By Christopher Otts
The electric-vehicle reset at Ford Motor and General Motors has come with multibillion-dollar costs -- yet also the highest compensation ever for the CEOs during their tenures.
Last year Ford announced $19.5 billion in write-offs as it retooled its EV strategy. Ford's board in addition changed how it calculates bonuses for Chief Executive Officer Jim Farley and other top executives, according to a recent proxy statement.
The change tied the 2025 bonus payouts partly to the sales of "electrified" vehicles -- meaning EVs and gasoline-electric hybrids -- rather than sales of EVs alone, as had been the case in 2023 and 2024.
Ford ended up exceeding its "electrified" sales goal. Farley notched a 11% compensation increase to $27.5 million in 2025, even as Ford reported its worst loss -- $8.2 billion -- since 2008. GM executives, meanwhile, met bonus targets based in part on disregarding the costs of its EV retreat and on an adjustment to exclude tariffs.
The companies' performance last year suggests investors are also looking past tariff costs and EV writedowns, cheering on Detroit's opportunity to sell more high-margin gasoline trucks and SUVs without the money-losing EVs that had been necessary to comply with fuel-economy rules, which President Trump gutted.
Ford shares rose 32% in 2025, while GM's climbed 53%, according to FactSet.
A Ford spokesman said Farley's pay reflects overall results, adding that the company's total return, including dividends, of 42% beat the market and its automaker peer group, while Ford had record revenue. He said Ford didn't disregard unexpected costs such as tariffs when calculating bonuses.
Asked about the change to reward executives for hybrid sales and not only EVs, the Ford spokesman said the company recognizes "the importance of a broader portfolio of electrified powertrains such as hybrid vehicles." A GM spokesman declined to comment.
GM Chief Executive Mary Barra for her part had a pay package of $29.9 million last year, though her year-to-year increase was only 1.3%. Barra wasn't GM's highest-paid executive. The company's new chief product officer, Sterling Anderson, got $40 million, including a $24 million incentive to leave the self-driving trucking startup Aurora Innovation for GM.
Ford last year ended up incurring about $15 billion in EV-related write-downs, while GM's totaled $7.9 billion. These write-downs were disregarded for the purposes of determining executive compensation.
GM's board said the "dynamic policy changes" under Trump were outside its executives' control and "should not unduly penalize management's multi-year efforts to advance our long-term EV strategy," according to the company's recent proxy filing.
GM did keep EV-related goals, which weren't met, in its annual bonus plan. It made an adjustment so executives wouldn't benefit from reduced losses when the company stopped making as many EVs. The details of those goals weren't disclosed in the proxy statement.
Ford lost $4.8 billion on EVs in 2025. GM doesn't disclose losses on its electric cars. Ford closed 2025 by canceling the F-150 Lightning electric pickup truck. It is pinning its hopes on a new family of EVs starting with a $30,000 truck. GM was America's No. 2 EV seller in 2025 after Tesla and hasn't canceled any electric models, save for a delivery van.
For Barra and GM's C-suite, the board excluded from bonus calculations more than $3 billion in tariff costs incurred last year.
The board said it was an appropriate move after GM executives scrambled to rework the company's manufacturing footprint, saving at least $900 million on tariffs.
Corporate boards routinely face judgment calls about the extent to reward or penalize executives for unforeseen events, said Douglas Chia, a corporate-governance consultant and president of Soundboard Governance.
He said a case can be made that auto executives should be insulated from Trump's tariff onslaught and the gutting of EV incentives.
"There are no right answers," he said.
Write to Christopher Otts at christopher.otts@wsj.com
(END) Dow Jones Newswires
April 22, 2026 19:35 ET (23:35 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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