Environmental, Social and Governance Review
November 2021 Ford Integrated Sustainability and Financial Report 2021
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Contents
Introduction 3
Environmental 15
Social 20
Governance 27
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To help build a better world,
where every person is free to move and pursue their dreams.
Our Company
Purpose
Ford +
Distinctive products and solutions + Always-on relationship with customers + Ever-improving user experiences.
+ Turn around automotive operations, compete like a challenger + Treat customers like family
+ Create must-have products and services + Simplify everything
+ Modernize everywhere + Care for each other
+ Capitalize on our strengths + Disrupt ourselves
+ Partner for expertise and efficiency
+ Lead the electrification revolution in areas of strength
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Our strategy to drive growth, improve execution, deliver customer satisfaction, and speed up our transformation.
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Disruptive Technology Allows Us to Leverage Foundational Strengths to Build New Capabilities – Enriching Customer Experiences and Deepening Loyalty
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Ford+ Investment Thesis
Disruptive Technology Allows Us to Leverage Foundational Strengths to Build New Capabilities – Enriching Customer Experiences and Deepening Loyalty.
Iconic Nameplates
Leading Market Positions
Ford Credit
Connected Services
Autonomous / Mobility
Electric
Commercial Vehicles and Services Integrated Hardware
and Software
Connectivity
Data Analytics
+ =
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CUSTOMER EXPERIENCE
FOUNDATIONAL STRENGTHS
Drives Strong Margins and Cash Flow
ENHANCED CAPABILITIES
Enables Deep Customer Insight
EXPANDED TAM
& VALUE CREATION
Unlocks New Growth Opportunities
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At Ford, the value of our business is rooted in our purpose. That means creating a future that’s inclusive, equitable, and sustainable, setting the pathway for a continued strong business for decades to come.
We’re committed to taking bold action to address climate change and achieve carbon neutrality no later than 2050 by:
Building a Better World for Generations to Come
Electrifying Our Icons including Mustang, F-150, Transit and Lincoln; we expect fully electric vehicles to account for 40% of our global sales volume by 2030
Investing in EV Technology & Charging Infrastructure to remove obstacles to electrification Investing in Clean Manufacturing to create the future of industry
Support Communities to expand mobility and access to essential services and opportunities
continued
Ford is the only full-line American Auto doing our part to reduce CO2 emissions in line with the Paris Climate Agreement and working with California for stronger vehicle greenhouse gas standards.
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Our Sustainability Aspirations
Our ambition is to lead the electrification revolution, increasing our investment in battery electric vehicles (BEVs) to more than $30 billion through 2025.
Starting with iconic, high-quality, high-performance vehicles:
Assuring access to higher-volume, lower- cost, high-performing battery technology:
Mustang Mach-E: We electrified the world’s best-selling sports car and it’s a hit with customers around the world. Over 90% of Mach-E owners said they would recommend it to others. It was named Best Car to Buy in 2021 by The Car Connection and Green Car Reports.
F-150 Lightning: All-electric version of the world’s most popular vehicle for nearly 40 years. The smartest, most innovative F-150 ever, offering an array of connected features that improve over time via wireless software updates. Available in Spring 2022.
E-Transit: The world’s #1 cargo van will be the first all-electric competitively priced cargo van in North America from a full-line automaker. Part of a connected, electric solution for commercial customers. Available in early 2022 in the U.S.
Success of BEVs is tied to battery energy density and cost. We have accelerated investment in battery R&D.
We have established Ford Ion Park, our battery center of excellence, to advance battery cell technology, and develop the future of high-volume battery manufacturing.
We are absolutely committed to designing, engineering, and manufacturing our own batteries. Vertical integration means controlling our own destiny.
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Ushering in a new era of clean, carbon-neutral manufacturing, and
building a better future for America and the planet.
In September, Ford and SK Innovation announced a planned combined $11.4 billion investment to build breakthrough BEVs and the batteries that power them in a new mega campus in Tennessee called ‘Blue Oval City’, and twin battery plants in Kentucky, ‘BlueOvalSK Batter Park’, bringing 11,000
good paying jobs to America.Ford’s $7 billion portion –
the biggest investment ever for the company – brings our investment inBEVs to more than $30 billion through 2025 and supports our long-term goal to create a clean manufacturing ecosystem. It also accelerates our progress towards achieving carbon neutrality.
