business plan.

Current Public Company Directorships: Evercore Inc.

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Director Compensation in 2019

 

(a)

  (b)       (c)             (d)     (e)  

      Fees Earned or
Paid in Cash 1
      Stock
Awards 2
    Fees 3   Perquisites/
Evaluation
Vehicles 4


 
Tax
Reimbursement

 
Life
Insurance
Premiums 5


 
All Other
Compensation

 
  Total  

 

Name

  ($)       ($)     ($)   ($)   ($)   ($)   ($)     ($)  
           

 

Stephen G. Butler

  130,000       214,999     0   20,370   19,192   254   39,816     384,815  

 

Kimberly A. Casiano

  100,000       214,999     0   25,199   15,872   254   41,325     356,324  

 

Anthony F. Earley, Jr.

  154,167       214,999     0   13,962   9,990   254   24,206     393,372  

 

Edsel B. Ford II

  100,000       214,999     650,000   20,263   14,149   771   685,183     1,000,182  

 

William W. Helman IV

  120,000       214,999     0   715   0   0   715     335,714  

 

William E. Kennard

  120,000       214,999     0   19,132   11,296   254   30,682     365,681  

 

John C. Lechleiter

  100,000       214,999     0   23,017   18,448   254   41,719     356,718  

 

Ellen R. Marram

  62,500       89,575     0   11,391   8,882   27   20,300     172,375  

 

Beth E. Mooney

  50,400       107,100     0   715   0   32   747     158,247  

 

John L. Thornton

  100,000       214,999     0   13,366   11,822   254   25,442     340,441  

 

John B. Veihmeyer

  100,000       214,999     0   25,121   16,417   254   41,792     356,791  

 

Lynn M. Vojvodich

  100,000       214,999     0   19,182   17,219   254   36,655     351,654  

 

John S. Weinberg

  100,000       214,999     0   20,118   15,757   64   35,939     350,938  
1
Fees.    Effective as of January 1, 2017, the Board of Directors agreed that the following compensation will be paid to non-employee directors of the Company:

Annual Board membership fee

  $ 315,000  

Annual Lead Independent Director fee

  $ 50,000  

Annual Audit Committee chair fee

  $ 30,000  

Annual Compensation Committee chair fee

  $ 25,000  

Annual other Committee chair fees

  $ 20,000  

As discussed in footnote 2 below, approximately 68% ("mandatory portion") of the Annual Board membership fee is paid in Restricted Stock Units ("RSUs"), and in addition, certain directors choose to receive all or a portion of their fees in RSUs pursuant to the 2014 Plan in addition to the mandatory portion. Pursuant to SEC rules, the dollar value of any fees any director elected to receive in RSUs in excess of the fees mandatorily paid in RSUs pursuant to that plan is shown in the "Fees Earned or Paid in Cash" column.

2
2014 Plan. Effective January 1, 2014, the Board adopted the 2014 Stock Plan for Non-Employee Directors of Ford Motor Company. The 2014 Plan was approved by shareholders at the 2014 Annual Meeting. The 2014 Plan is structured so that the mandatory portion of the Annual Board membership fee is paid in RSUs. The amounts shown in column (c) are the grant date values of the RSUs relating to the mandatory portion of fees paid under the 2014 Plan. Each Director also had the option of having some or all of his or her remaining fees paid in RSUs pursuant to the 2014 Plan. The RSUs vest immediately upon grant. Each Director had the option to choose when the RSUs settle into shares of Ford common stock as follows: (i) immediately on the grant date; (ii) the earlier of five years from the date of grant and separation from the Board; or (iii) at separation from the Board. The Board adopted the 2014 Plan because the RSUs settle in shares of common stock, thus further aligning the interests of directors and shareholders. Directors are not permitted to sell, hedge, or pledge the mandatory portion of the Annual Board fees until after separation from the Board, even if the RSUs settle into shares of common stock prior to separation from the Board. In light of the requirement that approximately 68% of annual director fees are paid in RSUs, and that directors may not dispose of such RSUs or shares of stock until after separation from the Board, there is no minimum share ownership requirement for members of the Board. If dividends are paid on common stock, Dividend Equivalents are paid in additional RSUs on RSU balances for those directors whose RSUs have not settled into shares of common stock. For any directors whose RSUs have settled into shares of common stock, they are required to reinvest dividends on such shares into additional shares of common stock until separation from the Board.

