This Automaker Is Paying Out Big Bonuses to 75,000 Workers — Here’s Why

Ford is sharply increasing bonuses for thousands of salaried workers after hitting decade‑best vehicle quality targets. The automaker will give its employees their largest bonuses in years when it distributes payments next month.

According to a recent Reuters report, Ford is setting its companywide salaried bonus at 130% of target for 2025 performance, up from 84% for 2023 and 69% for 2024. The higher payout covers 75,000 salaried employees globally, ranging from engineers and product managers to corporate executives. 

The company calculates bonuses by taking a percentage of base pay and multiplying it by the companywide factor. For example, a worker with a 10% target bonus on a $100,000 salary would receive $13,000 on a 130% multiplier. 

Individual bonuses still depend on job level, performance and specific compensation package, so not every salaried employee will receive the same dollar amount, even under the same 130% factor, per Reuters. 

Why Ford increased bonuses

A strong improvement in “initial quality” — measured by the number of repairs needed in the first 90 days or how well the car performs in the first few months of ownership — is driving the bigger bonuses. Ford says initial quality is now at its best level in about a decade, according to Reuters. 

Initial quality is one of the core metrics that feed into Ford’s annual bonus formula, alongside financial performance and strategic goals like electric vehicle sales. After years of costly recalls and elevated warranty expenses, Ford leaders decided to make quality a part of compensation. 

Ford CEO Jim Farley initiated the change in 2023 after experiencing high recall numbers — Ford was the most recalled car manufacturer in 2022 — and significant warranty costs of around $1.9 billion that year. Yet 91% of managers were earning their full bonus in 2023.

“So now, that is not the case,” Farley said at a Wolfe Research investor conference in February 2024. “You have to set up a culture shift, a performance reward system where every engineering manager, purchasing component manager, every plant manager is fully accountable for the quality and cost of their work.”

Contrast with hourly workers

Ford runs two parallel systems: performance-driven bonuses for salaried staff and negotiated profit-sharing for hourly workers. While salaried bonuses are jumping, hourly workers who are part of the United Auto Workers union will see a smaller profit-sharing check compared to last year.

Ford reported earlier this week that hourly workers will receive profit-sharing checks of up to $6,780 for 2025, down from $10,208 the previous year. Ford spokeswoman Jessica Enoch told the Detroit Free Press that 56,300 active hourly employees and another 1,490 employees who retired in 2025 may be eligible for a profit-sharing payment. 

The automaker posted a loss of $8.2 billion for 2025, driven mostly by one-time electric vehicle charges, plus tariffs and a major supplier fire. 

Sign up for the Entrepreneur Daily newsletter to get the news and resources you need to know today to help you run your business better. Get it in your inbox.