Expected to be operational by 2025, these new facilities will produce enough battery capacity to power
1 million BEVs per year – which is twice thebattery capacity for the whole of the U.S. today.
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We are developing a closed loop manufacturing ecosystem.
By bringing design, engineering, and manufacturing
together, we can reduce transportation, emissions and even packaging. Our focus on battery recycling will re-use
valuable materials, recover precious metals, and help make electric vehicles more affordable.
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Sustainable Financing Framework
Use of Proceeds
• Will support Ford’s investments in four key areas: clean transportation, clean manufacturing, making lives better and community revitalization
• A significant portion of the net proceeds of any Sustainable Financing is expected to be allocated to Clean Transportation We are putting our money where our mouth is by prioritizing capital to green and social projects through a new Sustainable Financing Framework, a first for a North American automaker, and issuance of our inaugural Green Bond in November. We also tied our Corporate and Supplemental Revolvers to sustainability-linked KPIs.
Project Evaluation and Selection
• A Sustainable Finance Committee will oversee the project evaluation and selection process
• Intend to fully allocate the net proceeds of each Sustainable Financing within 24 months of its issuance
• Lookback period of 24 months
Reporting
• Annually, until full allocation of the net proceeds in the case of Ford, or until maturity in the case of Ford Credit
• Allocation reporting and expected impact metrics, where feasible Management of Proceeds
• Eligible Projects or Eligible Receivables will be tracked internally in a register for each Sustainable Financing
• Separate portfolios will be tracked for Ford and Ford Credit Highlights of the Framework
• Achieved highest-possible ‘Advanced’ rating from Vigeo Eiris, which is globally recognized for ESG initiatives
• Transactions may include a variety of both unsecured and securitization funding arrangements
Visit our Sustainable Financing Webpage
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Ford’s ESG Progress
ESG Priorities Are In Focus More Than Ever Before
E S G
CARBON NEUTRALITY COMMITMENT
by 2050 for vehicles, facilities and suppliers, with science-based targets
SUSTAINABLE FINANCE
Launched Sustainable Financing Framework, tied our Revolvers to sustainability-linked KPIs and issued an inaugural Green Bond for clean transportation projects
SUSTAINABLE MATERIALS
Target to use 20% recycled or renewable plastics by 2025 in new vehicle designs for North America and Europe
TCFD
Formally committed to the Task Force on Climate-related Financial Disclosures (TCFD)
ENERGY
Disclosed renewable electricity sources and targets
SAFETY
Completed 2nd saliency assessment; signed UN’s Pledge for Elimination of Child Labor
HUMAN RIGHTS
Introduction of aspirational goal for vehicle and manufacturing safety
POLICY
Expanded the Board’s Sustainability, Innovation and Policy Committee to include the Company’s pursuit of innovative policies and technologies
RESPONSIBLE SOURCING
Implementation of responsible sourcing and raw material strategy
DIVERSITY
INTEGRATED REPORTING
Released first integrated report
POLITICAL ACTIVITY REPORT
Increased transparency of lobbying disclosures
DATA MANAGEMENT
Data privacy and security publicly disclosed policy
Human Capital 10K disclosures, published EEO-I report and signed the UN’s Women Empowerment principles
Published a supplier code of conduct
SUPPLY CHAIN
BOARD OF DIRECTORS
Dedicated Sustainability, Innovation and Policy Committee reviews and advises on ESG matters regularly
UN GLOBAL COMPACT’S CFO TASKFORCE
A multisector group of corporate finance leaders established to mobilize toward sustainable development
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ESG Key Metric Trends
Quality: J.D. Power Initial Quality Study Results*
Diversity: Female Corporate Officers (Percent) Social: Global Lost-Time Case Rate
(per 100 employees)
Supply Chain: Total Supplier Sites Trained in Sustainability Management Waste: Waste-to-landfill per
Vehicle (Kilograms) Climate: Total Worldwide Facility CO2
Emissions (Million Metric Tons) 3.77
3.48
2.96
2018 2019 2020
3.3
4.3
3.6
2018 2019 2020
81 83
175
2018 2019 2020
0.41 0.39
0.31
2018 2019 2020
19%
15% 16%
2018 2019 2020
3696 3792 3816
2018 2019 2020
*External source: https://www.jdpower.com/cars/ratings
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Integrated Sustainability & Financial Report
• Ford’s first-ever integrated sustainability and financial report was published in March 2021.
