DEF 14A of Ally Financial Inc.
Filed Apr 5, 2024 · FY20230001193125-24-088480
Director Candidate Biographies
Director Candidate Biographies Set forth here is a brief description of the backgrounds and other characteristics of each director candidate. These, along with the skills and qualifications described earlier in this section, led the CNGC and the Board to conclude that the director candidates should be nominated for election at the Annual Meeting. Franklin W. Hobbs
Biographical Information
Biographical Information Director of Ally since May 2009 and the current Chairman of the Board. Mr. Hobbs served as President and Chief Executive Officer of Ribbon Communications Inc. from December 2017 through November 2019. Since 2004, he has been an advisor to One Equity Partners LLC. He was previously the Chief Executive Officer of Houlihan Lokey Howard & Zukin. In that role, he oversaw all operations, which included advisory services for mid-market companies involved in mergers and acquisitions and corporate restructurings. He previously was Chairman of UBS AG’s Warburg Dillon Read Inc. unit. Prior to that, he was President and Chief Executive Officer of Dillon, Read & Co. Inc. Mr. Hobbs earned his bachelor’s degree from Harvard College and master’s degree in business administration from Harvard Business School. He currently serves as a director of privately held Amherst Holdings LLC and Basin Holdings LLC. Mr. Hobbs previously served as a director of Lord Abbett & Company from 2000 through 2018, as Chairman of the Supervisory Board of BAWAG P.S.K. from March 2013 through March 2017, as a director of Ribbon Communications Inc. from December 2017 through November 2019, and as a director of Molson Coors Brewing Company from 2005 through May 2020.
Director Since: 2009
Director Since: 2009 Ally Board Committees:
Director Since: 2009
| • | Compensation, Nominating, and Governance |
Director Since: 2009
Other Public-Company Directorships:
Director Since: 2009
| • | None |
Director Since: 2009
Kenneth J. Bacon
Biographical Information
Biographical Information Director of Ally since February 2015. Mr. Bacon is the co-founder and a partner of RailField Realty Partners, a real estate asset management and private-equity firm based in Bethesda, Maryland. Prior to this, he held a number of leadership positions at Fannie Mae, most recently as Executive Vice President of the multi-family mortgage business. He retired from Fannie Mae in 2012 following a 19-year career. Mr. Bacon also held executive positions at Resolution Trust Corporation, Morgan Stanley & Company, Inc., and Kidder Peabody & Co. He currently serves on the public-company boards of Arbor Realty Trust, Inc., Comcast Corporation, and Welltower, Inc., and on the advisory board of Dominium Management, a privately held housing development and management company. He previously served as a director of Bentall Kennedy L.P. until its acquisition by Sun Life Financial of Canada in 2015 and as a director of Forest City Realty Trust, Inc. until its acquisition by Brookfield in 2018. Mr. Bacon earned a bachelor’s degree from Stanford University, a master’s degree in international relations from the London School of Economics, and a master’s degree from Harvard Business School.
Director Since: 2015
Director Since: 2015 Ally Board Committees:
Director Since: 2015
| • | Risk (Chair) |
Director Since: 2015
Other Public-Company Directorships:
Director Since: 2015
| • | Arbor Realty Trust, Inc. (NYSE: ABR) |
Director Since: 2015
| • | Comcast Corporation (NASDAQ: CMCSA) |
Director Since: 2015
| • | Welltower, Inc. (NYSE: WELL) |
Director Since: 2015
| | 2024 Proxy Statement • 10 |
Director Since: 2015
William H. Cary
Biographical Information
Biographical Information Director of Ally since June 2016. Mr. Cary is a former executive of General Electric (GE). During his 29 years at GE, he held several leadership positions in consumer and wholesale finance, as well as in the areas of finance, risk, and capital markets. His roles included the President and Chief Operating Officer of GE Capital and the President and Chief Executive Officer of GE Money in London. Mr. Cary began his career at Clorox Company. He currently serves on the public-company boards of Rush Enterprises, Inc. and SecureWorks Corp. and is a director of privately held LendMark Financial Services, LLC. Mr. Cary previously served as a director of BRP, Inc. from September 2015 through May 2019. Mr. Cary received his bachelor’s degree in business administration and finance from San Jose State University.
Director Since: 2016
Director Since: 2016 Ally Board Committees:
Director Since: 2016
| • | Audit (Chair) |
Director Since: 2016
Other Public-Company Directorships:
Director Since: 2016
| • | Rush Enterprises, Inc. |
Director Since: 2016
(NASDAQ: RUSHA / RUSHB)
Director Since: 2016
| • | SecureWorks Corp. (NASDAQ: SCWX) |
Director Since: 2016
Mayree C. Clark
Biographical Information
Biographical Information Director of Ally since May 2009. Ms. Clark is the founding partner of Eachwin Capital, an investment management organization which currently serves as her family office. Previously, she was a partner and member of the executive committee of AEA Holdings and held a variety of executive positions at Morgan Stanley over a span of 24 years, serving as Global Research Director, Director of Global Private Wealth Management, deputy to the Chairman, President and Chief Executive Officer, and non-executive Chairman of Morgan Stanley Capital International. Since May 2018, Ms. Clark has been a member of the Supervisory Board of Deutsche Bank AG, where she chairs the Risk Committee and is a member of the Nomination Committee and the Strategy Committee. She currently serves as a director of privately held Allvue Systems Holdings, Inc., and previously served as a director of Taubman Centers, Inc. from January 2018 until its acquisition by Simon Property Group, Inc. in December 2020. Ms. Clark is a member of the Council on Foreign Relations. She received her master’s degree in business administration from Stanford University Graduate School of Business and her bachelor’s degree from the University of Southern California.
Director Since: 2009
Director Since: 2009 Ally Board Committees:
Director Since: 2009
| • | Audit |
Director Since: 2009
| • | Compensation, Nominating, and Governance |
Director Since: 2009
| • | Deutsche Bank AG (NYSE: DB) |
Director Since: 2009
| | 2024 Proxy Statement • 11 |
Director Since: 2009
Kim S. Fennebresque
Biographical Information
Biographical Information Director of Ally since May 2009. Mr. Fennebresque served as Chairman, President, and Chief Executive Officer of Cowen Group, Inc., a multinational investment bank, from 1999 to 2008. Prior to joining Cowen Group, he served as Head of the Corporate Finance and Mergers & Acquisitions departments at UBS, as General Partner and Co-Head of Investment Banking at Lazard Frères & Co., and in various positions at The First Boston Corporation. Mr. Fennebresque is a graduate of Trinity College and Vanderbilt Law School. He currently serves on the public-company boards of Albertsons Companies, Inc. and BlueLinx Holdings Inc., and on the Supervisory Board of BAWAG P.S.K. Mr. Fennebresque formerly served on the boards of Ribbon Communications Inc., Delta Tucker Holdings, Inc., Rotor Acquisition Corp., TEAK Fellowship, Fountain House, and Common Good.
Director Since: 2009
Director Since: 2009 Ally Board Committees:
Director Since: 2009
| • | Compensation, Nominating, and Governance (Chair) |
Director Since: 2009
| • | Technology |
Director Since: 2009
Other Public-Company Directorships:
Director Since: 2009
| • | Albertsons Companies, Inc. (NYSE: ACI) |
Director Since: 2009
| • | BAWAG P.S.K. (VIE: BG) |
Director Since: 2009
| • | BlueLinx Holdings Inc. (NYSE: BXC) |
Director Since: 2009
Thomas P. Gibbons
Biographical Information
Biographical Information Director of Ally since August 2023. Mr. Gibbons served as Chief Executive Officer and a director of Bank of New York Mellon Corporation (BNYM) from 2019 to 2022. Prior to this, he served as BNYM’s Vice Chairman and Chief Executive Officer of Clearing, Markets, and Client Management from 2017 to 2019. Mr. Gibbons also served from 2008 through 2017 as BNYM’s Chief Financial Officer. Prior to this, he held various leadership roles in the risk, treasury, and client-management areas. He currently serves on the public-company board of Invesco Ltd. and previously served as a director of publicly-held PHH Corporation, a financial services company, from 2011 until 2017. He currently serves on the board of trustees of Pace University and on the advisory board of Wake Forest University’s Business School. He received a bachelor’s degree in business administration from Wake Forest University and a master’s degree in business administration from Pace University.
Director Since: 2023
Director Since: 2023 Ally Board Committees:
Director Since: 2023
| • | Audit |
Director Since: 2023
| • | Risk |
Director Since: 2023
| • | Invesco Ltd (NASDAQ: IVZ) |
Director Since: 2023
| | 2024 Proxy Statement • 12 |
Director Since: 2023
Melissa Goldman
Biographical Information
Biographical Information Ms. Goldman currently serves as Vice President, Corporate Engineering for Google, LLC, having joined in January 2022. Previously she held several leadership positions with JPMorgan Chase & Co. (JPM), most recently as Managing Director and Global Corporate Chief Information Officer as well as Chief Data Officer. Her responsibilities spanned governance and execution, with a significant focus on the risk and control environment inclusive of cybersecurity. Prior to joining JPM in March 2014, Ms. Goldman served in a number of roles at Goldman Sachs & Co. dating back to 1994, which included various leadership positions within the areas of technology supporting market, credit and liquidity risk, finance, and collateral management. She began her career as a consultant with Andersen Consulting from 1992 through 1994. Ms. Goldman received her bachelor’s degree in applied mathematics and computer science from Carnegie Mellon University in Pittsburgh, Pennsylvania in May 1992.
