What is the significance of the Ford Motor Company 2008 Long-Term Incentive Plan?

The plan is significant because it allows Ford to offer long-term incentives to its executives that are designed to be performance-based. This structure is intended to align executive interests with shareholder value creation and to provide tax advantages for the company by ensuring deductibility of compensation.

How does this plan relate to executive compensation limits?

The plan is designed to ensure that compensation paid under it qualifies as 'performance-based compensation' as defined by Section 162(m) of the Internal Revenue Code. This qualification is crucial for Ford to be able to deduct executive compensation expenses exceeding $1 million, which would otherwise be disallowed.

When was this plan approved?

The shareholders of Ford Motor Company approved the 2008 Long-Term Incentive Plan on May 8, 2008.

Where can I find more details about the plan's terms?

The full terms of the plan are incorporated by reference from Appendix II to the Company's Definitive Proxy Statement dated April 4, 2008, and from Proposal 4 within that same proxy statement.

FORD MOTOR CO 8-K: Leadership Changes

Summary

Ford Motor Company announced on May 8, 2008, that its shareholders approved the Ford Motor Company 2008 Long-Term Incentive Plan. This plan is designed to offer compensation to executives that, where applicable, will qualify as 'performance-based compensation.' This designation aims to ensure that compensation paid under the plan can be tax-deductible, even if it exceeds the $1 million limit imposed by Section 162(m) of the Internal Revenue Code for non-performance-based executive pay.

Key Highlights

1Shareholder approval of the Ford Motor Company 2008 Long-Term Incentive Plan.
2The plan is structured to align executive compensation with company performance.
3A key objective is to ensure compensation qualifies as 'performance-based compensation' for tax deductibility purposes.
4This aims to mitigate the impact of Section 162(m) of the Internal Revenue Code on executive pay.
5Compensation under this plan is intended to be tax-deductible, even for amounts exceeding $1 million, provided it meets performance criteria.

FORD MOTOR CO 8-K Report, Executive Changes (May 13, 2008)

Summary

Key Highlights

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