• By bringing together our online financial and sustainability annual reports, we are creating a more complete picture of our progress for investors and shareholders.
• Includes new science-based targets toward our ambition to be carbon neutral by 2050.
• SBTi endorses two new Ford interim carbon- neutrality targets for substantial reductions in greenhouse gas emissions from operations and products by 2035.
• Social contributions in 2020 included making millions of pieces of personal protective and
medical equipment amid Covid-19 pandemic, and sharpening focus on diversity, equity, and inclusion.
Ford Integrated Sustainability and Financial Report 2021
Environmental
We’re committed to carbon neutrality – it’s the right thing for our customers, the planet and Ford. Ninety-five percent of our carbon emissions today come from our vehicles, operations, and suppliers, and we’re tackling all three areas with urgency and optimism.
“
Bob Holycross”
VP, Chief Sustainability, Environment & Safety Officer
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Combatting Climate Change Is A Strategic Priority For Ford
Climate Change Strategy
Climate change is a global challenge that affects us all. That’s why we’ve set for
ourselves a long-term aspiration to achieve carbon neutrality by 2050 for our vehicles, facilities and suppliers. We have two new science-based targets approved by SBTi to help us achieve this aspiration:
Reduce Scope 1 and 2 greenhouse gas (GHG) emissions from our operations by 76%
by 2035 from a 2017 baseline
Reduce Scope 3 GHG emissions from the use of sold products by 50% per vehicle by 2035 from a 2019 baseline
Ford is proud to be the only full-line American Automaker doing our part to reduce CO2 emissions in line with the Paris Climate Agreement and working with California for
stronger vehicle greenhouse gas standards.
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We Are Moving Towards A Closed-Loop Manufacturing System
Sustainable Materials
We aspire to use only recycled or renewable content in vehicle plastics. Our near-term target is to use
20% recycled or renewable plastics by 2025 in new vehicle designs for North America and Europe.
Plant-based renewable materials have already been used in over 20 million Ford vehicles, reducing cost and CO2 versus petroleum-based material. By using renewable and recycled materials, we’re keeping waste out of landfills, using fewer natural resources and energy, and reducing carbon
emissions while improving quality and performance.
To help our suppliers source materials ethically and responsibly, we use enhanced requirements in
contracts, reporting requests and transparent dialogue. We are mapping out our battery supply chain
to gain greater transparency about the sources of the cobalt, nickel, and lithium that we use for our
BEVs. And we are working with Redwood Materials to localize the complex supply chain network and
create pathways for end-of-life BEV vehicles, ramping lithium-ion recycling and increasing U.S. battery
production. Watch our closed loop explainer video here.
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We Aspire To Be Carbon Neutral By 2050
Sustainable Operations
Energy and Emissions Water Use Waste Reduction
We retained our place on the CDP
‘A List’ for water security in 2020 and received A’s for water
reduction for a sixth consecutive year.
Our global manufacturing water strategy is targeting a 15%
reduction in absolute freshwater use by 2025, building on our 75%
reduction since 2000, and our aspiration to use freshwater only for human consumption.
Achieved a 40% reduction in our carbon footprint from our
operations since 2011.
Ford retained our place on CDP’s Climate “A List” for the second straight year.
In 2020, in the midst of global vehicle production disruptions, we reduced our absolute
emissions by 15.1%, or 0.53 million metric tons.
Achieved true zero waste-to- landfill status at 103 company locations.
Recycling and reuse practices support circular economy and supply valuable resources with the goal of eliminating single use plastic from operations by 2030.
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We Are Transforming For Sustained Growth
Innovating Future Motion
Mobility & Connectivity We are creating a safer, more efficient and sustainable
transportation network with a wide range of mobility options to create a world with fewer limits.
In 2020, we began equipping our U.S. vehicles with advanced, wireless update capabilities, enabling quick and easy upgrades to enhance quality, capability, and the ownership experience.
Electrification Strategy Self-Driving Vehicles
Investing more than $7 billion through 2025 to develop self- driving vehicles in collaboration with Argo AI and Volkswagen We are currently testing our 4th generation self-driving vehicles in six U.S. cities.