Director Since: 2022
Director Since: 2022 Ally Board Committees:
Director Since: 2022
| • | Risk |
Director Since: 2022
| • | Technology |
Director Since: 2022
Other Public-Company Directorships:
Director Since: 2022
| • | None |
Director Since: 2022
Marjorie Magner
Biographical Information
Biographical Information Director of Ally since May 2010. Ms. Magner was a founding member of Brysam Global Partners, a specialized private-equity firm investing in financial services, and served as a partner from 2007 through December 2019. Prior to that, she served as Chairman and Chief Executive Officer of the Global Consumer Group at Citigroup. In this position, she was responsible for the company’s operations, serving consumers through retail banking, credit cards, and consumer finance. She earned a bachelor’s degree in psychology from Brooklyn College and a master’s degree from Krannert School of Management at Purdue University. Ms. Magner previously served on the board of Accenture plc from 2006 through January 2019, most recently as lead director, and also previously served on the board of TEGNA Inc. Ms. Magner currently serves as a member of the Brooklyn College Foundation and is on the Dean’s Advisory Council for the Krannert School of Management.
Director Since: 2010
Director Since: 2010 Ally Board Committees:
Director Since: 2010
| • | Compensation, Nominating, and Governance |
Director Since: 2010
| • | Risk |
Director Since: 2010
| • | None |
Director Since: 2010
| | 2024 Proxy Statement • 13 |
Director Since: 2010
David Reilly
Biographical Information
Biographical Information Mr. Reilly is a former executive of Bank of America Corporation (Bank of America). During his 10 years at Bank of America, he held several leadership positions within the technology area, most recently serving as Chief Information Officer, Global Banking & Markets. Prior to joining Bank of America, Mr. Reilly spent 28 years serving in various technology and network security roles with several large financial institutions, including Morgan Stanley, Credit Suisse First Boston, Goldman Sachs Group, Inc., Merrill Lynch & Co, Inc., and HSBC Group. He currently serves as a director for privately held Data Dynamics, Inc. and is a member of the board of NPower, a nonprofit organization. Mr. Reilly began his career upon completing his A-Level schooling in the United Kingdom.
Director Since: 2022
Director Since: 2022 Ally Board Committees:
Director Since: 2022
| • | Audit |
Director Since: 2022
| • | Technology |
Director Since: 2022
Other Public-Company Directorships:
Director Since: 2022
| • | None |
Director Since: 2022
Brian H. Sharples
Biographical Information
Biographical Information Director of Ally since August 2018. Mr. Sharples co-founded Twyla, Inc., a privately held online art sales company, serving as its Chairman from October 2016 until December 2018. From April 2004 through September 2016, Mr. Sharples served as co-founder, Chairman, and Chief Executive Officer of HomeAway, Inc., a global online marketplace for the vacation rental industry, and he continued serving as Chairman through January 2017. Prior to this, he served as President and Chief Executive Officer of IntelliQuest Information Group, Inc., a supplier of marketing data and research to technology companies. He began his career as a consultant at Bain & Company, a global management consulting firm, and has engaged in several entrepreneurial and investment activities since that time. Mr. Sharples currently serves as Chair of the public-company board of GoDaddy Inc., and previously served on the boards of Yelp Inc., Avalara, Inc., HomeAway, Inc., RetailMeNot, Inc. and Kayak, Inc. He also serves as a director for privately held RVshare LLC. and Design Pickle, LLC. Mr. Sharples earned a bachelor’s degree in math and economics from Colby College and a master’s degree in business administration from the Stanford Graduate School of Business.
Director Since: 2018
Director Since: 2018 Ally Board Committees:
Director Since: 2018
| • | Risk |
Director Since: 2018
| • | Technology (Chair) |
Director Since: 2018
| • | GoDaddy, Inc. (NYSE: GDDY) |
Director Since: 2018
| | 2024 Proxy Statement • 14 |
Director Since: 2018
Michael G. Rhodes
Number of Meetings in 2023: 10
| • | Ally’s executive leadership development and succession planning, the compensation of non-employee directors, and the disclosure of executive compensation matters as required by applicable law; |
Improved our Environment: Beehives Fit for a Queen
| Pay Component | Non-Employee Director Compensation | | Annual Cash Retainer | • $90,000(a) | | Annual Equity Retainer | • $145,000(b) | | Annual Retainer—Board Chair | • Cash: $60,000(a) | | | • Equity: $90,000(b) | | Annual Cash Retainer—Committee Chairs(a) | • AC: $60,000 | | | • RC: $60,000 | | | • CNGC: $50,000 | | | • TC: $50,000 | | Annual Cash Retainer—Committee Members(a) | • $20,000 |
2023 Director Compensation Table
2023 Director Compensation Table
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(a) | Total ($) | | Franklin W. Hobbs | 170,000 | 235,024 | 405,024 | | Kenneth J. Bacon | 170,000 | 145,002 | 315,002 | | Maureen A. Breakiron-Evans(b) | 43,928 | — | 43,928 | | William H. Cary | 170,000 | 145,002 | 315,002 | | Mayree C. Clark(c) | 130,070 | 145,002 | 275,072 | | Kim S. Fennebresque | 180,000 | 145,002 | 325,002 | | Thomas P. Gibbons(d) | 54,049 | 120,848 | 174,897 | | Melissa Goldman(e) | 130,079 | 145,002 | 275,081 |
2023 Director Compensation Table
| | 2024 Proxy Statement • 30 |
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(a) | Total ($) | | Marjorie Magner | 130,000 | 145,002 | 275,002 | | David Reilly(f) | 130,079 | 145,002 | 275,081 | | Brian H. Sharples | 130,000 | 145,002 | 275,002 | | Michael F. Steib | 180,000 | 145,002 | 325,002 |
2023 Director Compensation Table
(a) Includes Director DSUs received during 2023. The number of Director DSUs granted is determined by the fair market value of Ally’s common stock on the applicable grant date. (b) Ms. Breakiron-Evans retired from the Board effective May 2, 2023. (c) Ms. Clark elected to defer 50% of her cash retainer payments in the form of Director DSUs. (d) Mr. Gibbons elected to defer 100% of his cash retainer payments to a notional cash-plus-interest account. (e) Ms. Goldman elected to defer 100% of her cash retainer payments in the form of Director DSUs. (f) Mr. Reilly elected to defer 100% of his cash retainer payments in the form of Director DSUs. The following table sets forth the aggregate number of Director DSUs held by each non-employee director at December 31, 2023.
Scorecard Process for Assessing Performance and Informing Compensation
Scorecard Process for Assessing Performance and Informing Compensation Ally’s executive compensation program is designed to have a strong link between pay and performance, with a substantial emphasis on long-term performance to align with stockholder interests. In designing the program and setting target compensation for our NEOs, the CNGC considers a multitude of factors including individual performance, internal pay equity, input from our compensation consultant on market data and trends with a focus on our peer group and companies with which we compete for talent, roles and responsibilities, and stockholder feedback. The CNGC annually reviews the compensation of all NEOs for market competitiveness and alignment with the individual’s level of experience, expertise, and responsibility. The CNGC uses a scorecard approach to establish performance expectations, assess performance, and inform compensation decisions to ensure incentive compensation drives performance in a manner that prioritizes safety and soundness and appropriately manages risk, which is essential to long-term value creation in highly regulated financial institutions. The scorecard consists of five pillars, which include key financial metrics, business indicators, risk management indicators, consumer indicators, and cultural indicators. Each pillar includes established objectives and measures and the pillars are weighted in a way that prioritizes “the what” (inclusive of the financial metrics and business indicators) while balancing “the how” (inclusive of the risk management, consumer, and cultural indicators). The CNGC believes this holistic approach to determine total incentive compensation is appropriate as it provides flexibility to navigate the dynamics of a fluid macro-economic environment while incentivizing NEOs to focus on risk management and execution of our long-term strategic priorities. At the beginning of each year, the scorecard is created to align with and support the business plan approved by the Board. The CNGC establishes quantitative and qualitative objectives and measures across each of the five scorecard pillars. The CNGC periodically reviews enterprise performance against the scorecard, including at the end of the year. The final scorecard review informs determination of the incentive compensation pool, which is capped at 200% of the funding target. The CNGC then reviews each NEO’s individual performance against the pre-established goals together with the NEO’s self-assessment, a leader assessment, and input from control functions to determine the executive’s total incentive compensation for the year, subject to a cap of 200% of the NEO’s target incentive. Through this approach, we believe that incentive compensation for each NEO appropriately reflects their contribution to the company’s performance and their management of risk.
