Welcome to today's edition of the Daily 5.
Senior executives who depart for jobs at other companies often generate speculation about the motivation behind their moves. Was the executive unhappy or was the new job irresistible? The truth rarely comes out because nondisclosure and nondisparagement agreements require them to be quiet.
So we probably won't know why Peter Stern — Ford Motor Co.'s prized catch from Apple Inc. — is leaving to become CEO of troubled fitness equipment maker Peloton Inc.
Clearly, Ford pinned high expectations on Stern when he came over in April 2023 to run the automaker's nascent car software services business. Stern is listed as a top-five executive in Ford's annual shareholder proxy statement and he was granted total compensation of $8.5 million in 2023, even though he only joined the automaker that year.
But New York-based Peloton offered him its top job, which in 2022 compensated then-CEO Barry McCarthy $168 million. Most of Peloton's top executives collected about $10 million last year, according to its 2024 proxy statement.
Stern also gets to take the helm of the company at a time when its stock price is near rock bottom. The shares got a boost from the CEO announcement today, rising 27 percent to $8.48 in afternoon trading. Those shares spent much of 2022 trading above $100 as the company enjoyed a post-pandemic boom from customers who wanted to work out at home.
Thus, if Stern boosts the stock, he probably stands to make ridiculous amounts of money beyond anything Ford could have paid him. And now Reuters is reporting today that Ford is slashing management bonuses to 65 percent of their total as it aligns compensation with quality performance. A coincidence?
So while we likely won't know Stern's true motivation, one must suspect he quickly left Ford for the opportunity to achieve full fiscal fitness.
In other Ford news today, the automaker launched a new vehicle customization program called Ford Custom Garage. As Michael Martinez writes, Ford aims to provide enthusiasts with a more convenient way to personalize their Broncos and F-150s directly through dealers.
Back to the topic of executive departures, Stellantis has had many of them, including its CFO. New CFO Doug Ostermann has gone on record talking about how the automaker is trimming inventories. According to our coverage today, Stellantis cut inventory in the U.S. by 50,000 vehicles in the third quarter and by an additional 30,000 in October, with a goal of reducing inventory by 100,000 by the end of the year. Ostermann said he expects that target to be reached by the end of November.
"We're making consistent progress reducing the stock levels in the U.S.," he said.
In other news, Mitsubishi is getting more bullish about its business in North America, but CEO Takao Kato warned today that another Donald Trump presidency might not be good for the company as the automaker imports all its vehicles into the U.S. market. "If he is elected, there would be some impact on our business as we export cars to the U.S.," Kato said.
Finally, the UAW local at General Motors' pickup plant in Fort Wayne, Ind., voted Wednesday to authorize a strike over staffing issues, but the vote wasn't an overwhelming majority and it's unclear if a strike will occur. As we reported today, about 76 percent of workers who voted were in favor of a strike, according to results posted by the local, which didn't indicate how many of those eligible cast ballots. The plant employs about 4,100 people, according to GM's website. The vote comes after the UAW failed to get strike authorization at a Stellantis plant in Kokomo, Ind., which is the home local for UAW President Shawn Fain.
Looking ahead to Friday, we're going to be taking a deep look into the future for humanoid robots in the auto industry. It's not science fiction any more.
That's it for today. Have a great rest of your day.
If you want to view this story in your browser, click here.
— Philip Nussel, online editor
