As Chinese Sales Climb, Ford Calls In $1.8B in Share Buybacks
Ford Motor Co. (NYSE:F) will be buying back $1.8 billion worth of stock, or about 116 million shares, in order to help reduce the dilution caused by some recent stock grants to its executives and also to offset shares that may be issued to holders of convertible debt, Bloomberg reports. The stock popped on the news, hitting about $15.90, up 2.8 percent, by midday Thursday. The buyback will be concluded by the end of this year, the company said.
“These actions are consistent with our overall capital strategy to take anti-dilutive actions and position ourselves to further reduce Automotive debt,” Bob Shanks, Ford’s executive vice president and chief financial officer, said in the company’s statement. “The strength of our cash generation gives us confidence to take these actions to enhance shareholder returns. With these actions, we will reduce our diluted shares by about 3 percent.”
The announcement came shortly before Ford’s annual shareholder meeting, which took place in Delaware. At the meeting, all 16 board members were approved for another term, and shareholders shot down two proposals: one that would end the two-tier system of stock that gives the Ford family considerable power and another that would make it easier for a group of shareholders to call a special meeting.
CEO Alan Mulally, who is stepping down in July, garnered immense praise from virtually everyone. He’s widely credited with reversing the automaker’s fortunes and bringing Ford’s losses around with a mix of cost-cutting measures, a fully revamped lineup with more technology and better fuel efficiency, and better synergy throughout the company’s global operations. For his efforts, Ford awarded Mulally $23.3 million in compensation last year, up 11 percent. He’s made about $300 million at Ford since he came on board in 2006.