Elements of Compensation
Elements of Compensation Ally’s executive compensation program consists of a fixed base salary and at-risk incentive compensation designed to incentivize performance by aligning compensation to the achievement of performance metrics and strategic objectives outlined in the scorecard. Once approved, each NEO’s total incentive compensation is allocated across annual cash incentive, PSUs, and RSUs, according to a formulaic mix that is significantly weighted towards long-term compensation. In 2023, the CEO’s incentive was allocated 35% annual cash incentive and 65% long-term incentive award, comprised 50% of PSUs and 50% of RSUs. For all other NEOs, the incentive is allocated 40% annual cash incentive and 60% long-term incentive award, comprised 50% of PSUs and 50% of RSUs. These awards are made within two months after the performance year has concluded. To further incentivize long-term performance, the PSUs are subject to the achievement of additional long-term performance goals. The grant date fair value of PSUs is set as an allocation of the total incentive, which is determined by annual performance relative to the scorecard. The ultimate value received from the portion of the incentive that is allocated to PSUs is based on the level of attainment of the performance goals over an additional three-year performance period. For PSUs and RSUs, any dividends declared over the vesting period are accumulated and paid at or after the time of settlement. A graphical overview of the compensation elements and scorecard approach is provided below.
2023 Performance and Incentive Awards
2023 Performance and Incentive Awards 2023 Scorecard At the beginning of 2023, the CNGC established the scorecard for the year based on the business plan approved by the Board. We have established baseline targets for each of our enterprise key performance indicators (KPIs) over a three-year strategic plan horizon. These targets and forecasts are based on a combination of market analysis, competitive benchmarking, execution capabilities, and stakeholder expectations. Targets and KPIs are assessed on an annual basis and the year-over-year decline in certain financial metrics was reflective of the broader macro-economic environment, specifically the cumulative impact of rapidly rising interest rates and the continued normalization of credit losses. Despite lower year-over-year targets in certain areas, the established targets and actual performance in 2023 demonstrate steady execution that positions Ally for strong financial results over the strategic plan horizon. Given the uncertainty in the macro environment, we have also developed alternate scenarios that contemplate a variety of interest rate environments and credit conditions. In addition, we monitor KPIs to manage to our risk appetite as set by the Risk Committee. These key performance indicators and targets are shared and reviewed regularly by the Board and were considered by the CNGC when approving the 2023 scorecard. Ally achieved above-target performance in four of the five scorecard pillars—business, risk management, consumer and cultural – and performed below-target on certain key financial metrics. The 2023 performance against targets is particularly strong in the context of the macro-environment as the CNGC set the targets prior to the regional banking crisis in March 2023. Given the heavier weighting the scorecard places on financial performance, the incentive pool was funded slightly below target. The 2023 scorecard and performance outcomes are shown below, followed by context for performance within each of the pillars that was considered by the CNGC in assessing overall achievement.
2023 Performance and Incentive Awards
| | 2024 Proxy Statement • 48 |
2023 Performance and Incentive Awards
2023 Performance Relative to Scorecard The year of 2023 was one of significant change, and Ally delivered solid operational and financial results against a fluid backdrop. We believe that our “Do It Right” culture is a competitive advantage and that remained a top priority for the Board and our leadership team. We took care of our employees, who in turn took care of our customers and communities, driving long-term results for our stakeholders despite significant headwinds. We focused on delivering differentiated offerings for our consumer and dealer customers and deepening those relationships, which resulted in momentum across our businesses and maintaining market leading positions in our established franchises.
2023 Performance and Incentive Awards
| | 2024 Proxy Statement • 49 |
2023 Performance and Incentive Awards
The below provides additional detail on Ally’s performance across each of the five scorecard pillars and highlights how the measures support our strategic objectives.
2023 Performance and Incentive Awards
| • | Key Financial Metrics: We continued to face headwinds from sustained high short-term interest rates pressuring our net interest margin. While we did not meet our total adjusted revenue goals, we achieved core pre-tax income within the low end of our target range and delivered on our expense targets through thoughtful planning and ongoing actions to drive long-term stockholder value. |
2023 Performance and Incentive Awards
| • | Business Indicators: Our Dealer Financial Services business demonstrated the value of our strength and scale in the marketplace as we saw a record 13.8 million consumer auto applications that led to $40 billion of consumer auto originations with a 10.7% retail auto originated yield, roughly 250 basis points higher than the prior year. Consumer auto originations of $40.0 billion compared to the $43.0 billion target was an intentional and deliberate outcome that was aligned with a growing focus on capital optimization, evident in lower consumer auto application approval rates year-over-year (34% vs. 30% in 2022 and 2023, respectively). While consumer auto originations of $40.0 billion was below the $43.0 billion scorecard target, the CNGC assessed this as “above-target” performance given the operating environment and pending regulatory reform potentially impacting regulatory capital following the regional banking crisis. In addition, above-target Insurance written premium over $1 billion and record earned premium of $1.3 billion continued to grow durable fee revenue and evidence our unique dealer value proposition. Despite an extremely competitive environment for retail deposits, we delivered record net deposit customer growth and grew retail deposits in every quarter of 2023 to $142.3 billion while maintaining industry leading customer retention above 95%, demonstrating the strength and quality of our market-leading, consumer-oriented deposits franchise. Achieving 3 million primary deposit customers, while consistent with established scorecard targets, was a particularly strong result for Ally given the events of March 2023 which intensified competition for deposits. As such, the CNGC assessed this as “above-target” performance. Additionally, Corporate Finance steadily grew held-for-investment loans and continued to deliver strong returns in a challenging market backdrop. |
2023 Performance and Incentive Awards
| • | Risk Indicators: The regional banking crisis of March 2023 highlighted the importance of liquidity, and we ended 2023 with $63.5 billion total available liquidity, roughly 5.5 times our uninsured deposit balances. Capital allocation is a top priority, and in 2023, we leaned into optimization with a focus on growing our highest returning and scaled businesses, while paring back in other areas to better serve our dealer and consumer customers and grow excess capital. |
2023 Performance and Incentive Awards
| • | Consumer and Cultural Indicators: Our strong brand and culture weathered the challenges of 2023, and our scorecard achievement levels reflect that. We retained a high level of brand reputation through the March banking crisis and remain well-positioned in the industry while continuing to increase our customer satisfaction and brand awareness. We maintained our position as a progressive employer of choice with a strong culture as reflected in low attrition, engagement and belonging scores above the financial services benchmarks, and employee engagement in the top 10% of the global benchmark. |
2023 Performance and Incentive Awards
These achievements, in light of the challenging macro-environment, drove the CNGC’s incentive compensation decision to fund the incentive pool slightly below target.
2023 Incentive Awards
2023 Incentive Awards The CNGC determined incentive compensation would be paid below target for all NEOs except Mr. J. Brown and Mr. Hutchinson. Mr. J. Brown’s actual incentive compensation reflects the factors described above including performance outcomes against 2023 scorecard, his leadership in navigating an unexpected banking crisis and challenging interest rate environment, his willingness to provide four months transition period, and other factors. Mr. Hutchinson was paid out at target based on his contributions in role and mid-year hiring, while also considering forfeiture of his incentive opportunity at Goldman Sachs due to his voluntary termination. Additional factors considered in approving each NEO’s incentive compensation can be found in the 2023 Individual Performance and Compensation Decision section. The CNGC determined that each NEO’s target incentive will remain flat for 2024.
2023 Incentive Awards
| | 2024 Proxy Statement • 50 |
2023 Incentive Awards
The following table provides detail on 2023 total incentive compensation, which is then allocated to annual cash incentive, RSUs, and PSUs per a formulaic mix. All dollar values below represent $ millions.
2023 Incentive Awards
| Name | Role | 2023 Target Incentive Compensation | 2023 Actual Incentive Compensation | 2023 % of Target | 2024 Target Incentive Compensation | | Jeffrey J. Brown (a) | Former CEO | 12.5 | 12.5 | 100% | n/a | | Russell E. Hutchinson | Chief Financial Officer | 4.5 | 4.5 | 100% | 4.5 | | Douglas R. Timmerman | Interim CEO and President, Dealer Financial Services | 4.0 | 3.9 | 97% | 4.0 | | Diane E. Morais | President, Consumer & Commercial Banking | 3.8 | 3.7 | 97% | 3.8 | | Jason E. Schugel | Chief Risk Officer | 1.9 | 1.8 | 95% | 1.9 | | Bradley J. Brown | Treasurer | 1.5 | 1.4 | 95% | 1.5 | | Scott A. Stengel (b) | Former General Counsel | 2.0 | — | 0% | n/a |
2023 Incentive Awards
(a) For Mr. J Brown, target incentive compensation was set relative to his prior year incentive compensation. (b) Mr. Stengel forfeited his incentive compensation in connection with his resignation from the Company effective December 22, 2023.
