(Bloomberg) -- Ford Motor Co. is cutting the performance bonuses of its senior managers — including Chief Executive Officer Jim Farley — after the automaker said poor execution and supply snags led to disappointing results for the past year.
Executives will still receive bonuses, but the payouts will be reduced, according to an internal memo sent Friday to senior managers and viewed by Bloomberg. Instead of the 148% bonus executives qualified for under the company’s annual incentive compensation plan, based on targets like business performance and cash flow, they will receive 90% of their bonus.
The cuts apply to a few hundred senior-level managers at the company and don’t affect lower-ranking employees, including salaried workers, the memo said.
Read more: Ford tumbles after CEO blames high costs, hints at more job cuts
“The reality is we still have a lot of work to improve execution and strengthen our business, as demonstrated by our earnings results,” Ford said in the memo, which was signed by Farley and Chief Financial Officer John Lawler. “Our senior leaders have a significant impact on driving the business results and must live up to the high standards we need to create a vibrant, profitably growing Ford.”
The move adds to the fallout from the company’s worse-than-expected results on Thursday, which dragged down its shares and prompted Deutsche Bank AG to lower its recommendation on the stock. Lawler said Ford would step up its cost-cutting efforts considerably, including possible job cuts.
Ford’s shares fell 1% in extended trading Friday after a decline of 7.6% in regular trading, the biggest one-day fall since Sept. 20, when the company warned of inflationary costs.
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