David Dauch
AMERICAN AXLE & MANUFACTURING HOLDINGSAbout David Dauch
David C. Dauch, age 60, is Chairman of the Board (since Aug 2013) and Chief Executive Officer (since Sept 2012) of American Axle & Manufacturing (AAM), having joined AAM in 1995 and served in roles of increasing responsibility, including President & COO (2008–2012) and President & CEO (2012–2015) . Under his leadership, AAM reported 2024 sales of $6.1B, Adjusted EBITDA of $749M (12.2% margin), operating cash flow of $455M, and reduced senior debt by ~$130M, with incentives aligned to EBITDA margin, operational cash flow, sustainability, and multi‑year free cash flow targets with a TSR modifier . Shareholders supported say‑on‑pay at 94% in 2024 after the Compensation Committee raised performance emphasis (60% performance LTI; 50% weighting on operational cash flow in AIP) and added a TSR modifier in LTI .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AAM | Chairman of the Board | 2013–present | Combined CEO/Chair role; agenda setting, strategic oversight; chairs Executive Committee . |
| AAM | Chief Executive Officer | 2012–present | Led deleveraging, cash‑flow focus, electrification portfolio; 2024: $6.1B sales, $749M Adj. EBITDA, $455M OCF . |
| AAM | President & CEO | 2012–2015 | Transitioned from COO; continued operational execution . |
| AAM | President & COO | 2008–2012 | Managed global operations through industry volatility . |
| AAM | Various roles | 1995–2008 | Built domain expertise across operations and strategy . |
External Roles
| Organization | Role | Years | Strategic Impact / Notes |
|---|---|---|---|
| REV Group, Inc. | Director | Since Oct 2024 | Public company board experience; industry adjacency . |
| Amerisure Companies | Director | Since 2014 | Insurance sector insights . |
| Horizon Global Corporation | Director | 2015–2018 | Automotive supplier governance experience . |
| Business Leaders for Michigan; Detroit Economic Club; Detroit Regional CEO Council; NAM; Miami University Business Advisory Council; Stellantis Supplier Advisory Council; Boy Scouts and community orgs | Various leadership roles | Ongoing | Regional economic, industry, and community leadership; network breadth . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,250,000 | 1,250,000 | 1,250,000 |
| Target Annual Bonus (% of salary) | 150% | 150% | 150% |
| Actual Annual Incentive Paid ($) | 5,569,500 total non‑equity (includes LTI cash) | 4,841,438 total non‑equity (includes LTI cash) | 2,193,750 AIP; 1,994,532 LTIP cash; 4,188,282 total non‑equity |
| All Other Compensation ($) | 1,048,001 | 892,871 | 472,089 |
| Notable Perquisites (2024) | — | — | $100,000 annual perquisite allowance; ERSP employer contribution $304,300; executive life insurance $23,235; spousal travel tax gross‑ups $2,632; 401(k) match $17,250 . |
Performance Compensation
- 2024 Annual Incentive Program (AIP): 90% financial, 10% sustainability; total payout 117% of target .
| Metric | Weight | Threshold | Target | Max | 2024 Actual | % of Target Earned | Weighted Payout |
|---|---|---|---|---|---|---|---|
| EBITDA Margin | 40% | 10.0% | 12.0% | 13.75% | 12.2% | 113% | 45% |
| Operational Cash Flow | 50% | $400M | $500M | $625M | $505M | 104% | 52% |
| Sustainability Objectives | 10% | — | — | — | Committee approved maximum (meaningful progress) | 200% (implied) | 20% |
| Total Payout | — | — | — | — | — | — | 117% |
- Long-Term Incentives (LTI) design (2024 grants):
- Mix: 60% performance-based (performance shares in stock and performance units in cash), 40% RSUs; performance metric is free cash flow (annual 2024/2025/2026 targets at 15% each; 3‑yr cumulative at 55%); TSR modifier ±15%; 3‑year performance period; RSUs cliff-vest at 3 years .