2024 PSUs
2024 PSUs The PSUs granted to our NEOs in 2024 were awarded based on incentive allocation for 2023 performance. The 2024 PSUs vest following a three-year performance period based on achievement of Core ROTCE (excluding OCI) and a relative TSR performance modifier. The CNGC believes that these two metrics align executive compensation with the Company’s operating performance, risk appetite, and long-term stockholder returns, while providing for a potential payout adjustment based on the Company’s TSR performance against its compensation peer group. The CNGC establishes threshold, target, and maximum goals, along with TSR performance modifier thresholds, that appropriately challenge management and align with stockholder priorities. The following table provides additional information considered by the CNGC in selecting each performance metric.
2024 PSUs
| PSU Metric | Weight | Reason for Inclusion | | Core ROTCE (excluding Other Comprehensive Income (OCI)) (a) | 100% | A performance metric widely used in the banking industry that incentivizes management to effectively allocate capital and produce an appropriate return on stockholder’s equity. Core ROTCE, and the incorporated adjustments, provides a clear view of the underlying operational performance of the Company by excluding non-recurring or unique items which may impact the P&L but don’t convey the ongoing financial results of the Company. The metric aligns with what is provided to investors during quarterly earnings releases and highlighted across earnings documents. | | Relative TSR | Modifier | Intended to align the interests of management with stockholders by incentivizing performance that results in stockholder returns that are favorable to our compensation peer group |
2024 PSUs
| | 2024 Proxy Statement • 51 |
2024 PSUs
Under the Incentive Compensation Plan which governs our PSUs, the CNGC may exclude from Core ROTCE the impact of designated items so the performance reflects the underlying operational execution of management and payout levels are not artificially inflated or impaired by factors not reflective of ongoing operation of the business. For the 2023 PSU awards, the Core ROTCE calculation excludes the impact of accumulated OCI from the denominator of the calculation to remove the impact of potential volatility. The CNGC believes that removing accumulated OCI from the denominator of Core ROTCE is appropriate given the impacts are not reflective of the Company’s earnings and sustainable return profile, and it more closely aligns with stockholders’ assessment of the Company’s financial performance. Refer to Appendix A of this proxy statement for details on additional designated items.
2023 Individual Performance and Compensation Decisions
2023 Individual Performance and Compensation Decisions The compensation decision tables that follow are meant to provide insight into the individual contributions each NEO made to the scorecard objectives which the CNGC considered in determining incentive compensation. The tables are not meant to be substitutes for the Summary Compensation Table set forth later in this proxy statement but are provided to show the individual contributions of each NEO to the scorecard objectives and the individual compensation approved by the CNGC for the NEOs’ performance for 2023. The values and other information in these tables differ from those shown in the Summary Compensation Table due to SEC rules requiring that equity-based awards be reported based on the year of grant rather than the service year to which they relate. Accordingly, the PSUs and RSUs reflected in the following tables will be reported in next year’s Summary Compensation Table, as they were effective or granted in 2024. The value of PSUs assume that the related performance goals are achieved at the target. For further information on all long-term incentive awards, refer to Ally’s Executive Compensation Program—Elements of Compensation earlier in this CD&A.
2024 Performance Scorecard
2024 Performance Scorecard In response to stockholder feedback, the CNGC is committed to providing a consistent level of transparency regarding the scorecard on a go-forward basis. The 2024 scorecard follows the same structure as the 2023 scorecard detailed above, incentivizes the same objectives, and utilizes the same scorecard measures to drive stockholder value.
2023 Executive Transition and Business Continuity Awards
2023 Executive Transition and Business Continuity Awards In 2023, the CNGC took the following compensation-related actions intended to ensure the continued execution of Ally’s strategy by the leadership team, to address turnover in a competitive market, compensate individuals for an increased scope of responsibility, retain key talent, and ensure continued focus on the business. Executive Transitions On July 3, 2023, Mr. Hutchinson joined Ally as CFO. As approved by the CNGC, in conjunction with starting as CFO, Mr. Hutchinson received a one-time cash award of $1,000,000 and a one-time equity grant in the form of RSUs with a grant date fair market value of $2,500,000, vesting one-third on the first anniversary of the grant date, one-third on the second anniversary of the grant date, and one-third on the third anniversary of the grant date, in each case, subject to continued employment. This grant represents the economic equivalent of what was necessary to make Mr. Hutchinson whole on awards that were forfeited from his previous employer. Mr. B. Brown, Corporate Treasurer, served as Interim CFO until Mr. Hutchinson’s hire date. To compensate Mr. B. Brown for his increased scope of responsibility during this interim period, the CNGC approved a one-time award on March 7, 2023 in the form of RSUs with a grant date fair value of $750,000. The RSUs vest one-half on the second anniversary of the grant date and one-half on the third anniversary of the grant date, subject to continued employment. Ms. Morais advised the Company of her intent to retire after more than 15 years of leadership and service with Ally. On November 28, 2023, Ally and Ms. Morais entered into a transition agreement to secure her leadership through July 1, 2024. The Board determined it was critical to retain Ms. Morais’ leadership through the first half of 2024. Under this agreement, Ms. Morais will continue to receive her current salary and remains eligible for equivalent benefits and perquisites until her departure and was eligible for her full year 2023 cash and equity incentive compensation based on 2023 performance. Ms. Morais’ incentive compensation for 2024 will equal one-half of her target incentive compensation, paid 40% in cash and 60% in RSUs that will vest in equal installments on each of the first three anniversaries of her retirement date. In addition, she will also receive a one-time cash payment of $2,500,000 in July 2024 to retain her through the first half of the year. Her retention is critical to support a smooth CEO transition as well as the transition of key strategic, financial, and operational initiatives supporting the overall growth of the Consumer and Commercial Banking business—including a consumer value proposition launch and innovative enhancements to the suite of consumer offerings. Ms. Morais will not be entitled to severance upon her retirement. The transition agreement also includes terms and conditions governing Ms. Morais’ provision of services to Ally until her departure, her general release of claims, her obligations of confidentiality and cooperation, and other customary provisions. Ms. Morais did not receive a separate retention award of RSUs as described below. Retention Awards On October 20, 2023, the CNGC approved a grant of RSUs to select executives in order to support business and leadership continuity during the transitional period of identifying and onboarding a new CEO. These awards were deemed critical to maintain continuity of the leadership team and maintain focus on the execution of Ally’s long-term strategic priorities. The awards were granted in the form of RSUs which vest one-third on the second anniversary of the grant date, and two-thirds on the third anniversary of the grant date, subject to continued employment. The retention awards granted to current NEOs are shown below, and further details are provided in the Grants of Plan-Based Awards table.
2023 Executive Transition and Business Continuity Awards
| • | Mr. Timmerman, Interim CEO and President, Dealer Financial Services: 332,641 RSUs with a grant date fair value of $8,000,000. The value of this award reflects the criticality of Mr. Timmerman’s more than 30 years in the business and importance of maintaining approximately 22 thousand dealer relationships. At year-end 2023, Dealer Financial Services made up more than 60% of Ally’s total earning assets and during 2023 generated more than 80% of Ally’s total net revenue. Underpinning these financial metrics was solid operational execution over the past six years under Mr. Timmerman’s leadership. In 2023, the Auto Finance team decisioned 13.8 million consumer auto applications, or over $400 billion of potential volume, while only putting $40 billion on the balance sheet. The depth of application flow, driven by a multi-year effort to deepen dealer relationships, and selective decisioning allowed Ally to optimize risk-adjusted returns, driving long-term stockholder value. Within Insurance, $1.3 billion of earned premiums in 2023 was a record since our IPO, and written premiums were over $1 billion for the sixth year in a row. Insurance provides a durable revenue stream and diversifies Ally’s total net revenue with steady fee income. Continuing to leverage the synergies between Auto Finance and Insurance will allow Ally to protect and grow its market leading position in the industry. The CNGC determined not to provide additional one-time compensation to Mr. Timmerman for his service as interim CEO in part because of this retention award. His performance as interim CEO will be reflected in his 2024 annual incentive, which cannot exceed 200% of his target incentive. |
2023 Executive Transition and Business Continuity Awards
| • | Mr. Hutchinson, Chief Financial Officer: 72,766 RSUs with a grant date value of $1,750,000 |
2023 Executive Transition and Business Continuity Awards
| • | Mr. B. Brown, Corporate Treasurer: 41,581 RSUs with a grant date value of $1,000,000 |
2023 Executive Transition and Business Continuity Awards
| • | Mr. Schugel, Chief Risk Officer: 31,186 RSUs with a grant date value of $750,000 |
2023 Executive Transition and Business Continuity Awards
| • | Mr. Stengel, General Counsel: 103,951 RSUs with a grant date value of $2,500,000. These awards were forfeited in connection with his resignation from the Company effective December 22, 2023 |
CEO 2024 Compensation and New Hire Award
CEO 2024 Compensation and New Hire Award On March 27, 2024, we announced the appointment of Michael G. Rhodes as our next CEO. Mr. Rhodes will join Ally as CEO on April 29, 2024 (Effective Date). Mr. Rhodes has more than 25 years of experience in the financial services industry and most recently served as the Chief Executive Officer and President of Discover Financial Services and President of Discover Bank, as well as a member of the Board of Directors of Discover Financial Services and Discover Bank. Mr. Rhodes’s compensation package includes: (i) an initial annual base salary of $1 million; (ii) a total target incentive opportunity for fiscal 2024 of $10.5 million, with the actual amount earned payable after the end of 2024 in the form of a cash incentive (30%) and equity-based awards (70%), with such equity awards consisting 60% of PSUs and 40% of time-based RSUs, each to be granted under the Ally Incentive Compensation Plan; and (iii) other employee benefits consistent with those provided to other similarly situated executives officers, including relocation benefits. In addition, Mr. Rhodes will receive the following sign-on awards to make him whole for certain compensation he is forfeiting or otherwise foregoing from his prior employer in connection with his transition of employment:
CEO 2024 Compensation and New Hire Award
| • | make-whole equity grants with an aggregate grant date value of $16.2 million, which will consist of (x) $4.2 million (at target) in PSUs that will be earned and will vest subject to the same terms and conditions as those PSUs granted to the other Ally named executive officers in 2024 and (y) $12 million in RSUs that will vest one-third on each of December 11, 2024, December 11, 2025 and December 11, 2026, subject to his continued employment on such date and which will otherwise be subject to the terms and conditions that apply to our 2024 equity awards to our named executive officers. |
CEO 2024 Compensation and New Hire Award
In addition, if within 12 months after the Effective Date, Ally terminates Mr. Rhodes’s employment without cause in the absence of a change in control, he will receive a lump sum cash payment equal to two times his then current annual base salary if and to the extent that the Ally Financial Severance Plan or a successor plan does not provide him with such a payment, subject to his signing and not revoking a release of claims against Ally and its affiliates. Mr. Rhodes will also be eligible for the Ally Financial Severance Plan, as in effect from time to time.