We recently announced new partnerships with Walmart to test delivery of groceries and Lyft to offer rides in self-driving cars.
As part of our vision to lead the electric revolution, we are
investing more than $30 billion in battery electric vehicles through 2025.
Electrifying our most iconic nameplates and offering EV customers North America’s largest public charging network with more than 63,000 charge plugs.
Social
We believe that, to provide the best customer experience and play to win, we must first focus on our people
experience and cultivate a culture where employees feel valued and respected, and that they truly belong.
“
Kiersten Robinson”
Chief People and Employee Experiences Officer
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We Aspire To Create A Diverse Culture Where Everyone Feels Like They Belong
Creating a Winning Culture
As a family company, we care for each other and go further to create a culture of
belonging where everyone has the sense that they are appreciated, respected, and can bring their true selves to work.
Our diversity, equity and inclusion (DEI) North Star is “We are family. We celebrate our differences. We all belong.”
Our commitment to creating the right culture is viewed as a strategic imperative to the
company’s future success. To that end, every corporate officer has a DEI objective to
actively cultivate a culture of belonging by focusing on specific actions and behaviors
leading to enhanced DEI.
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We Are Empowering Our People To Create A Better World
Respecting Human Rights
Vehicle Safety and Quality Human Health and Safety Human Rights Partnerships In 2020, Ford topped the
Corporate Human Rights
Benchmarking (CHRB) industry ranking.
Throughout the pandemic, Ford has prioritized the health and safety of its employees, including voluntary on-site vaccinations, daily health surveys, temperature screenings, and providing our workforce and dealers with 55 million medical-grade face masks.
Committed to creating vehicles with high levels of safety that meet or exceed applicable laws and regulations.
For the 2020 model year, seven Ford and six Lincoln nameplates rated with 5-Star Overall Vehicle Scores in the U.S. New Car Assessment Program (NCAP), while nine of our models
currently hold 5-star ratings by Euro NCAP.
Signatory of the UN Global
Compact to align operations with ten universally accepted human rights principles and their Action Pledge for the Elimination of Child Labour.
First auto to conduct a Human Rights saliency assessment and to join the Responsible Business Alliance to improve social,
environmental, and ethical conditions in supply chains.
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Committed To Sourcing Materials In A Safe And Responsible Way
Responsible Sourcing of Raw Materials
Supply Chain Conflict Minerals Battery Raw Materials
Partnering with suppliers to ensure tin, tungsten, tantalum, and gold (3TG) are sourced responsibly using due diligence frameworks by the OECD.
Ford’s SEC conflict minerals disclosure was highest-ranked of any automaker in the “Mining the Disclosures 2019” report.
Began partnership with Copper Mark furthering our commitment to responsible sourcing.
Committed to the procurement of materials that do not contribute to human rights abuses, including child and forced labor, bribery and corruption, or environmental
concerns.
We aspire to source only raw materials that are responsibly produced and monitor our supply chains to ensure our materials are safe, responsibly sourced, and conflict-free.
In 2021, we are mapping our
battery supply chain to gain greater transparency about the sources of the cobalt, nickel, and lithium used in our BEVs. We are also
conducting responsible sourcing audits for each player in these relevant mineral supply chains.
In 2020, our first year of the formal program, we expanded our scope for cobalt due diligence and
received an 83% response rate.
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Our People-First Approach Is Vital To Attract And Retain Top Talent
Empowering Our People
Employee Engagement and Satisfaction
Diversity, Equity, and Inclusion
Investing in the Next Generation Included in the Bloomberg
Gender-Equality Index for 2 years in a row for our commitment to transparent gender reporting and workplace equality.
First global automotive company to sign on to the UN Women’s Empowerment Principles in February 2020.
CEO Action Pledge for Diversity and Inclusion.
More than 120,000 global employees were transitioned to virtual workers during the
pandemic. In March 2021, Ford announced a shift to a hybrid work model for non-place-dependent global employees when people return to the office. This was based in part on a 2020 survey that revealed 95% of employees would prefer a mix of remote and in-office work when the pandemic ends.
After more than two decades of sponsorship, we became a strategic partner of FIRST
Robotics to encourage learning among students of all ages.
