Michael Rhodes
About Michael Rhodes
Michael G. Rhodes is the CEO of Ally Financial Inc. and a member of the Board since April 29, 2024; he is 59 years old, holds an MBA from Wharton and a BS in Engineering from Duke, and has 30+ years in financial services with senior roles at Discover, TD Bank, Bank of America, and MBNA . Ally structured his CEO pay heavily toward long-term equity to align with shareholders (70% equity, 60% PSUs/40% RSUs), with 2024 total compensation of $20,940,509 driven by $16.2M make-whole equity and a $3.087M cash bonus, plus $900,000 sign-on cash subject to a 12-month clawback on resignation-for-cause terms .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Discover Financial Services / Discover Bank | CEO & President; Director | Not disclosed (most recent prior to Ally) | Led consumer financial services; board service at Discover entities |
| TD Bank Group | Group Head, Innovation, Technology & Shared Services | 2017–2021 | Drove transformative digital, data, and technology innovations |
| TD Bank Group | Led Canadian Personal Banking | 2022–2023 | Executed strategies for market share gains and financial goals |
| TD Bank Group | Head, North American Credit Card & Merchant Services | 2011 onward | Commercial partner solutions; risk/technology depth |
| Bank of America; MBNA America Bank | Leadership roles | Not disclosed | Retail banking, risk management, technology experience |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Discover Financial Services; Discover Bank | Director | Not disclosed (prior to Ally) | Served on boards while CEO/President |
| Other public-company boards | None currently | N/A | 2024 proxy lists no other public boards for Rhodes |
Fixed Compensation
| Component | 2024 Amount | Structure / Notes |
|---|---|---|
| Base Salary | $634,615 | Initial annual base salary set at $1,000,000 (pro-rated for 2024) |
| Target Annual Incentive Opportunity | $10,500,000 | 30% cash ($3,150,000 target) and 70% equity; equity split 60% PSUs / 40% RSUs |
| Actual Cash Bonus Paid (for 2024, paid Feb 2025) | $3,087,000 | Based on CNGC assessment of Company and individual performance |
| All Other Compensation | $1,018,832 | Includes relocation ($84,048), financial counseling ($10,000), executive physical ($2,434), liability insurance ($1,071), car service/other ($900), life insurance ($6,579), 401(k) match ($13,800), $900,000 make‑whole cash award |
Shareholder feedback drove a heavier long-term equity mix for the incoming CEO versus the former CEO (70% equity vs 65%, and 60% PSUs vs 50%) .
Performance Compensation
| Award Type | Metric(s) | Weighting | Grant Date | Target / Range | Vesting / Performance Period | Settlement |
|---|---|---|---|---|---|---|
| PSUs (cash-settled) | Core ROTCE (ex-OCI), with relative TSR modifier | 60% of equity incentive | 4/29/2024 | Target 107,253 units; 0%–180% payout range (Threshold 26,813; Max 193,055) | Service condition lapses on 3rd anniversary; performance period 1/1/2024–12/31/2026; dividends accrue and pay at settlement based on earned units | Settles in cash |
| RSUs (stock-settled) | Time-based service only | 40% of equity incentive | 4/29/2024 | 306,436 shares; Grant Date FV $12,000,034 | Vests one-third on each of 12/11/2024, 12/11/2025, 12/11/2026, subject to continued employment | Shares of Ally common stock |
Equity Ownership & Alignment
| Category | Amount | Notes |
|---|---|---|
| Beneficially Owned Common Shares (as of 3/13/2025) | 83,164 | Less than 1% of outstanding; directors/officers group <1% |
| RSUs Outstanding (stock-settled) | 278,055 | Included in total holdings table (not beneficial ownership) |
| PSUs Outstanding (cash-settled, at target) | 217,899 | Cash-settled; number assumes target achievement |
| Total Units + Shares (incl. RSUs/PSUs) | 579,118 | Implied value $19,105,103 at $32.99 close on 3/13/2025 |
| Anti-Hedging / Anti-Pledging | Prohibited (hedges, derivatives, short sales, pledging, certain limit orders) | Exceptions eliminated per 2024 stockholder feedback |
| Stock Ownership Guidelines | Minimum levels apply; if below, must retain 50% of net shares from grants until compliance; counts 100% owned shares, 50% unvested RSUs, 50% earned unvested PSUs that settle in shares |
Employment Terms
| Term | Detail |
|---|---|
| Start Date | April 29, 2024 |
| Employment Type | At-will; no executive employment agreement |
| Severance | Eligible under Ally Severance Plan; if terminated without cause within 12 months after start, and absent a change in control, lump-sum equal to 2x current base salary (to the extent the Severance Plan does not provide it), subject to release |
| Indemnification & D&O Insurance | Indemnification per certificate/bylaws and applicable law; D&O coverage on terms no less favorable than other senior executives/directors |
| Primary Office | 601 S. Tryon St., Charlotte, NC 28202 |
| Perquisites & Benefits | Executive physical; financial/tax/estate planning up to $10,000; personal umbrella liability insurance $5M; car service (non-commute); access to corporate aircraft for business-related travel; relocation assistance |
| Sign‑On / Make‑Whole | $900,000 cash (repayable if terminated for cause or voluntary resignation within 12 months); $16.2M equity make‑whole ($4.2M PSUs; $12M RSUs vesting on 12/11/2024, 12/11/2025, 12/11/2026) |
Board Governance
- Director since 2024; not independent (serves as CEO). No committee assignments; all Board committee members are independent. Independent Chair; executive sessions held regularly .