3
The amount shown for Edsel B. Ford II reflects the fees he earned pursuant to a January 1999 consulting agreement between the Company and Mr. Ford. The consulting fee is payable quarterly in arrears in cash. Mr. Ford is available for consultation, representation, and other duties under the agreement. Additionally, the Company provides facilities (including office space) and an administrative assistant to Mr. Ford. This agreement will continue until either party ends it with 30 days' notice.


In his role as consultant, Mr. Ford represents the Company with various stakeholders, including dealers, employees, customers, governmental officials through his attendance at numerous functions throughout the year. In particular, Mr. Ford's involvement in Ford Performance Racing has added great value to our Racing teams' success and in Janury 2020 he was recognized by NASCAR with its prestigious Landmark Award for lifetime contributions to racing, one of only six people ever to have been so honored. Mr. Ford's representation enhances Ford's reputation among these various groups and provides a valuable source of goodwill for all our stakeholders.

4
Perquisites and Evaluation Vehicle Program. All amounts shown in this column reflect: (i) the cost of evaluation vehicles provided to Directors; (ii) the cost of a charitable gift made by the Company in the directors' names divided equally among those directors who were members of the Board on December 31, 2019, and (iii) the cost of healthcare insurance premiums for certain directors. We calculate the

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    aggregate incremental costs of providing the evaluation vehicles by estimating the lease fee of a comparable vehicle under our Management Lease Program. The lease fee under that program takes into account the cost of using the vehicle, maintenance, license, title and registration fees, and insurance. We provide non-employee directors with the use of up to two Company vehicles free of charge. Directors are expected to provide evaluations of the vehicles to the Company. The cost of providing these vehicles is included in column (d).

5
Insurance. Ford provides non-employee directors with $200,000 of life insurance which ends when a director retires. A director can choose to reduce life insurance coverage to $50,000 and lower income imputation. Effective January 1, 2014, the non-employee director life insurance program was changed to allow former employees who become directors to participate in the program and keep the life insurance coverage provided to retired employees. The life insurance premiums paid by the Company for each director are included in column (d). Ford also provides non-employee directors with the option to obtain Company provided healthcare insurance at no cost. The healthcare insurance is identical to healthcare insurance provided to employees, except for the employee paid portion of premiums. Eight directors have elected this option and that portion of the premiums that the Company pays on behalf of directors that equals the amount employees typically pay is included in column (d).

Your Board's recommendation: FOR Proposal 1

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Proposal 2. Ratification of Independent Registered Public Accounting Firm

The Audit Committee of the Board of Directors selects and hires the independent registered public accounting firm. You must ratify the Audit Committee's selection for 2020.

The Audit Committee selected PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") to perform an independent audit of the Company's consolidated financial statements and internal control over financial reporting in accordance with standards established by the Public Company Accounting Oversight Board for 2020. PricewaterhouseCoopers is well qualified and has served as our independent registered public accounting firm since 1946. Representatives of PricewaterhouseCoopers will be present at the meeting with the opportunity to make a statement and answer appropriate questions.

Amounts paid by the Company to PricewaterhouseCoopers for audit and non-audit services rendered in 2019 and 2018 are disclosed in the table below.

Ford management will present the following resolution to the meeting:

"RESOLVED, That the selection, by the Audit Committee of the Board of Directors, of PricewaterhouseCoopers LLP as the independent registered public accounting firm to perform an independent audit of the Company's consolidated financial statements and internal control over financial reporting in accordance with standards established by the Public Company Accounting Oversight Board for 2020 is ratified."

Your Board's recommendation: FOR Proposal 2

Fees Paid to Independent Registered Public Accounting Firm

Annually, the Audit Committee pre-approves categories of services to be performed (rather than individual engagements) by PricewaterhouseCoopers. As part of this approval, an amount is established for each category of services (Audit, Audit-Related, Tax Services, and other services). In the event the pre-approved amounts prove to be insufficient, a request for incremental funding will be submitted to the Audit

Committee for approval during the next regularly scheduled meeting. In addition, all new engagements greater than $250,000 will be presented in advance to the Audit Committee for approval. A regular report is prepared for each regular Audit Committee meeting outlining actual fees and expenses paid or committed against approved fees. The Audit Committee approved of all of the fees listed in the table below.