Summary of Outstanding PSUs
Summary of Outstanding PSUs Each outstanding PSU awarded to our NEOs has a cumulative three-year performance period. Earned PSUs vest and settle in cash following the conclusion on the performance period. Any dividends declared during the vesting period are accumulated and paid at or after the time of settlement based on the number of PSUs earned at the conclusion of the performance period. PSUs pay out between 0% and 150% of target based on the achievement of the predetermined goals for Core ROTCE and TSV Growth Rate for 2022 PSU awards. PSUs granted in 2023 and 2024 pay out between 0% and 150% of target based on Core ROTCE (excluding OCI) and then a relative TSR performance modifier is applied as detailed below (see 2024 PSUs earlier in this CD&A for additional details). PSU payouts are determined using linear interpolation between the two nearest goals. The goals established by the CNGC for the PSUs granted in 2022, 2023, and 2024 follow: (a). This is a non-GAAP financial measure. Refer to Appendix A for applicable definitions and reconciliations.
Summary of Outstanding PSUs
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2021 Long-Term PSU Awards
2021 Long-Term PSU Awards The three-year performance period for PSUs granted in 2021 is complete, and the CNGC has certified the following results. After five years of strong PSU performance, 2021 awards were negatively impacted by the unprecedented tightening of interest rates. These higher interest rates have resulted in unrealized losses on Ally’s securities portfolio and a temporary reduction in tangible book value per share, which is a key component of the 2021 PSUs. Despite the lower TSV, Ally delivered strong results on Core ROTCE, which reflects management’s continued focus on driving stockholder return. The PSU calculation included adjustments for items designated by the CNGC at the time of grant, which primarily included the effect of impacts associated with acquisition activity and litigation settlements. As a result of these performance levels, PSUs granted in 2021 vested at 75% of target.
Compensation Consultant
Compensation Consultant FW Cook served as a compensation consultant to the CNGC during 2023 and for the 2023–2024 compensation cycle. The CNGC is directly responsible for the appointment, compensation, and oversight of the work of FW Cook. FW Cook provides ongoing advice with respect to the compensation plans covering the executives, including our NEOs, and non-employee directors. FW Cook, as requested, attends meetings of the CNGC involving compensation matters, reviews compensation materials developed by management in advance of the CNGC meetings, and shares information on market practices and trends with the CNGC. FW Cook undertakes no separate work for Ally. The CNGC assessed the independence of FW Cook under applicable NYSE listing standards and SEC rules and determined that its work for the CNGC does not raise any conflicts of interest.
Compensation Peer Group
Compensation Peer Group The CNGC, with input from FW Cook as its compensation consultant, annually reviews and approves the peer group used in assessing compensation competitiveness. In its review, the CNGC primarily considers the following factors:
Compensation Peer Group
| Industry Screen | Size and Scale | Talent Competitors | Direct Business Competitors | | U.S. publicly traded companies in the banking and consumer-finance industries | Companies with total assets or net revenue between one-third and three-times the size of Ally | Companies with whom Ally competes for senior executive talent | Companies with whom Ally competes for business |
Compensation Peer Group
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Compensation Peer Group
The CNGC also considers peers that are identified by the investor community, peers of our selected peers, and companies that include Ally within its peer group. Ally’s peer group is set forth in the following table. (a) On January 18, 2023, Signature Bank, SVB Financial, and Zions Bancorporation were added to the 2023 peer group based on alignment to criteria described in the chart below. While they were included in the 2023 peer group due to their suitability in early 2023, First Republic Bank, Signature Bank, and SVB Financial subsequently dissolved and therefore, have been removed from the 2024 peer group. The following chart shows how Ally compares to its 2023 peer group for some relevant metrics. In approving the peer group for 2023, the CNGC noted the scarcity of firms that are reflective of Ally’s structure, risk profile, complexity, activities, and size—more specifically, a company with a highly regulated all-digital bank, no brick-and-mortar branches, its initial public offering less than 10 years ago, nearly $200 billion in assets, and its largest business centered around secured consumer auto financing. As a result, peer-group data is only one factor among many considered by the CNGC in assessing performance—especially long-term value creation for stockholders—and determining executive compensation.
No Executive Employment Agreements
No Executive Employment Agreements The NEOs are employed on an at-will basis, and no NEO is party to an employment agreement with the Company.
Severance
Severance The NEOs are eligible for benefits under the Ally Financial Inc. Severance Plan. See Potential Payments Upon a Termination later in this proxy statement.
Summary Compensation Table
Summary Compensation Table The following table sets forth specified information regarding the compensation paid by the Company during 2023, 2022 and 2021, and the cash bonuses awarded in respect of each of these years, as applicable, to the NEOs.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(a) | Bonus ($)(b) | Stock Awards ($)(c) | All Other Compensation ($)(e) | Total ($) | | Jeffrey J. Brown Former Chief Executive Officer | 2023 | 1,000,000 | 4,375,000 | 7,965,789 | 53,595 | 13,394,384 | | | 2022 | 1,000,000 | 4,287,500 | 9,104,715 | 47,008 | 14,439,223 | | | 2021 | 1,000,000 | 4,900,000 | 9,599,579 | 46,167 | 15,545,746 | | Russell E. Hutchinson Chief Financial Officer | 2023 | 346,154 | 1,800,000 | 4,250,050 | 1,154,982 | 7,551,186 | | Douglas R. Timmerman Interim Chief Executive Officer and President, Dealer Financial Services | 2023 | 750,000 | 1,540,000 | 10,703,257 | 59,190 | 13,052,447 | | | 2022 | 732,692 | 1,800,000 | 2,794,695 | 50,006 | 5,377,393 | | | 2021 | 600,000 | 1,860,000 | 2,671,837 | 47,628 | 5,179,465 | | Diane E. Morais President, Consumer & Commercial Banking | 2023 | 750,000 | 1,460,000 | 2,343,279 | 43,847 | 4,597,126 | | | 2022 | 732,692 | 1,560,000 | 2,704,709 | 38,623 | 5,036,024 | | | 2021 | 600,000 | 1,800,000 | 2,647,473 | 36,216 | 5,083,689 | | Jason E. Schugel Chief Risk Officer | 2023 | 650,000 | 875,000 | 1,703,273 | 39,777 | 3,268,050 | | Bradley J. Brown Former Interim Chief Financial Officer and Current Corporate Treasurer | 2023 | 586,539 | 687,500 | 2,728,314 | 52,102 | 4,054,455 | | | 2022 | 544,231 | 975,000 | 854,722 | 46,628 | 2,420,581 | | Scott A. Stengel Former General Counsel | 2023 | 650,000 | — | 3,763,285 | 44,398 | 4,457,683 | | | 2022 | 638,462 | 840,000 | 1,474,751 | 45,887 | 2,999,100 | | | 2021 | 550,000 | 980,000 | 1,513,423 | 44,315 | 3,087,738 |
Summary Compensation Table
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Summary Compensation Table
(a) The amounts in this column reflect the actual amounts of salary paid to the NEOs in the relevant fiscal year. For the NEOs’ current base salaries, see Compensation Discussion and Analysis—2023 Performance Results and Compensation Decisions earlier in this proxy statement. (b) The amounts in this column for 2023 represent the annual cash bonuses paid to the NEOs in February 2024 in respect of 2023 performance, based on achievement of the CNGC’s assessment of overall Company and individual performance. For additional information on these bonuses, see Compensation Discussion and Analysis—Ally’s Executive Compensation Program earlier in this proxy statement. (c) These amounts reflect the aggregate grant date fair values of the RSUs, cash-settled PSUs (for NEOs other than Mr. B. Brown), and stock-settled PSUs (for Mr. B. Brown) granted under the ICP to the NEOs, in each case, calculated in accordance with FASB ASC Topic 718. The actual value that the NEOs will realize for these awards is a function of the value of the underlying shares if and when these awards vest and, for the PSUs, the level of attainment of the applicable performance goals. The amounts for the PSUs granted in 2023 were calculated based on the probable outcome of the performance conditions as of the grant date, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718. For these amounts, see the Grants of Plan-Based Awards in 2023 table later in this proxy statement. The following are the values of the 2023 PSUs as of the grant date assuming attainment of the maximum level of performance: Mr. J. Brown, $7,166,300; Mr. Timmerman, $2,430,007; Ms. Morais, $2,106,041; Mr. Schugel, $684,012; Mr. B. Brown, $702,052; and Mr. Stengel, $1,134,026. (d) The following table sets forth the accounting charges related to the conversion of the 2019 and 2020 PSU grants to cash settled, which were included with the amounts reported for 2021 for each NEO as required by FASB ASC Topic 718. For additional information on how we account for long-term incentive compensation, see Note 23 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.