Worked with Primary Engineer in the UK, provided scholarships and grants through Ford Driving Dreams in the US, Latin America and Spain, and helped college students launch social enterprises through Ford College Community Challenge.
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Making A Positive Impact On The Communities Where We Live And Work
Building Sustainable Communities
Ford Fund Employee Volunteering Responding to Covid-19
Giving back is one of our key values but in-person
volunteering has been limited during the ongoing Covid-19 pandemic. However,
our donation match
program gave employees a way to safely support the relief
efforts of 47 community
organizations in 20 countries – contributing $1.13 million to worldwide relief efforts.
Ford Fund oversees and coordinates volunteering and philanthropic investments,
supporting initiatives across driver safety, education, and
strengthening communities.
In 2020, Ford and Ford Fund contributed $61 million in charitable funds, with
philanthropic efforts added to support nonprofits addressing the impacts of Covid on communities.
In 2020, Ford and our UAW partners produced 140 million face masks, 220 million face
shields, 1.6 million gowns, 50,000 ventilators, and 32,000
respirators in partnership with 3M.
In April 2021, we reached our goal of distributing 120 million American-made medical-grade masks for at-risk communities in all 50 states in the US.
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Cybersecurity and Data Privacy Leadership
Cybersecurity Data Privacy
Ford manages cyber risk with an industry-leading cybersecurity organization and capability.
To ensure synergies, this capability is truly end-to- end, encompassing enterprise, vehicle, and mobility.
The program is regularly assessed by industry experts such as Mandiant, Symantec, and PwC.
Ford cybersecurity supports the full Ford ecosystem through industry partnerships, regulatory compliance, and strategic investments.
View Ford’s U.S. data privacy policy here.
Information that customers provide helps us deliver great products, a personalized experience, and continued innovation.
We take our responsibilities concerning the privacy and security of customer data seriously.
Our companywide governance drives a holistic approach, which includes policies and directives focused on transparency, responsible data handling and use, and choice where appropriate.
Ford Cybersecurity Actively Protects Data, Operations, And Reputation
Governance
The Sustainability, Innovation and Policy Committee is an important element of Ford’s governance structure,
providing essential oversight of ESG issues and assessing how our innovations support our sustainability agenda.
“
William H. Helman”
Chair, Sustainability, Innovation and Policy Committee Committee
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Risk Management
• Ford has extensive and effective risk management processes relating to compliance, reporting, operating, and strategic risks
• Board and Senior Management are deeply engaged in risk management, which is shown through top-down and bottom-up communication and cross-functional participation across Business Units and functional Skill Teams
• Board and its committees have responsibility for oversight over specific areas of risk management
• Critical risks are routinely reviewed by the Board and its committees as appropriate
Audit Committee Sustainability, Innovation and Policy Committee Compensation, Talent and Culture Committee Finance Committee
Compliance Reviews Sarbanes-Oxley Compliance Internal Controls
Disclosure Committee
Business Units & Skill Teams Operations Flash
Special Attention Review
Product, Strategy and People Forums
Compliance & Reporting Operating & Strategic Ford Board
Oversight
Ford Management Day-to-Day
OVERSIGHT OF RISK MANAGEMENT
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Board And Senior Management Collaborate For Effective Risk Management
Enterprise Risk Management
• Top enterprise risks are identified and updated through an annual survey of Senior Management and the Board, with regular updates on risk status and mitigation plans provided to the Board and appropriate committees
• Assigned risk owners report on their status using a common Enterprise Risk framework, with alignment across the critical risks and validation of individual inputs supported by a central Enterprise Risk Management team
• Process is designed for Business Units and Skill Teams to utilize their own governance processes for local risk identification and management, with the ERM framework and local governance forums supporting escalation of risks to the enterprise level when appropriate
Senior Manage- ment Risks
Board of Directors
Risks
Top Critical Enterprise
Risks
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Governance in Practice
• Ensures our business manages risk and operates in a transparent and accountable way
• Enables us to monitor the changing global business environment to inform and adjust our strategies as needed
• Creates accountability for setting, tracking and reporting progress against our goals, objectives, revenue and sustainability targets
• Helps ensure we implement sustainability- related risk assessments, planning, strategy implementation, and performance reviews consistently across the organization