Fees Paid to PricewaterhouseCoopers
  Year-ended
December 31, 2018
($) (000)
  Year-ended
December 31, 2019
($) (000)
 

Audit Fees 1

    37,600     39,200  

Audit-Related Fees 2

    3,700     3,600  

Tax Fees 3

    3,400     3,000  

All Other Fees 4

    1,100     1,700  

TOTAL FEES

    45,800     47,500  
1
Consists of the audit of the financial statements included in the Company's Annual Report on Form 10-K, reviews of the financial statement included in the Company's Quarterly Reports on Form 10-Q, attestation of the effectiveness of the Company's internal controls over financial reporting, preparation of statutory audit reports, and providing comfort letters in connection with Ford Motor Company and Ford Motor Credit Company funding transactions.
2
Consists of support of funding transactions, due diligence for mergers, acquisitions and divestitures, employee benefit plan audits, attestation services, internal control reviews, and assistance with interpretation of accounting standards.

3
Consists of assistance with tax compliance and the preparation of tax returns, tax consultation, planning, and implementation services, assistance in connection with tax audits, and tax advice related to mergers, acquisitions and divestitures. Of the fees paid for tax services, we paid 43% and 59% for tax compliance related services in 2019 and 2018, respectively.

4
Consists of support in business and regulatory reviews and research analysis regarding new markets and strategies, and advisory services related to insurance claims.

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Audit Committee Report

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The Audit Committee is composed of five directors, all of whom meet the independence standards contained in the NYSE Listed Company rules, SEC rules, and Ford's Corporate Governance Principles, and operates under a written charter adopted by the Board of Directors. A copy of the Audit Committee Charter may be found on the Company's website, www.corporate.ford.com. The Audit Committee selects, subject to shareholder ratification, the Company's independent registered public accounting firm.

Ford management is responsible for the Company's internal controls and the financial reporting process. The independent registered public accounting firm, PricewaterhouseCoopers, is responsible for performing independent audits of the Company's consolidated financial statements and internal controls over financial reporting and issuing an opinion on the conformity of those audited financial statements with United States generally accepted accounting principles and on the effectiveness of the Company's internal controls over financial reporting. The Audit Committee monitors the Company's financial reporting process and reports to the Board of Directors on its findings. PricewaterhouseCoopers has served as the Company's independent registered public accounting firm since 1946.

AUDITOR INDEPENDENCE

During the last year, the Audit Committee met and held discussions with management and PricewaterhouseCoopers. The Audit Committee reviewed and discussed with Ford management and PricewaterhouseCoopers the audited financial statements and the assessment of the effectiveness of internal controls over financial reporting contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The Audit Committee

also discussed with PricewaterhouseCoopers the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm's communications with the Audit Committee, as well as by SEC regulations. In conjunction with the mandated rotation of PricewaterhouseCoopers's lead engagement partner, the Audit Committee and its chairperson are also directly involved in the selection of PricewaterhouseCoopers's new lead engagement partner.

PricewaterhouseCoopers submitted to the Audit Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence. The Audit Committee discussed with PricewaterhouseCoopers such firm's independence. In order to assure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent registered public accounting firm.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC.

The Audit Committee also considered whether the provision of other non-audit services by PricewaterhouseCoopers to the Company is compatible with maintaining the independence of PricewaterhouseCoopers and concluded that the independence of PricewaterhouseCoopers is not compromised by the provision of such services.

Audit Committee
Stephen G. Butler (Chair)   John B. Veihmeyer
Kimberly A. Casiano   Lynn M. Vojvodich
Beth E. Mooney    

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Proposal 3. Approval of the Compensation of the Named Executives

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that we provide you with the opportunity to vote to approve, on a non-binding advisory basis, the compensation of our Named Executives, as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. At the 2017 Annual Meeting, our shareholders approved our proposal to provide you with this opportunity on an annual basis.

As described in detail in the "Compensation Discussion and Analysis," we seek to closely align the interests of our Named Executives with yours. Our compensation programs are designed to reward our Named Executives for the achievement of short-term and long-term strategic and operational goals, while at the same time avoiding unnecessary or excessive risk-taking. We urge you to read the Compensation Discussion and Analysis on pp. 39-61 and the other related executive compensation disclosures so that you have an

understanding of our executive compensation philosophy, policies, and practices.

