WILMINGTON, Del. -- Ford Motor Co. Executive Chairman Bill Ford defended the company's CEO, Mark Fields, against complaints at the shareholders meeting about the automaker’s sinking stock price, including a request to bring back former CEO Alan Mulally.
“Mark has a different style, but look at the results,” Ford said today at the meeting here, to an investor who requested that Mulally be brought back as an adviser to boost the stock price. “Alan did a terrific job and there’s no question about it. And yes, he was really good with all of our constituents, but so is Mark.”
For Ford Motor Co.'s annual shareholder proxy statement, click here.
The company has generated record profits since Fields replaced the retiring Mulally as CEO on July 1, 2014, yet investors traded down the shares 23 percent from then through Wednesday on concern that the U.S. auto market is peaking and fears over tech giants like Google elbowing into the car business.
Industrywide sales have risen 3.3 percent this year after a record 17.5 million cars and light trucks were sold in 2015. Ford’s market share climbed to 15.6 percent, from 15 percent, in this year’s first four months, helping the company book record net income of $2.5 billion in the first quarter.
“It’s not clear yet to the market where this whole mobility world is going and who the winners are going to be, who the losers are going to be,” Bill Ford said. “They see tech companies coming into this space and they wonder what our role is going to be. Our goal then, over this next year or so, is to clarify that as best we can.”
Shareholders expressed frustration at the declining share price during a time of prosperity, and some drew connections to Fields’s tenure at the top. The stock fell 9.1 percent last year and was down 5.5 percent this year through Wednesday. Ford shares today rose 0.23 percent to close at $13.35.
“Ford stock price and its direction is really unsatisfactory,” Roger Heymann, a shareholder from Rockville, Md., told the company’s directors. “No disrespect is meant, but it’s been decreasing Mr. Fields since you took over.”
Since Ford on April 28 posted pretax earnings of $3.8 billion, a record for any quarter, its shares slid 2.5 percent through Wednesday.
Heymann criticized Fields, 55, for his “growing outside activities” such as joining International Business Machines Corp.’s board and becoming chairman of the U.S.-China Business Council.
Ford defended Fields, saying he has had “the best first year I think any CEO has ever had in their first year at Ford Motor Co.”
Another shareholder compared Ford’s lagging stock price to the Detroit Lions winless season in 2008, which ended with the firing of the football team’s head coach and most of his staff. Bill Ford’s family owns the Lions.
“The people involved in that team were probably good people,” said Frank Giamboy, a shareholder from Wilmington. “But they did not get the job done, so therefore changes needed to be made. As chairman of the board, there’s clearly a disconnect in the price of the Ford stock compared to the results that we’ve heard this morning. It’s your job as chairman, Mr. Ford, to identify that disconnect and correct it.”
Ford responded that “we can’t drive the stock price” and said he is also frustrated “as someone who owns a lot of stock myself. I mean, I watch it every day.”
He credited Fields with leading a company that’s making money, paying dividends and has a good plan for the changes coming from driverless cars and the sharing economy.
“If you want to go down a checklist of all the things that should be driving the share price, we’re doing all those things and doing them at record levels,” Ford said. “If we continue to do these things and we can articulate a path to the future that is compelling, I believe that will be reflected in the stock price.”
Ford tried to address negative investor sentiment in March when CFO Bob Shanks told analysts the automaker could withstand a 30 percent drop in U.S. auto sales and remain profitable.
At the company’s meeting today, shareholders rejected a proposal to strip the founding family of its 40 percent voting control and move to one vote per share. The vote was 63.1 percent against and 36.9 percent in favor. That’s the most support such a proposal has ever received, up from 36.3 percent last year.
The family controls the automaker through Class B shares that only its members can own. Henry Ford’s great-grandsons, Bill Ford and his cousin Edsel Ford II, are members of the board.
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