Kathleen Patterson
Chief Human Resources and Corporate Citizenship Officer at ALLY
Executive
About Kathleen Patterson
Chief Human Resources and Corporate Citizenship Officer (NEO) at Ally Financial. 2024 incentive design for non-CEO NEOs (including CHRO) is 40% annual cash and 60% long‑term equity, split 50% PSUs and 50% RSUs, aligning pay with multi‑year results and risk management . Company performance context for 2024: Adjusted EPS $2.35 and Core ROTCE 8.5% amid rate volatility and inflation; deposit customers reached 3.3 million; Corporate Finance delivered record core pre‑tax income of $433M with 37% ROE . Shareholder support for pay program remained strong, with 91% Say‑on‑Pay approval in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
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External Roles
| Organization | Role | Years | Committee/Focus |
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Fixed Compensation
| Year | Base Salary ($) | Target Incentive ($) | Actual Incentive ($) | % of Target | Incentive Mix (Cash/LTI; PSU/RSU) |
|---|---|---|---|---|---|
| 2023 | 600,000 | — | — | — | 40% cash / 60% LTI; LTI 50% PSUs, 50% RSUs (policy for non‑CEO NEOs) |
| 2024 | 650,000 | 1,900,000 | 1,800,000 | 96% | 40% cash / 60% LTI; LTI 50% PSUs, 50% RSUs |
| 2025 | 650,000 | 2,200,000 | — | — | 40% cash / 60% LTI; LTI 50% PSUs, 50% RSUs |
Notes:
- Summary Compensation (FY2024): Salary $600,000; Bonus $730,000; Stock Awards $903,821; All Other Compensation $52,809; Total $2,286,630 .
- Perquisites (FY2024 included in “All Other”): Financial counseling $10,000; Executive physical $2,434; Liability insurance $1,601; Life insurance $621; 401(k) match/discretionary $27,600; College Save Up $200; total perqs $14,035 .
Performance Compensation
- Incentive framework (scorecard): Five pillars (Financial Metrics, Business Indicators, Risk Management, Consumer, Cultural). Heavier weighting on financial metrics/business indicators; NEO awards capped at 200% of target .
- 2024 outcomes: Below target overall due to financial metrics at low end of target ranges; at‑target on business indicators; above‑target on risk, consumer, and cultural pillars; incentive pool funded below target .
PSUs design and metrics:
- 2024 grants: Cash‑settled PSUs; 3‑year performance period (1/1/2024–12/31/2026); payout 0–180% based on Core ROTCE; service condition 3 years .
- 2025 PSUs: Metrics are Core ROTCE (ex‑OCI) with a relative TSR performance modifier vs peer group .
Detailed 2024 awards granted (grant date 1/26/2024):
| Award Type | Shares/Units | Grant Date Fair Value ($) | Vesting | Metric/Notes |
|---|---|---|---|---|
| RSU | 14,355 | 540,035 | 1/3 annually over 3 years (service only) | Settles in shares |
| RSU (broad‑based) | 100 | 3,762 | 3‑year cliff | Settles in shares |
| PSU (Target) | 9,570 | 360,023 | After 3‑year performance + service | Cash‑settled; Core ROTCE (0–180%) |
Vesting activity (2024):
- Shares acquired on vesting: 15,511; value realized $581,903 .