Governance Framework Enables Us To Monitor Our Business, Make Long-Term Decisions And Develop Strategic Inputs To The Board
Board Of Directors
Topics are requested by the Board or recommended
through various governance forums
Reviews Risks and Opportunities of Key Business Issues
Strategy Forum
Product Matters Meeting
Forum
Evaluates Product Program Approvals / Program Execution
People Forums Operations Flash /
Forecast, Controls, Risk Review Meeting
Evaluates Strategic Initiatives / Business
& Product Strategies
Evaluates Leadership Development / HR Policies
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Board Has A Long History Of Operating Under Sound Corporate Governance Practices
Sound Governance Practices
Board Independence Board Practices
• Majority independent Board
• Separate Chair of the Board and CEO with Lead Independent Director
• Independent (i) Audit, (ii) Compensation, Talent and Culture and (iii) Nominating and Governance committees
• Regular Board and committee self-evaluation process
• Committee charters reviewed annually
• Independent directors meet regularly without management and non-independent directors
Compensation Accountability
• Robust stock ownership goals for executives
• Compensation for NEOs focused on performance
• Mandatory deferral of compensation for directors to link Board and shareholder interests
• Clawback provision in our incentive grants
• Officers are prohibited from hedging their exposure to, and limited in pledging, Ford common stock
• Annual election of all directors
• Majority vote standard
• Shareholders have the right to call special meetings
• Shareholders may take action by written consent
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Commitment To Regular Refreshment To Evolve Our Board In Line With Our Strategy
Our Board’s Evaluation and Refreshment Process
• Robust Board assessment and succession planning process in place
• Regularly evaluate mix of Board skills and experience in the context of our strategy and evolving industry and business trends
• Focus on director candidates who
possess a multitude of skills, professional experience, and backgrounds aligned with our strategy
• Prioritization of diverse backgrounds and perspectives
• 15-year term limits for new independent directors and mandatory retirement age at 72 provide regular opportunities for Board refreshment
Our Process in Action Process Overview
• Possess the highest personal and professional ethical standards, integrity, and values. Read our Governance &
Policies here.
• Commitment to represent the
long-term interests of all shareholders
• Practical wisdom and mature judgment
• Objective and inquisitive
• Advance goal of greater Board diversity
• Willing and able to devote sufficient time to carrying out their duties and responsibilities effectively
• Free from conflicts of interest
Key Selection Criteria
• Ford has recently experienced Board refreshment
• Edsel B. Ford II, who was first elected to the Board in 1988, retired from the Board in May 2021
• John C. Lechleiter, who was first elected to the Board in 2013, opted not to stand for reelection in May 2021 due to personal reasons
• Alexandra Ford English and Henry Ford III were elected to the Board by shareholders in May 2021
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Directors Bring Diverse Experience And Qualifications To Deliver Accountability, Strong Risk Oversight, And Strategic Direction
Directors
Kimberly (Kim) Casiano
Director since 2003
President, Kimberly Casiano & Associates President & COO, Casiano Communications
• Expertise in marketing and sales, particularly in the U.S.
Hispanic community and Latin America, as well as providing diversity advisory services
• Provides valuable insight to Ford’s “where to play and how to win” analyses, enterprise risk management systems, and ESG strategy
I A N S
L Lead Independent I Independent A Audit Compensation, F Finance N Nominating & Governance S Sustainability, Innovation & Policy Talent & Culture
C
Anthony (Tony) Earley, Jr.
Director since 2009
Retired Chairman, CEO & President, PG&E Former Chairman, CEO, President & COO, DTE
• Seasoned public company executive with strong transactional experience
• Electrical infrastructure expertise brings product development insights to electrification strategy
L C N S
James (Jim) Farley, Jr.
Director since 2020
President & CEO, Ford Motor Company Former GVP and GM, Lexus Division, Toyota
• Extensive automotive industry knowledge and experience
• Focused on accelerating Ford’s transformation through operational excellence that benefits customers and delivers sustainable profit growth
Henry Ford III
Director since 2021
Former Director of Investor Relations, Ford Motor Company
• Unique insight into company operations and customer viewpoints from 15-year career at Ford Motor Company
• Cross functional experience in labor relations, purchasing, marketing and sales, corporate strategy, and investor relations
S F
Alexandra Ford English
Director since 2021
Director, Global Brand Merchandising, Ford Motor Company
• Provides valuable insights into successful brand management and building trusted relationships with customers
• Extensive knowledge of autonomous vehicle operations
F S
William (Bill) Clay Ford, Jr.