The vote on this resolution is not intended to address any specific element of compensation; rather the vote relates to the compensation of our Named Executives, as described in this Proxy Statement. The vote is advisory, which means that the vote is not binding on the Company, our Board of Directors, or the Compensation Committee.

Ford management will present the following resolution to the meeting:

"RESOLVED, That the Company's shareholders approve, on an advisory basis, the compensation of the Named Executives, as disclosed in the Company's Proxy Statement for the 2020 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and disclosure."

Your Board's recommendation: FOR Proposal 3

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CD&A Roadmap

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*
See pages 60, 62, and 63 of Ford's 2019 Form 10-K for definitions and reconciliations to GAAP.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS (CD&A)

Executive Summary

Our Belief: Ford Motor Company was built on the belief that freedom of movement drives human progress.

Our Aspiration: To become the world's most trusted company.

Our Plan for Value Creation: The plan to reach our aspiration and create value involves engaging our passion for product and deep customer insight, focusing on fitness and tracking our success against key metrics.

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Customer-Centric Insight and Passion for Product:

Winning Portfolio — Strengthening our portfolio and focus on products and markets where we know we can win

Propulsion Choices — Fully committing to new propulsion systems, including adding hybrid-electrics to high-volume, profitable vehicles

Autonomous Technology — Building a viable and profitable autonomous vehicle business offering the most trusted and human-centered ride hailing and goods delivery experience for our customers

Connected Services — Creating and scaling the mobility platform and services our customers and partners will embrace

Fitness:

Improved operating leverage

Adaptive business model — be it build, partner, or buy — to generate highest returns

Capital efficiency

Strong balance sheet

Metrics:

Free Cash Flow

Grow revenue

Increase Earnings Before Interest and Taxes (EBIT) and EBIT Margin

Higher Return on Invested Capital (ROIC)

Our People: The foundation for delivering on our plan is and will always be our people.

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2019 — IMPLEMENTING OUR PLAN

In last year's CD&A, we told you that 2018 was about laying the foundation to redesign our business. In 2019 we focused on implementing our plan by making strategic investments, broadening partnerships, and becoming a more fit organization. Over the past year, we took important steps in the global redesign of our business. However, our 2019 operational performance was disappointing, mostly due to our operational execution. We recognize and take accountability for our performance and this is reflected in our incentive plan payouts.

In 2019 we measured our performance by Company Revenue, Company Adjusted EBIT Margin, Company Adjusted Free Cash Flow, Adjusted Return On Invested Capital, and comparing our Total Shareholder Returns ("TSR") with that of our peer group. We also took significant steps toward our future of becoming the world's most trusted company, designing smart vehicles for a smart world. The graphic below shows our operational performance over the past several years and we have made changes in our processes and organization to address operational concerns.

GRAPHIC

      *
      See pages 60 and 62 of Ford's 2019 Form 10-K for definitions and reconciliations to GAAP.

Our 2019 Company Revenue was lower than 2018 primarily due to lower volumes in all regions. This also adversely affected our other key metrics. We earned $47 million on a net income basis while Company adjusted EBIT was $6.4 billion. Company Adjusted EBIT Margin of 4.1% was lower than 2018 and Company Adjusted Free Cash Flow was equal with the prior year at positive $2.8 billion. From a financial perspective, our 2019 results were short of expectations with most key metrics down from the prior year. The NEO Compensation section of the CD&A (pp. 49-59), reflects our performance against metrics over the 2019 performance period for the Incentive Bonus Plan and the 2017-2019 performance period for the 2017 Performance Unit grant. The actual outcomes across

these compensation elements reflect our commitment to tying compensation to Company performance.

IMPROVING OUR FITNESS TO FINANCE OUR GROWTH

The information in this Performance Section shows we continue to deliver positive results over a sustained time period. In order to create greater value for our stakeholders, it is important that we attack costs as well as redesign our business operations to take advantage of future growth opportunities. The following graphics show some of our 2019 achievements in these areas and the strategic choices we are making to drive future growth.