Equity Ownership & Alignment
Beneficial ownership (as of March 13, 2025):
| Component | Amount |
|---|---|
| Shares of Common Stock Beneficially Owned | 10,338 |
| Stock‑Settled Units (vested or vesting within 60 days) | 30,238 |
| Total Beneficial Ownership (SEC definition) | 40,576 |
| Ownership as % of Shares Outstanding | Each NEO owns <1% |
Outstanding equity awards (12/31/2024):
| Grant Date | Instrument | Quantity (#) | Market/Pay Value ($) | Notes |
|---|---|---|---|---|
| 1/26/2024 | RSU | 13,874 | 499,603 | 1/3 annual vesting |
| 1/26/2024 | PSU (Target) | 9,570 | 344,616 | Cash‑settled; 3‑yr performance |
| 1/26/2024 | RSU (broad‑based) | 100 | 3,601 | 3‑yr cliff |
| 10/20/2023 | RSU | 103,951 | 3,743,276 | Time‑based |
| 1/27/2023 | RSU | 13,301 | 478,969 | Time‑based |
| 1/27/2023 | PSU (Target) | 13,301 | 478,969 | Cash‑settled; service/perf |
| 1/28/2022 | RSU | 3,011 | 108,410 | Time‑based |
| 1/28/2022 | RSU | 4,704 | 169,391 | Time‑based |
| 1/28/2022 | RSU (broad‑based) | 100 | 3,601 | 3‑yr cliff |
Additional ownership/LTI context:
- Aggregate equity/award position (company table): RSUs 104,151; PSUs (target) 36,888; implied total award value $5,991,479 at $32.99 stock price; PSUs settle in cash; RSUs settle in shares .
- Stock ownership guidelines: Minimum ownership levels apply; if below guideline, executive must retain 50% of net shares from any equity grant since IPO until in compliance .
- Anti‑hedging/anti‑pledging: Hedging, short sales, and pledging (including margin accounts) are prohibited for NEOs and specified associates; also bans same‑day limit orders .
Employment Terms
- Employment agreements: None (NEOs are at‑will) .
- Severance framework: Eligible under Ally Financial Inc. Severance Plan .
- Clawbacks/recoupment: Company can recover vested/unvested compensation for financial restatements, misconduct, policy violations, risk outcomes; NYSE clawback policy (303A.14) effective Dec 1, 2023 .
- Potential payments (as of 12/31/2024):
| Scenario | Base Salary ($) | Annual Incentive ($) | Long‑Term Incentives ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|
| Termination Without Cause / Qualifying Termination | 650,000 | — | 3,754,079 | 20,000 | 4,424,079 |
| Termination Following a Change in Control | 1,300,000 | 1,520,000 | 3,754,079 | 20,000 | 6,594,079 |
| Death/Disability | — | — | 3,754,079 | — | 3,754,079 |
Notes:
- Many RSU/PSU awards for Ms. Patterson are nonforfeitable due to retirement eligibility; exceptions include the broad‑based 100 RSU grants and a 2023 retention award, which do not have retirement acceleration .
- No stock options outstanding for NEOs .
Compensation Structure Analysis
- Mix and leverage: Increased 2024 base salary (+8% YoY to $650k) and a higher 2025 target incentive ($2.2M vs $1.9M) lift at‑risk pay, with 60% of incentives in long‑term equity and 50% of LTI in PSUs, reinforcing multi‑year alignment and risk control .
- Performance linkage: 2024 incentive funded below target given financial results at low end of scorecard ranges; non‑financial pillars above target highlight strong human capital/consumer execution relevant to CHRO mandate .
- Award design: 2024 PSUs cash‑settled on Core ROTCE (0–180%); 2025 PSUs add relative TSR modifier, increasing external alignment while maintaining capital/risk discipline .
- Governance: Robust anti‑hedging/pledging, stock ownership retention if below guidelines, and broad clawback coverage reduce misalignment risks .
Investment Implications
- Alignment and overhang: Significant unvested time‑based RSUs (e.g., 103,951 from 10/20/2023; 13,874 from 1/26/2024) represent continued equity exposure; however, PSUs are cash‑settled, moderating incremental share overhang from performance awards .
- Vesting/flow dynamics: 2024 vesting of 15,511 shares (value $582k) and scheduled time‑based vesting over the next two years create modest, predictable supply; retirement eligibility makes many awards nonforfeitable, reducing retention “stickiness” but not accelerating delivery (time‑based vesting remains) .
- Pay‑for‑performance: 2024 payout at 96% of target and below‑target pool funding are consistent with financial outcomes; upward reset of 2025 target incentive may increase prospective LTI grants but scorecard and clawbacks constrain upside absent delivery .
- Risk controls and optics: No options, anti‑hedging/pledging, and comprehensive clawbacks reduce governance red flags; 91% Say‑on‑Pay support suggests low external pressure risk on comp for now .