Director since 1988
Executive Chair, Ford Motor Company Former CEO, Ford Motor Company
• Long-term perspective and history with Ford add value to stakeholder relationships and corporate culture
• Recognized as a leader in advancing mobility, connectivity and electrification in the auto industry
F S
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Directors (Cont’d)
L Lead Independent I Independent A Audit Compensation, F Finance N Nominating & Governance S Sustainability, Innovation & Policy Talent & Culture
C
William (Bill) Kennard
Director since 2015
Chairman, Velocitas Partners Former US Ambassador to the EU Former Chairman of the U.S. FCC
• Diverse experience in private equity, law and public policy
• Technological regulatory landscape expertise helps innovative work in connectivity and mobility solutions
I F N S
John Thornton
Director since 1996
Executive Chairman, Barrick Gold
Former Co-CEO, Goldman Sachs International
• International business (especially in China), emerging markets and financial expertise
• Offers insight in financing the strategic plan, improving the balance sheet and creating profitable growth
I C F N
John Veihmeyer
Director since 2017
Retired Chairman & CEO, KPMG Retired Chairman, KPMG International
• International business expertise and financial and risk management skills add value at an unprecedented time of disruption in the automotive industry
• Recognized for his leadership in diversity and inclusion; board experience with gender equity-focused nonprofits
A N I
Beth Mooney
Director since 2019
Former Chairman & CEO, KeyCorp Former Vice Chair, Key Community Bank
• Public executive experience in finance and commercial lending
• Banking and business expertise enhances the Board during a transformational time for Ford and the industry
A N I
John Weinberg
Director since 2016
Co-Chairman & Co-CEO, Evercore Partners Former Vice Chairman, Goldman Sachs
• Finance, banking and capital markets expertise with a deep understanding of Ford, its history and its needs
• Financial expertise aids in rapidly improving fitness, reallocating capital and financing the business
I C F N S
Gov. Jon Huntsman, Jr.
Director since 2020
Vice Chair, Policy, Ford Motor Company Former U.S. Ambassador to Russia, China &
Singapore
• Brings a well-informed global perspective to Board deliberations
• Distinguished public service career provides important insight on governmental relations at the state, federal and international levels
William (Bill) Helman IV S
Director since 2011
General Partner, Greylock Partners
• Experience investing in new technologies provides critical perspectives as Ford continues to invest in connectivity and mobile technologies
• Expertise in finance, investing and M&A
I F N S
Lynn Vojvodich Radakovich Director since 2017
Former Executive Vice President & Chief Marketing Officer, Salesforce
• Marketing technology, innovation and market analysis expertise guides how Ford markets and positions itself
• Start-up and growth-stage technology expertise helps Ford as it invests in new technologies
I A N S
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Industry Leaders Bring Unique Perspective And Insights To Advance Our Strategy
Diverse and Relevant Experience on the Board
14 6
12 4
8 5
3
12 8
Risk Management Technology Finance Government International Marketing Manufacturing Public Company Board Current or Former CEO
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Director Tenure
Board Has Appropriate Mix Of Director Tenure To Ensure Diverse Perspectives
Number of Directors0 - 4 Years Served
5 - 9 Years Served
10+ Years Served
Average Tenure (Years) 8.9
8
1
5
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Ford’s Overall Executive Compensation Allocation Is In Line With Its Comparator Group’s Median
Executive Compensation
Elements of Compensation Comparators
Comparators
Comparators
Comparators Fixed vs. Variable
Short-Term vs.