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ACHIEVEMENTS   STRATEGIC CHOICES
GRAPHIC   Ford was America's best-selling vehicle brand for the tenth consecutive year   GRAPHIC   Announced an agreement with Mahindra to co-develop a midsize sport SUV for India and emerging markets

GRAPHIC

 

41st year Ford has been America's best-selling commercial van maker

 

GRAPHIC

 

Announced a joint venture with Mahindra that will develop, market, and distribute Ford brand vehicles in India and Ford brand and Mahindra brand vehicles in high-growth emerging markets

GRAPHIC

 

Lincoln SUVs had their best annual sales results since 2003

 

GRAPHIC

 

Invested in Rivian to form a strategic partnership to develop an all-new, next-generation battery electric vehicle

GRAPHIC

 

Full-year F-Series sales totaled 896,526, marking its 43rd year as America's best-selling pickup and the 38th straight year as America's best-selling vehicle

 

GRAPHIC

 

Ford and Autonomic, the creators of the Transportation Mobility Cloud, signed a global agreement with Amazon Web Services, which will expand the availability of cloud connectivity services and connected car application development services for the transportation industry

GRAPHIC

 

We concluded a new collective bargaining agreement with the United Auto Workers that increases our manufacturing competitiveness and protects jobs

 

GRAPHIC

 

Announced expansion of our alliance with Volkswagen to include investment in Argo AI, an autonomous vehicle development entity, and cooperation in the development of electric vehicles

We will pursue these and other opportunities as we strive to deliver superior shareholder returns through focused automotive, electrification, and high-growth mobility initiatives.

FORD TOTAL SHAREHOLDER RETURN ("TSR") PERFORMANCE

As Ford strives to deliver superior shareholder returns, we realize that our TSR has lagged that of our peer group and the S&P 500 over the most recently completed one-, three-, and five-year periods. Our efforts to become more fit and to strengthen those areas of our business where we are winning — primarily through the Creating Tomorrow Together strategy (see p. 39) — is expected to provide the profits necessary to invest in the future of winning propulsion choices, autonomous technologies, and mobility experiences. We will continue to implement this strategy with a passion for product and keen focus on customer insights that will differentiate us from our competition and position us to deliver value for all our stakeholders.

Our operating performance affects our TSR and we tie both to our incentive plan payouts. Our Performance Unit grants include financial metrics and relative TSR as factors. Thus, payouts under the 2017 Performance Unit grant, which occurred in March 2020, reflect actual relative TSR performance against our peer group as constituted in 2017. This links our executives' performance to shareholder interests, which is a key tenet of our

pay-for-performance philosophy (see 2017 Performance Unit Results on p. 57-58 for a discussion of the 2017 Performance Unit payout).

As the graphic on p. 40 shows, our operating results remained positive in 2019. Shareholders have benefited from our results. Since reinstituting dividends in 2012, we have returned $21.0 billion to shareholders through year-end 2019 through dividends and share buybacks. We maintained our regular quarterly dividend of $0.15 per share throughout 2019 and in the first quarter of 2020; however, due to the COVID-19 pandemic, we suspended the dividend for the second quarter 2020 and will reassess the dividend payment in future quarters.

Since 2017, we have redesigned our business in the face of sweeping technological changes and disruption in the auto industry while seeking to make our business more fit. In February 2020, James D. Farley, Jr. was elected Chief Operating Officer to more fully integrate our automotive business and accelerate its transformation into a higher growth, higher margin business by leveraging smart, connected vehicles and services.*

   

*
Please refer to Appendix I for a Cautionary Note on Forward-Looking Statements.

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COMPENSATION PHILOSOPHY AND STRATEGY

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Our Global Compensation and Benefits Philosophy, Strategy, and Guiding Principles are the pillars that provide the foundation upon which compensation and benefits programs are developed at Ford. The Guiding Principles ensure our Philosophy and Strategy statements are applied consistently across the business for our salaried employees. Driving total shareholder return is inherent in each pillar. They work together — no one principle is more important than any other, and business judgment is used to balance them to ensure our compensation and benefit programs are effective in supporting our strategy.

The Compensation Committee of the Board of Directors regularly reviews the Global Philosophy, Strategy, and Guiding Principles and, in connection with its review of our gender pay equity practices, determined to include a statement on gender pay equity. In addition, the Committee updated the language to reflect our overall strategic direction. These changes reinforce that pay equity is an important objective that will attract top talent to Ford and reinforces that compensation practices are tied to our strategy.