Summary Compensation Table
| Name | Grant Date | Aggregate Grant Date Fair Value of PSUs ($)(i) | Accounting Charges due to PSU Modification to Convert to Cash-Settled ($)(ii) | | Jeffrey J. Brown | 1/28/2020 | 3,450,019 | 1,043,155 | | | 2/1/2019 | 3,000,019 | 1,727,526 | | Douglas R. Timmerman | 1/28/2020 | 950,024 | 287,251 | | | 2/1/2019 | 800,005 | 460,674 | | Diane E. Morais | 1/28/2020 | 925,005 | 279,686 | | | 2/1/2019 | 875,025 | 503,873 | | Scott A. Stengel | 1/28/2020 | 587,502 | 177,638 | | | 2/1/2019 | 550,017 | 316,721 |
Summary Compensation Table
| (i) The amounts in this column reflect the aggregate grant date fair value of the PSU awards granted in 2019 and 2020, calculated in accordance with FASB ASC Topic 718. |
Summary Compensation Table
| (ii) The amounts in this column reflect the incremental fair value related of the PSU awards granted in 2019 and 2020 resulting from the conversion of them to cash settled in 2021, calculated in accordance with FASB ASC Topic 718. Additional PSUs were not granted to the NEOs in connection with the modification of these awards. |
Summary Compensation Table
(e) This column includes the incremental cost of certain perquisites and other personal benefits provided to the NEOs. For 2023, these amounts include:
Summary Compensation Table
| | Jeffrey J. Brown | Russell E. Hutchinson | Douglas R. Timmerman | Diane E. Morais | Jason E. Schugel | Bradley J. Brown | Scott A. Stengel | | Financial counseling(a) | $10,000 | $— | $10,000 | $— | $— | $10,000 | $10,000 | | Executive Physical(b) | 2,456 | 2,456 | 2,456 | 2,456 | 2,456 | 2,456 | 2,456 | | Liability insurance(c) | 871 | 436 | 871 | 871 | 871 | 871 | 871 | | Relocation(d) | — | 139,547 | — | — | — | — | — | | Other(e) | 665 | — | — | — | — | — | — | | Total perquisites | 13,992 | 142,439 | 13,327 | 3,327 | 3,327 | 13,327 | 13,327 | | College Save Up Program(f) | 1,200 | — | 1,200 | — | — | — | 1,200 | | Life insurance(g) | 5,403 | 1,004 | 11,663 | 7,520 | 3,450 | 5,775 | 3,471 | | 401(k) matching contribution(h) | 33,000 | 11,538 | 33,000 | 33,000 | 33,000 | 33,000 | 26,400 | | Signing Bonus(i) | — | 1,000,000 | — | — | — | — | — | | Total All Other Compensation | $53,595 | $1,154,982 | $59,190 | $43,847 | $39,777 | $52,102 | $44,398 |
Summary Compensation Table
(a) We generally provide a modest taxable allowance to certain senior executives for financial counseling, tax preparation, and estate-planning services. Costs associated with this benefit are reflected in the table above, based on the actual charge for the services received. Any taxes assessed on the imputed income for the value of this service are the responsibility of the executive.
Summary Compensation Table
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Summary Compensation Table
(b) Represents the value of a comprehensive executive physical examination with Company-approved providers. (c) We provide a taxable allowance for personal-umbrella liability insurance for certain executives. Any taxes assessed on the imputed income for the value of this service are the responsibility of the executive. (d) The total amount disclosed for Mr. Hutchinson is related to his location change to Charlotte, North Carolina. Relocation assistance and associated relocation tax benefits are consistent with our standard relocation program. (e) Represents use of a Company-provided car service for the CEO and other non-cash Ally branded items. (f) Represents the employer contribution to a designated 529 Plan. (g) Represents the tax value of life insurance for 2023 that was provided by the Company. (h) Represents the employer contribution, Company match contribution, and discretionary contribution made to each NEO’s account under the Ally 401(k) plan. (i) Mr. Hutchinson received a one-time cash award of $1,000,000 in connection with his hiring as our Chief Financial Officer.
Summary Compensation Table
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Grants of Plan-based Awards in 2023
Grants of Plan-based Awards in 2023 The following table provides information on grants of plan-based awards made to our NEOs during 2023 under the ICP.
Grants of Plan-based Awards in 2023
| Name | Award | Grant Date | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares or Unit of Stock (#)(b) | Grant Date Fair Value of Stock or Unit Awards ($)(c) | | Jeffrey J. Brown(d) | RSU | 1/27/2023 | | | | 123,145 | 3,981,278 | | | RSU | 1/27/2023 | | | | 100 | 3,233 | | | PSU(a) | 1/27/2023 | 30,786 | 123,145 | 221,661 | — | 3,981,278 | | Russell E. Hutchinson | RSU | 10/20/2023 | | | | 72,766 | 1,750,022 | | | RSU | 7/21/2023 | | | | 87,109 | 2,500,028 | | Douglas R. Timmerman(d) | RSU | 10/20/2023 | | | | 332,641 | 8,000,016 | | | RSU | 1/27/2023 | | | | 41,757 | 1,350,004 | | | RSU | 1/27/2023 | | | | 100 | 3,233 | | | PSU(a) | 1/27/2023 | 10,439 | 41,757 | 75,163 | — | 1,350,004 | | Diane E. Morais(d) | RSU | 1/27/2023 | | | | 36,190 | 1,170,023 | | | RSU | 1/27/2023 | | | | 100 | 3,233 | | | PSU(a) | 1/27/2023 | 9,048 | 36,190 | 65,142 | — | 1,170,023 | | Jason E. Schugel(d) | RSU | 10/20/2023 | | | | 31,186 | 750,023 | | | RSU | 1/27/2023 | | | | 17,631 | 570,010 | | | RSU | 1/27/2023 | | | | 100 | 3,233 | | | PSU(a) | 1/27/2023 | 2,939 | 11,754 | 21,715 | — | 380,007 | | Bradley J. Brown(d) | RSU | 10/20/2023 | | | | 41,581 | 1,000,023 | | | RSU | 4/21/2023 | | | | 29,003 | 750,018 | | | RSU | 1/27/2023 | | | | 18,095 | 585,011 | | | RSU | 1/27/2023 | | | | 100 | 3,233 | | | PSU(a) | 1/27/2023 | 3,016 | 12,064 | 21,715 | — | 390,029 | | Scott A. Stengel | RSU | 10/20/2023 | | | | 103,951 | 2,500,022 | | | RSU | 1/27/2023 | | | | 19,487 | 630,015 | | | RSU | 1/27/2023 | | | | 100 | 3,233 | | | PSU(a) | 1/27/2023 | 4,872 | 19,487 | 35,077 | — | 630,015 |
Grants of Plan-based Awards in 2023
(a) These amounts reflect the cash-settled PSUs (for NEOs other than Mr. Schugel and Mr. B. Brown), and stock-settled PSUs (for Mr. Schugel and Mr. B. Brown) granted to the NEOs in 2023, which are scheduled to vest between 0% and 180% of the number of shares shown in the “Target” sub-column based on attainment of both a service condition that will lapse on the third anniversary of the date of grant and the achievement of the applicable Core ROTCE during the performance period commencing on January 1, 2023 and ending on December 31, 2025. The amounts in the “Threshold” sub-column reflect 25% of the shares shown in the “Target” sub-column that will vest on attainment of the service condition and the threshold performance level. If either the service condition or the threshold performance level is not attained, the cash-settled PSUs (for NEOs other than Mr. Schugel and Mr. B. Brown) and stock-settled PSUs (for Mr. Schugel and Mr. B. Brown) will be forfeited. The amounts in the “Target” sub-column reflect 100% of the shares that will vest on attainment of the service condition and the target performance level. The amounts in the “Maximum” sub-column reflect 180% of the shares that will vest on attainment of the service condition and the maximum performance level. For more information on the terms of these awards, see Compensation Discussion and Analysis—2023 Performance Results and Compensation Decisions—Summary of Outstanding PSUs earlier in this proxy statement.