Long-Term
Cash vs. Equity
36%
36%
18%
18% 18%
64%
64%
82%
64%
Cash 35%
Short-Term 35%
Fixed 17%
Salary 17%
Equity 65%
Long-Term 65%
Variable 83%
Long-Term Incentives
65%
Incentive
Bonus Target 18%
• Executive compensation is
structured to ensure that there is appropriate balance among various forms of compensation
• The Compensation, Talent and Culture Committee strikes a balance by looking at the
competitive market for executive talent, our business results and forecasts, and our key strategic goals for the year
• Special 2020 Pandemic Response Award and other special awards (i.e., accession awards) not
included in target opportunity mix
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Our Equity-Based Incentive Awards Are Tied To Our Performance And The Future Value Of Common Stock
Executive Compensation
• In 2021, long-term incentive awards were granted in Time-Based Restricted Stock Units (40%) and Performance Units with a three-year performance period (60%)
– Our Time-Based Units vest over three years at a rate of 33%-33%-34%
– Our Performance Unit Program aligns executive interests with shareholder interests by awarding performance to internal financial metrics over separate one-year performance periods in years one and two. Restricted Stock Units are “banked”
after each of year one and two and relative TSR performance against a peer group over a three-year performance period modifies the final award by +/- 25%
2021 2022 2023 2024 AND BEYOND
Performance Period Final Awards Subject to Ownership Guidelines Equity award levels banked on
performance to metrics in each of 2021 and 2022, and modified +/- 25% based on 3-year relative TSR performance Performance Units granted on March 4, 2021
Although shares are fully vested, executives must comply with ownership guidelines
Final Award in shares of common stock in March 2024
Awards subject to reduction/cancellation/recovery based on clawback policy
SECRET 39
Cautionary Note On Forward-Looking Statements
Statements included or incorporated by reference herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:
• Ford and Ford Credit’s financial condition and results of operations have been and may continue to be adversely affected by public health issues, including epidemics or pandemics such as Covid-19;
• Ford is highly dependent on its suppliers to deliver components in accordance with Ford’s production schedule, and a shortage of key components, such as semiconductors, can disrupt Ford’s production of vehicles;
• Ford’s long-term competitiveness depends on the successful execution of its Plan;
• Ford’s vehicles could be affected by defects that result in delays in new model launches, recall campaigns, or increased warranty costs;
• Ford may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures, or new business strategies;
• Operational systems, security systems, and vehicles could be affected by cyber incidents and other disruptions;
• Ford’s production, as well as Ford’s suppliers’ production, could be disrupted by labor issues, natural or man-made disasters, financial distress, production difficulties, or other factors;
• Ford’s ability to maintain a competitive cost structure could be affected by labor or other constraints;
• Ford’s ability to attract and retain talented, diverse, and highly skilled employees is critical to its success and competitiveness;
• Ford’s new and existing products and mobility services are subject to market acceptance and face significant competition from existing and new entrants in the automotive and mobility industries;
• Ford’s results are dependent on sales of larger, more profitable vehicles, particularly in the United States;
• With a global footprint, Ford’s results could be adversely affected by economic, geopolitical, protectionist trade policies, or other events, including tariffs;
• Industry sales volume in any of Ford’s key markets can be volatile and could decline if there is a financial crisis, recession, or significant geopolitical event;
• Ford may face increased price competition or a reduction in demand for its products resulting from industry excess capacity, currency fluctuations, competitive actions, or other factors;
• Fluctuations in commodity prices, foreign currency exchange rates, interest rates, and market value of Ford or Ford Credit’s investments can have a significant effect on results;
• Ford and Ford Credit’s access to debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts could be affected by credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors;
• Ford’s receipt of government incentives could be subject to reduction, termination, or clawback;
• Ford Credit could experience higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles;
• Economic and demographic experience for pension and other postretirement benefit plans (e.g., discount rates or investment returns) could be worse than Ford has assumed;
• Pension and other postretirement liabilities could adversely affect Ford’s liquidity and financial condition;
• Ford could experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, perceived environmental impacts, or otherwise;
• Ford may need to substantially modify its product plans to comply with safety, emissions, fuel economy, autonomous vehicle, and other regulations;
• Ford and Ford Credit could be affected by the continued development of more stringent privacy, data use, and data protection laws and regulations as well as consumers’ heightened expectations to safeguard their personal information; and
• Ford Credit could be subject to new or increased credit regulations, consumer protection regulations, or other regulations.
We cannot be certain that any expectation, forecast, or assumption made in preparing forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward- looking statement, whether as a result of new information, future events, or otherwise. For additional discussion, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Please visit the IR website for more information about our Ford+ Plan.
https://shareholder.ford.com/investors/delivering-ford/default.aspx