Global Compensation and Benefits Philosophy: Ford Motor Company was built on the belief that freedom of movement drives human progress. It is a belief that has always fueled our passion to create great cars and trucks. And today, it drives our commitment to become the world's most trusted company, designing smart vehicles for a smart world that help people move more safely, confidently and freely. We cannot compete for the future we envision unless we are fit in all aspects of our business.

Attracting, retaining, and developing amazing talent that is empowered to work together to compete and win is a fundamental aspect of our fitness. A core principle of our talent management strategy is a longstanding commitment to equal opportunity in all aspects of employment, including the way Ford compensates its employees.

Compensation and benefits programs are an important part of the Company's employment relationship, which also includes challenging and rewarding work, growth and career development opportunities, and being part of a leading company with a diverse workforce and great products. Ford strives to have these features as part of its compensation and benefits:

    A consistent framework that is affordable to the business.

    A pay for performance focus — individuals are rewarded for performance and contributions to business success.

    Compensation is fair and equitable, irrespective of gender, race, or similar personal characteristics.

    A total package that will be competitive with leading companies.

Global Compensation and Benefits Strategy: Compensation will be used to attract, retain, and motivate employees and to reward the achievement of business results through the delivery of competitive pay and incentive programs. Benefits provide employees with income security and protection from catastrophic loss. The Company will develop affordable, competitive benefit programs that meet these objectives.

GUIDING PRINCIPLES

Pay Equity. Ford employee compensation in each market should be fair and equitable, irrespective of gender, race, or similar personal characteristics. This applies to all forms of pay, including base salary, incentives, bonuses, and other forms of compensation.

Performance Orientation. Compensation programs should support and reinforce a pay-for-performance culture. They should motivate and reward employees for achieving desired business results. Benefit programs should provide income security and support/protect for catastrophic loss.

Competitive Positioning. Competitive compensation and benefit programs are critical to attracting, motivating, and retaining a high performing workforce. We target the average competitive level of automotive and other leading companies within the national market,

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    including large automotive, leading multinational, and other selected companies, as appropriate. Competitiveness will be measured based on program value to employees relative to the comparator group. When business conditions are such that our incentive programs do not provide competitive compensation on a longer-term basis, we will use short-and long-term retention programs to ensure the Company retains key employees who enable the Company to respond successfully to financial and operational challenges.

Affordability. Compensation and benefits must be affordable to the Company over the medium- to long-term. To the extent possible, compensation and benefit programs will not fluctuate significantly based on short-term business conditions.

Desired Behaviors. Compensation and benefit programs should support the Company's business performance objectives and promote desired behaviors.

Flexibility. Compensation, benefit, and other related programs should take into account workforce diversity and provide meaningful individual choice where appropriate.

Consistency and Stability. It is a Company objective to provide consistent and stable programs globally (subject to legal, competitive, and cultural constraints), particularly for higher level positions. Compensation and benefit programs should have a high degree of consistency within countries (i.e., among various pay levels and employee groups) and should not fluctuate significantly year-over-year. Programs may vary when competitively driven.

Delivery Efficiency. Compensation, benefit, and other related programs should be understandable and easy to administer while leveraging economies of scale and technology. They should be implemented in a consistent, equitable, and efficient manner. Programs will be delivered in a manner that is tax-effective to the Company and employees as far as practicable.

Delivery Effectiveness. Clearly defined metrics should be developed for compensation, benefit, and other related programs that are aligned with corporate business performance metrics. Metrics are designed and utilized to measure and continually improve business results.

In keeping with the above, our total direct compensation for Named Executives, consisting of base salary, annual cash incentive, and long-term equity incentive, is heavily weighted towards performance.

Base salary represents less than 20% of each Named Executive's target opportunity, and a majority of our executives' target compensation is contingent on meeting incentive plan metrics, with the exception of Mr. Stone, whose employment agreement is discussed on p. 49.