Grants of Plan-based Awards in 2023
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Grants of Plan-based Awards in 2023
(b) The amounts in this column represent the number of shares of Ally common stock underlying the award of RSUs granted to the NEOs in 2023. In January 2023, we awarded our employees with 100 RSUs (subject to a three-year cliff vesting schedule) in recognition of our notable accomplishments and to support a founder’s mentality. The remaining RSUs granted in conjunction with our routine compensation decisions are scheduled to vest in equal installments on each of the first three anniversaries of the date of grant, based solely on service. (c) The amounts in this column reflect the aggregate grant date fair values of the awards, calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures and, for PSUs, based on the probable outcome of the applicable Core ROTCE as of the grant date. The grant date fair value amounts shown do not reflect realized cash compensation by the NEOs. The actual value, if any, realized by each NEO for these awards is a function of the value of the shares if and when these awards vest. For the value of the cash-settled PSUs (for NEOs other than Mr. Schugel and Mr. B. Brown) and stock-settled PSUs (for Mr. Schugel and Mr. B. Brown), assuming attainment of the Core ROTCE and TSV performance metrics at the maximum level of performance, see footnote c to the Summary Compensation Table above. For additional information on how we account for long-term incentive compensation, see Note 23 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. (d) RSUs for Mr. J. Brown, Mr. Timmerman, Ms. Morais, Mr. Schugel, and Mr. B. Brown, excluding the grant of 100 RSUs on January 27, 2023, are nonforfeitable since they have attained retirement eligibility pursuant to the terms of the awards.
Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End The following table provides information regarding the outstanding equity awards held by the NEOs as of December 31, 2023(e).
Outstanding Equity Awards at 2023 Fiscal Year End
| Name | Grant date | Number of Shares or Units of Stock That Have Not Vested (#)(a) | Market Value of Shares or Units of Stock That Have Not Vested ($)(b) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(c) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(b) | | Jeffrey J. Brown(d) | 1/27/2023 | | | 123,145 | 4,300,223 | | | 1/27/2023 | 100 | 3,492 | | | | | 1/27/2023 | 118,168 | 4,126,427 | | | | | 1/28/2022 | | | 97,285 | 3,397,192 | | | 1/28/2022 | 100 | 3,492 | | | | | 1/28/2022 | 64,857 | 2,264,806 | | | | | 1/28/2021 | 66,374 | 2,317,789 | | | | | 1/28/2021 | 100 | 3,492 | | | | | 1/28/2021 | 29,501 | 1,030,175 | | | | Russell E. Hutchinson | 10/20/2023 | 72,766 | 2,540,989 | | | | | 7/21/2023 | 87,109 | 3,041,846 | | | | Douglas R. Timmerman(d) | 10/20/2023 | 332,641 | 11,615,824 | | | | | 1/27/2023 | | | 41,757 | 1,458,154 | | | 1/27/2023 | 100 | 3,492 | | | | | 1/27/2023 | 40,042 | 1,398,267 | | | | | 1/28/2022 | | | 29,827 | 1,041,559 | | | 1/28/2022 | 100 | 3,492 | | | | | 1/28/2022 | 19,885 | 694,384 | | | | | 1/28/2021 | 18,673 | 652,052 | | | | | 1/28/2021 | 100 | 3,492 | | | | | 1/28/2021 | 8,299 | 289,801 | | |
Outstanding Equity Awards at 2023 Fiscal Year End
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Outstanding Equity Awards at 2023 Fiscal Year End
| Name | Grant date | Number of Shares or Units of Stock That Have Not Vested (#)(a) | Market Value of Shares or Units of Stock That Have Not Vested ($)(b) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(c) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(b) | | Diane E. Morais(d) | 1/27/2023 | | | 36,190 | 1,263,755 | | | 1/27/2023 | 100 | 3,492 | | | | | 1/27/2023 | 34,727 | 1,212,667 | | | | | 1/28/2022 | | | 28,865 | 1,007,966 | | | 1/28/2022 | 100 | 3,492 | | | | | 1/28/2022 | 19,244 | 672,000 | | | | | 1/28/2021 | 18,089 | 631,677 | | | | | 1/28/2021 | 100 | 3,492 | | | | | 1/28/2021 | 8,041 | 280,792 | | | | Jason E. Schugel(d) | 10/20/2023 | 31,186 | 1,089,015 | | | | | 1/27/2023 | | | 11,754 | 410,450 | | | 1/27/2023 | 100 | 3,492 | | | | | 1/27/2023 | 16,918 | 590,777 | | | | | 1/28/2022 | | | 8,981 | 313,617 | | | 1/28/2022 | 100 | 3,492 | | | | | 1/28/2022 | 8,981 | 313,617 | | | | | 1/28/2021 | 5,525 | 192,916 | | | | | 1/28/2021 | 100 | 3,492 | | | | | 1/28/2021 | 3,684 | 128,645 | | | | Bradley J. Brown(d) | 10/20/2023 | 41,581 | 1,452,009 | | | | | 4/21/2023 | 29,003 | 1,012,785 | | | | | 1/27/2023 | | | 12,064 | 421,275 | | | 1/27/2023 | 100 | 3,492 | | | | | 1/27/2023 | 17,363 | 606,316 | | | | | 1/28/2022 | | | 7,270 | 253,868 | | | 1/28/2022 | 100 | 3,492 | | | | | 1/28/2022 | 7,270 | 253,868 | | | | | 1/28/2021 | 4,937 | 172,383 | | | | | 1/28/2021 | 100 | 3,492 | | | | | 1/28/2021 | 3,291 | 114,922 | | |
Outstanding Equity Awards at 2023 Fiscal Year End
(a) The amounts reflected in this column represent the number of shares of Ally common stock underlying (i) the RSUs granted to the NEOs in 2021, 2022, and 2023 that are scheduled to vest over three years from the date of grant, in each case, based solely on service, (ii) the cash-settled PSUs (for NEOs other than Mr. B. Brown) and stock-settled PSUs (for Mr. B. Brown) granted to the NEOs in 2021 (reflected based on actual achievement of 100% for the performance period that ended on December 31, 2023), and (iii) the 100 RSUs granted to employees in 2021, 2022, and 2023 in recognition of our notable accomplishments and to support a founder’s mentality. (b) The market values of the awards were calculated by multiplying the number of shares underlying the awards by $34.92, which was the closing price of Ally’s common stock on December 31, 2023. (c) The amounts reflected in this column represent the number of shares of Ally common stock underlying the cash-settled PSUs (for NEOs other than Mr. B. Brown), and stock-settled PSUs (for Mr. B. Brown) granted to the NEOs in 2021 and 2022 (with a performance period that is scheduled to end on December 31, 2023 and December 31, 2024) and a service period that is scheduled to end on the third anniversary of the date of grant, assuming attainment of the performance metrics at the target performance level. The actual number of Ally shares, if any, that will vest will be based on (i) the level of achievement of the Core ROTCE and TSV performance goals as of the end of the performance period and (ii) satisfaction of the applicable service condition. For more information on the terms of these awards, see Compensation Discussion and Analysis—Ally’s Executive Compensation Program earlier in this proxy statement.
Outstanding Equity Awards at 2023 Fiscal Year End
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Outstanding Equity Awards at 2023 Fiscal Year End
(d) All RSU and PSU awards reflected for Mr. J. Brown, Mr. Timmerman, Ms. Morais, Mr. Schugel, and Mr. B. Brown, excluding the grants of 100 RSUs in 2021, 2022, and 2023, as well as the grants described under 2023 Executive Transition and Business Continuity Awards within the CD&A, are nonforfeitable as these grants have attained retirement eligibility pursuant to the terms of the awards. (e) Mr. Stengel did not have any outstanding awards as of December 31, 2023.
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023 The following table provides information on the NEOs’ equity awards that vested in 2023. The NEOs do not hold any options.
Option Exercises and Stock Vested in 2023
| Name | Number of Shares Acquired on Vesting (#)(a) | Value Realized on Vesting ($)(b) | | Jeffrey J. Brown | 202,963 | 6,561,794 | | Russell E. Hutchinson | — | — | | Douglas R. Timmerman | 57,012 | 1,843,198 | | Diane E. Morais | 55,434 | 1,792,181 | | Jason E. Schugel | 26,624 | 860,754 | | Bradley J. Brown | 24,064 | 777,989 | | Scott A. Stengel | 34,398 | 1,112,087 |
Option Exercises and Stock Vested in 2023
(a) All amounts exclude those shares becoming nonforfeitable vesting solely due to retirement eligibility (b) The value realized on vesting of the equity was calculated by multiplying the number of shares of Ally common stock underlying awards that vested in 2023 by the closing price on the vesting date. The closing price was $32.33 for shares vesting on January 28, 2023.