- Board size 10 (all up for annual election); no director attended less than 75% of Board/committee meetings in 2024 .
- Committee meeting counts in 2024: Audit 9, Risk 6, Technology 5, CNGC 7 .
Compensation Structure Analysis
- Equity-heavy orientation for incoming CEO reflects shareholder feedback; increased performance-based weighting (60% PSUs vs 50% for former CEO) .
- PSUs use a three-year cumulative performance framework anchored in Core ROTCE with a relative TSR modifier; payout range widened to as high as 180% for 2024 grants, reinforcing long-term alignment and risk-aware performance .
- Anti-hedging/anti-pledging restrictions with no exceptions reduce misalignment and leverage risk; directors and executives subject to strict personal trading controls .
- Peer benchmarking retained with updates after bank failures; compensation compared to peer median but adjusted for role-criticality, performance, and retention needs .
Say-on-Pay & Shareholder Feedback
- The CNGC engaged and responded to “low support” for the prior year’s say-on-pay by increasing long-term equity weighting and revising anti-hedging/pledging policies to remove exceptions .
Performance Compensation Detail
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Core ROTCE (ex-OCI) + Relative TSR modifier (PSUs) | Not separately disclosed; PSUs = 60% of equity | PSU target 107,253 units; payout 0%–180% | In progress (2024–2026) | TBD at performance end; dividends accrue to settlement | Service condition lapses at 3rd anniversary; performance period 1/1/2024–12/31/2026 |
| RSUs (service only) | RSUs = 40% of equity | 306,436 shares | N/A (time-based) | N/A (time-based) | 1/3 on 12/11/2024, 12/11/2025, 12/11/2026 |
Director Compensation (as applicable to CEO-director)
- As CEO, Rhodes does not receive standalone non-employee director retainers; committee roles are reserved for independent directors .
Risk Indicators & Red Flags
- Pledging and hedging prohibited; short sales and most limit orders prohibited—reduces alignment concerns .
- Large unvested equity (RSUs/PSUs) with scheduled vesting creates calendar-linked supply events; cash-settled PSUs mitigate sell pressure on vesting .
- Severance protection limited to 2x base in a narrow 12-month window absent CIC; broader CIC economics not disclosed in provided documents .
Compensation Peer Group (Benchmarking)
- CNGC maintained 2024 peer group with removals of dissolved/acquired banks (First Republic, Signature, SVB) and compares total compensation around peer median, adjusting for performance, retention, and role criticality .
Equity Ownership & Beneficial Ownership Breakdown
| Date | Common Shares Beneficially Owned | Stock-Settled Units | RSUs (stock) | PSUs (cash, at target) | Total Units + Shares | Implied Value |
|---|---|---|---|---|---|---|
| 3/13/2025 | 83,164 | — | 278,055 | 217,899 | 579,118 | $19,105,103 at $32.99 |
Employment & Contract Economics Summary
| Provision | Term |
|---|---|
| Change-of-Control | Not specifically disclosed for Rhodes in provided documents; Severance Plan eligibility noted |
| Severance (No CIC) | If terminated without cause within 12 months post‑start, lump sum 2x base salary to the extent Severance Plan doesn’t provide it; subject to release |
| Clawbacks | Not specifically disclosed beyond repayment term on $900k sign‑on for certain termination/resignation conditions |
| Non-Compete/Non-Solicit | Not disclosed in provided documents |
| Garden Leave/Consulting | Not disclosed in provided documents |
Board Service History and Dual-Role Implications
- Board service: Director since 2024; not independent as CEO; no committee roles for CEO; Board chaired by Independent Chair (Franklin W. Hobbs). Executive sessions and independent committees mitigate dual-role concerns; all committee members are independent .
- Attendance: Board reports no director attended less than 75% of meetings in 2024; committee meeting counts disclosed .
Investment Implications
- Alignment: Heavy long-term, performance-based equity (PSUs) and strict anti-hedging/pledging improve pay-for-performance alignment and reduce leverage/hedging risks .
- Supply dynamics: RSU tranches vest each December through 2026, potentially creating tax withholding-related selling; PSU cash settlement reduces direct share supply impact .
- Retention risk: Meaningful make‑whole equity ($16.2M) and sign‑on cash ($900k) with service/repayment conditions, plus relocation and benefits, suggest strong near-term retention; severance protection is modest and time-limited absent CIC .
- Performance levers: PSU metrics tied to Core ROTCE with a TSR overlay incentivize capital discipline and shareholder returns; payout up to 180% can amplify compensation variability tied to execution .
- Governance: Independent chair, independent committees, and improved policies post low say-on-pay feedback support governance quality; CEO not on committees mitigates dual-role influence .