PERFORMANCE-BASED INCENTIVE PLANS

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MANAGEMENT RECOMMENDATIONS

The Committee considered recommendations from the Executive Chairman, the President and CEO, and the Chief Human Resources Officer, in developing compensation plans and evaluating performance of executive officers. The Committee's independent consultant also provides advice and analyses on the structure and level of executive compensation (see Compensation Committee Operations on pp. 16-17). Our senior leadership team established our corporate priorities and developed the 2019 business plan metrics, which were approved at the December 2018 Board meeting. Our Human Resources and Finance departments developed the incentive plan performance weightings, targets, and payout ranges in support of the business plan and in December 2018 presented the recommendations to the Committee. Final decisions on the design of our incentive plans and all major elements of compensation, however, as well as total compensation for each executive officer, were made by the Compensation Committee at the February and March 2019 meetings.

We tie our executive compensation to performance against defined metrics aligned with our strategic objectives. The metrics used in our Incentive Bonus Plan and Performance Unit grants have undergone changes over the years to support our business strategies. As we continue to address core business performance in response to the evolving business environment, and invest in a future that is increasingly driven by automation, electrification and mobility services, the Committee has continually reviewed the metrics used in our performance-based plans and adopted metrics consistent with our strategies on balance sheet strength and shareholder distributions (cash flow), efficiency (margin), growth (revenue), effectiveness of capital allocation (return on invested capital), and quality.

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With those priorities in mind, the Committee adopted metrics and weightings shown in the following table for the 2019 Incentive Bonus Plan and Performance Unit grants.

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*
During 2019, we decided to refer to the "Company Adjusted Operating Cash Flow" Incentive Bonus metric, which was the term used when the Committee approved the metric, as "Company Adjusted Free Cash Flow." The definition of both terms is the same. We will refer to the metric as Company Adjusted Free Cash Flow througout the CD&A.

Please refer to 2019 Incentive Bonus Plan Results on pp. 53-54 for details on our performance against metrics and payouts under our Incentive Bonus Plan for 2019. Also, refer to 2017 Performance Unit Results on pp. 57-58 for details on our performance against metrics and payouts for the 2017-2019 performance period.

COMPETITIVE SURVEY

Two competitive surveys are referred to in the CD&A — a December 2018 Survey that was used to inform 2019 compensation decisions and a December 2019 Survey used to compare the competitiveness of the Named Executives' compensation throughout the CD&A. The reports were prepared by the Company and reviewed by the Committee's independent consultant and were based on information obtained from the Willis Towers Watson Executive Compensation Database.

December 2018 Survey — Input for Setting 2019 NEO Comp.    In December 2018, the Committee reviewed a report analyzing Ford's compensation programs for executives compared to our peer group companies.

The Committee used the December 2018 Survey as an input for setting 2019 executive compensation. The report discussed how our executive compensation program compared with those of peer companies on base salary, annual bonus, long-term incentives, and total direct compensation. The survey group compensation data was collected during the second quarter of 2018 and, therefore, reflected any bonuses paid in early 2018 for 2017 performance, as well as equity grants made in early 2018.

The Committee uses the following criteria to determine the companies included in the survey group:

    member of the Fortune 100;

    similar primary business to Ford and/or similar business model (e.g., engineering, manufacturing, sales, financial services, and numerous job matches);

    particular line of business comprises no more than 20% of the total peer group; and

    participates in the Willis Towers Watson survey process.

The above criteria ensure that the chosen executive compensation survey group will be representative of Ford's market for talent. The Committee reviews the criteria and survey group annually, and for the December 2018 Survey added Verizon and deleted Arconic from the peer group. Arconic no longer met our criteria as a large company once it spun-off Alcoa. Verizon met the criteria to be included in the peer group. Changes to the survey group are typically minimized in order to support year-over-year data stability and reliability. Our non-U.S. based automotive competitors do not participate in the Willis Towers Watson survey process. The survey group shown below was the survey group used in the December 2018 Survey that informed 2019 compensation decisions:

3M   General Electric
AT&T   General Motors
Boeing   Honeywell
Caterpillar   IBM
Chevron   Intel
Cisco Systems   Johnson & Johnson
Coca-Cola   Microsoft
ConocoPhillips   PepsiCo
DowDuPont   Pfizer
ExxonMobil   United Technologies
Fiat Chrysler   Valero
General Dynamics   Verizon

While the Committee used the December 2018 Survey data as a reference point, it was not the sole

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determining factor in executive compensation decisions in 2019. We generally seek to target total compensation opportunities at or around the survey group's median total compensation. Consistent with our compensation Guiding Principles, we incorporate flexibility into our compensation programs to respond to, and adjust for, changes in the business/economic environm