Nonqualified Deferred Compensation in 2023
Nonqualified Deferred Compensation in 2023 Our benefit program includes the tax-qualified Ally Financial Inc. Retirement Savings Plan (Savings Plan). We provide the Savings Plan to support our employees in saving for retirement in a manner that is favorable from a tax perspective. Eligible compensation under the Savings Plan is composed of salary and certain cash bonuses. Under the Savings Plan, after one year of employment, employee contributions up to 6% of eligible compensation are matched 100% by Ally, and this matched amount vests in full immediately. Effective the first of the month following 30 days of employment, the Savings Plan also provides for a 2% nonmatching contribution on eligible compensation, posted each pay cycle, and an additional annual discretionary nonmatching contribution on eligible base pay of up to 2%, which is subject to the Company’s performance. Nonmatching contributions fully vest after the individual has been employed for three years. Ally also maintains the Enhanced Retirement Savings Plan, which is a nonqualified benefit equalization plan for highly compensated employees. This plan was designed to allow for the equalization of benefits for highly compensated employees when such employees’ qualified plan benefits were limited by the Employee Retirement Income Security Act of 1974, as amended by the Code. Ally suspended nonqualified contributions to this plan in 2009 and has not made any since that time, including in 2023. Certain NEOs maintain balances within the plan. This plan is maintained as an unfunded plan, and all expenses for administration of the plan and payment of amounts to participants are borne by Ally.
Nonqualified Deferred Compensation in 2023
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Nonqualified Deferred Compensation in 2023
The table below reflects year-end balances, Company distributions, and all earnings associated primarily with the Ally nonqualified equalization plan.
Nonqualified Deferred Compensation in 2023
| Name | Plan name (a) | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | | Jeffrey J. Brown | Nonqualified Benefit Equalization Plan | — | — | 10,296 | — | 64,918 | | Russell E. Hutchinson | Nonqualified Benefit Equalization Plan | — | — | — | — | — | | Douglas R. Timmerman | Nonqualified Benefit Equalization Plan | — | — | 32,647 | — | 182,256 | | Diane E. Morais | Nonqualified Benefit Equalization Plan | — | — | 3,807 | — | 21,034 | | Jason E. Schugel | Nonqualified Benefit Equalization Plan | — | — | — | — | — | | Bradley J. Brown | Nonqualified Benefit Equalization Plan | — | — | — | — | — | | Scott A. Stengel | Nonqualified Benefit Equalization Plan | — | — | — | — | — |
Nonqualified Deferred Compensation in 2023
(a) The amounts reflect employee balances in the nonqualified Enhanced Retirement Savings Plan. Each participant is credited with earnings based on a set of investment options selected by the participant that are similar to 401(k) investment options available to all employees, but employer contributions to this plan have not been made since 2009.
Potential Payments Upon a Termination
Potential Payments Upon a Termination
Annual PSUs
| Jeffrey J. Brown, Former Chief Executive Officer | | | | | Executive Benefits and Payments Upon Termination | Termination Without Cause or Qualifying Termination ($) | Termination Following a Change in Control ($) | Death/Disability ($) | | Base Salary(a) | $2,000,000 | $2,000,000 | $— | | Annual Incentive(b) | — | 8,750,000 | — | | Long-Term Incentives(c) | 10,476 | 10,476 | 10,476 | | Outplacement(d) | 20,000 | 20,000 | — | | Total | $2,030,476 | $10,780,476 | $10,476 |
Annual PSUs
| Russell E. Hutchinson, Chief Financial Officer | | | | | Executive Benefits and Payments Upon Termination | Termination Without Cause or Qualifying Termination ($) | Termination Following a Change in Control ($) | Death/Disability ($) | | Base Salary(a) | $750,000 | $1,500,000 | $— | | Annual Incentive(b) | — | 3,600,000 | — | | Long-Term Incentives(c) | 5,582,835 | 5,582,835 | 5,582,835 | | Outplacement(d) | 20,000 | 20,000 | — | | Total | $6,352,835 | $10,702,835 | $5,582,835 |
Annual PSUs
| Douglas R. Timmerman, Interim Chief Executive Officer and President, Dealer Financial Services | | | | | Executive Benefits and Payments Upon Termination | Termination Without Cause or Qualifying Termination ($) | Termination Following a Change in Control ($) | Death/Disability ($) | | Base Salary(a) | $750,000 | $1,500,000 | $— | | Annual Incentive(b) | — | 3,160,000 | — | | Long-Term Incentives(c) | 11,626,300 | 11,626,300 | 11,626,300 | | Outplacement(d) | 20,000 | 20,000 | — | | Total | $12,396,300 | $16,306,300 | $11,626,300 |
Annual PSUs
| Diane E. Morais, President, Consumer & Commercial Banking | | | | | Executive Benefits and Payments Upon Termination | Termination Without Cause or Qualifying Termination ($) | Termination Following a Change in Control ($) | Death/Disability ($) | | Base Salary(a) | $750,000 | $1,500,000 | $— | | Annual Incentive(b) | — | 3,000,000 | — | | Long-Term Incentives(c) | 10,476 | 10,476 | 10,476 | | Outplacement(d) | 20,000 | 20,000 | — | | Total | $780,476 | $4,530,476 | $10,476 |
Annual PSUs
| Jason E. Schugel, Chief Risk Officer | | | | | Executive Benefits and Payments Upon Termination | Termination Without Cause or Qualifying Termination ($) | Termination Following a Change in Control ($) | Death/Disability ($) | | Base Salary(a) | $650,000 | $1,300,000 | $— | | Annual Incentive(b) | — | 1,850,000 | — | | Long-Term Incentives(c) | 1,099,491 | 1,099,491 | 1,099,491 | | Outplacement(d) | 20,000 | 20,000 | — | | Total | $1,769,491 | $4,269,491 | $1,099,491 |
Annual PSUs
| Bradley J, Brown, Former Interim Chief Financial Officer and Current Corporate Treasurer | | | | | Executive Benefits and Payments Upon Termination | Termination Without Cause or Qualifying Termination ($) | Termination Following a Change in Control ($) | Death/Disability ($) | | Base Salary(a) | $600,000 | $1,200,000 | $— | | Annual Incentive(b) | — | 1,450,000 | — | | Long-Term Incentives(c) | 2,475,269 | 2,475,269 | 2,475,269 | | Outplacement(d) | 20,000 | 20,000 | — | | Total | $3,095,269 | $5,145,269 | $2,475,269 |
Pay Ratio
Pay Ratio The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and SEC Regulation S-K require a public company to disclose the annual total compensation of its Principal Executive Officer (PEO), the median of the annual total compensation of all employees of the company excluding the PEO, and the ratio of those two amounts. Median-Employee Determination A list of all 11,141 employees as of December 31, 2023, was prepared. Our 52 international employees (51 in Canada and one in Belgium) and the PEO were excluded, resulting in 11,088 total employees. To determine our median employee from this adjusted employee population, we used base salary plus 2023 target incentive opportunity. Base salaries and target incentive opportunities were annualized for permanent employees who were not employed by us for all of 2023. 2023 Pay Ratio Calculation We determined our median employee’s annual total compensation for 2023 utilizing the same methodology that is used in determining the total compensation of our NEOs as set forth in the 2023 Summary Compensation Table earlier in this proxy statement. Mr. J. Brown’s compensation for 2023 was $13,394,384, which is approximately 119 times our median employee’s 2023 annual total compensation of $113,007. The Company believes that the foregoing ratio is a reasonable estimate determined in accordance with SEC rules. Please note that SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and assumptions, and as result, the pay ratio reported by us may not be comparable to pay ratios reported by other companies.
Pay Ratio
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Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (as defined by SEC rules) (
SCT
| | | | Average Compensation Summary Table Total for Non-PEO Named Executive Officers (a) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (b) | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO (a) | Compensation Actually Paid to PEO (b) | | | Total Stockholder Return ($) (c) | Peer Group Total Stockholder Return ($) (d) | Net Income ($ in billions) (e) | Core ROTCE (f) | | 2023 | 13,394,384 | 18,920,463 | 6,163,491 | 8,414,382 | 130 | 133 | 1.0 | 11.5% | | 2022 | 14,439,223 | 4,257,400 | 4,163,136 | 1,912,795 | 87 | 118 | 1.7 | 20.5% | | 2021 | 15,545,746 | 21,790,378 | 4,555,956 | 6,064,788 | 164 | 132 | 3.1 | 24.3% | | 2020 | 11,622,074 | 15,378,775 | 3,386,884 | 4,217,807 | 121 | 98 | 1.1 | 9.1% |