Investors are showing a restrained reaction to word that Ford Motor Co. will restore its dividend for the first time in five years – a less than desirable outcome for the automaker’s senior management team who’d hoped that the nickel-a-share dividend would help drive up the Ford stock price.
With 4 billion shares of stock outstanding, the restoration of the Ford dividend is a nonetheless significant increase in its quarterly costs, totaling about $800 million annually, or $200 million every three months. Nonetheless, Ford officials have expressed hope, in recent months, that the restoration of the dividend would be a critical step in their goal of both boosting the maker’s stock – and helping it regain a much-sought investment grade credit rating.
“We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow,” Executive Chairman Bill Ford said in a press release announcing the dividend payment, which will be issued next March 1.
The great-grandson of company founder Henry Ford, the automaker’s CEO will pocket $736,500 per quarter for his 14.73 million shares of Ford Motor stock. That’s on top of the additional dividend he gets for the special Class B shares he and other family members own exclusively. The Ford family collectively get $979,000 a quarter for that stock, which is already paying a dividend. CEO Mulally, meanwhile, will get $875,000 for the 17.25 million shares of common stock he currently holds.