Behind every company is a CEO, and while the CEO doesn’t have total control over the company, they are still responsible for its direction. That’s why the most important CEOs, like the CEO of Ford, Jim Hackett, get paid so well. Here’s a look into how much money he makes.
Who is Jim Hackett?
Hackett joined Ford as its CEO with a mission statement to change the company up a bit in how the automaker designs its cars. This is what Hackett called “design thinking,” and it’s the process in which the car designers try to design the car based on how they think a customer will see and use the car.
The basic idea behind “design thinking” is to simply create cars that customers want, all the meanwhile avoiding any issues that Ford’s designers may miss. Obviously, the end result of “design thinking” is that by creating cars that people want, more people will buy Ford cars. The company’s revenue and profits will go up, and everybody’s happy.
Did “design thinking” for Ford work?
As Auto News reported, Jim Hackett joined Ford in the middle of 2017, and 2018 was his first full year at the company. As a result, it’s still too soon to say whether or not “design thinking” has paid off. It’s also very hard to say if it has had any effect on Ford, as the automaker has also made a lot of other changes and improvements to its cars that probably weren’t part of that “design thinking” philosophy.
For example, when Ford unveiled the new Mustang Mach-E, which is an electric crossover SUV with Mustang branding, some fans got really angry. Other fans absolutely loved the Mustang Mach-E, but “design thinking” shouldn’t lead to such a polarizing reaction. That said, the Mustang Mach-E is not on sale yet, so it’s unknown whether or not fans will ultimately fully embrace it.
Asides from cases like the Mustang Mach-E where Ford may not have hit the bullseye with its “design thinking” philosophy, the numbers don’t lie. As Auto News said, even Hackett admits that “2018 was mediocre by any standard.” For example, despite the fact that Ford had $7 billion in profit in 2018, Ford’s profit margin actually decreased from 6.1% in 2017 to 4.4% in 2018.
In America, Ford brought in $7.6 billion in revenue, but that’s actually 6% less than what the automaker made in 2017. Everywhere else in the world, Auto News says that Ford simply lost money. In fact, in 2018, Ford lost $2.2 billion in total from every country that wasn’t the U.S. Ford’s performance in 2018 was so unimpressive that Hackett told investors to “bury the year in a deep grave.”
How much Jim Hackett gets paid
Despite how Ford performed in 2018, Hackett still made a lot of money for his efforts. Auto News says that he got a base salary of $1.8 million, $2.6 million in bonuses, and $12.7 million in stock rewards. That adds up to total compensation of about $17.75 million for 2018.
In fact, despite the company making less money in 2018 than it did in 2017, Hackett himself actually made more money in 2018 than he did in 2017. In 2017, he made $16.7 million, which means that he made about a million dollars more in 2018 than he did in 2017.
For comparison, Auto News says that the average Ford worker made about $64,000 in 2018. Time will tell whether or not Hackett is worth the money that Ford is paying him, but if sales numbers don’t improve soon, then Hackett may soon be fired.