Ford Motor Co., citing its improved balance sheet, boosted its quarterly dividend for common shares and the stock held by its founding family by 25 %, with the quarterly distribution set to rise to 12.5 cents, up from 10 cents.
After a five-year drought when the company suspended its payout, Ford resumed paying a distribution in 2012 at 5 cents and doubled it to 10 cents a year ago. The increased dividend will pay $35.4 million annually to members of the company’s founding family for their 70.9 million Class B shares that give them 40 percent voting power.
“This is how they get paid, so that is a big motivation,” Kevin Tynan, an analyst at Bloomberg Industries, said of the Ford family. “You can do it under the guise of returning value to shareholders, but the family is a big driver.”
Ford rose 1.9 % to $15.84 at the close in New York. The shares advanced 19 % last year as the Standard & Poor’s 500 Index gained 30 %.
Executive Chairman Bill Ford, 56, held 4.44 million Class B shares as of Feb. 1, according to the company’s annual proxy filing last year. The higher dividend would boost the annual payout for those holdings to $2.22 million. Including the 14.6 million common shares that he held as of Feb. 1, the chairman would stand to collect almost $9.54 million per year.
The dividend increase reflects Ford’s strong performance in 2013, including a $3 billion improvement in its liquidity position through the third quarter, the company said in its statement. The second-largest U.S. automaker last month said pretax profit rose to about $8.5 billion in 2013 as it logged its best sales in its home country in six years and reported record deliveries in China.