- 2024 free cash flow targets: 2024: $175M/$200M/$240M; 2025: $150M/$175M/$210M; 2026: $225M/$275M/$300M; 3‑yr cumulative: $550M/$650M/$750M; payout 0/100/200%; TSR modifier threshold/target/max at <25th/25th–74th/≥75th percentile adjusts −15%/0/+15% .
| 2024 LTI Grants to D. Dauch | Form | Target/Granted | Vesting/Performance | Grant Date Fair Value ($) |
|---|---|---|---|---|
| Performance Shares | Equity (FCF + TSR mod) | 318,972 target; 733,636 max | 3‑yr (2024–2026), paid at end | 2,261,511 |
| Performance Units | Cash (FCF + TSR mod) | Target $2,156,250; Max $4,959,375 | 3‑yr (2024–2026), paid at end | (Reported when earned) |
| RSUs | Equity (time-based) | 425,296 units | Cliff vest at 3 years (3/4/2027) | 2,875,001 |
- Payout of 2022 LTI performance awards (performance period 2022–2024): 111% of target overall; TSR modifier neutral (25th–74th percentile) .
| Component | Weight | Threshold | Target | Max | Actual | Payout % of target |
|---|---|---|---|---|---|---|
| 2022 FCF (year) | 20% | $200M | $250M | $300M | $313.0M | 200% (40% weighted) |
| 2023 FCF (year) | 20% | $200M | $250M | $300M | $246.4M | 96% (19% weighted) |
| 2024 FCF (year) | 20% | $200M | $300M | $400M | $230.3M | 65% (13% weighted) |
| 3‑yr Cumulative FCF | 40% | $600M | $800M | $1.0B | $789.7M | 97% (39% weighted) |
| TSR Modifier | ±15% | — | 25th–74th | ≥75th | 25th–74th | No impact |
| Total | — | — | — | — | — | 111% |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 2,246,449 shares; 1.9% of outstanding (118,333,473 O/S) . |
| Stock ownership guidelines | CEO 6x base salary; only directly owned shares and unvested RSUs count; NEOs met or on track as of 12/31/2024 . |
| Anti‑hedging/pledging | Hedging and pledging of AAM stock prohibited; applies to directors and officers . |
| Options | No options granted in 2024; program relies on RSUs and performance-based equity/cash . |
| Shares vested in 2024 | 520,360 shares vested; $3,350,864 value realized (RSUs + earned performance shares) . |
Outstanding and unearned awards as of 12/31/2024 (Dauch):
- Unvested RSUs: 388,094 (granted 2/28/2022; vested 2/28/2025), 326,705 (granted 2/28/2023; vests 2/28/2026), 425,296 (granted 3/4/2024; vests 3/4/2027) .
- Unearned performance shares: 245,029 (2023 grant; shown at target pro‑rata), 637,944 (2024 grant; shown at maximum pro‑rata based on 2024 performance; final payout depends on full period and TSR modifier) .
| Upcoming Vesting Schedule (RSUs) | Shares | Vest Date |
|---|---|---|
| 2022 grant (2/28/2022) | 388,094 | 2/28/2025 |
| 2023 grant (2/28/2023) | 326,705 | 2/28/2026 |
| 2024 grant (3/4/2024) | 425,296 | 3/4/2027 |
Deferred compensation and pensions (alignment and wealth at stake):
- ERSP balance $4,877,279; 2024 employer ERSP contribution $304,300; 401(k) match $17,250 .
- Present value of SERP benefit $8,273,442; AAM Pension Plan $497,712 (eligible to retire as of 12/31/2024) .
Employment Terms
| Term | Key Terms |
|---|---|
| Agreement & term | CEO employment agreement auto‑renews annually; retiree medical/dental/vision at 2012 salaried benefit levels . |
| Base/Target/LTI | 2024 base $1,250,000; AIP target 150% of salary; LTI target 575% of salary . |
| Severance (non‑CIC) | 2x base salary + 2x target bonus; prorated target bonus for year of termination; 2 years medical continuation; outplacement $50,000; subject to release and restrictive covenants . |
| Change‑in‑Control | Double‑trigger; 3x base salary + 3x annual bonus (higher of CIC year or termination year target); prorated target bonus; 3 years medical continuation; $50,000 outplacement . |
| Equity treatment (CIC) | Awards vest/settle per plan: if not assumed, cash‑out at change in control price; if assumed and terminated within 24 months (other than for cause or voluntary without good reason), vest at target for performance awards . |
| Clawbacks | Dodd‑Frank compliant policy for restatements; separate discretionary clawback for fraud/intentional misconduct causing material restatement . |
| Covenants | Confidentiality, non‑competition, non‑solicitation; required to receive/retain severance; durations not specified in proxy . |
| Tax gross‑ups | No excise tax gross‑ups; limited tax gross‑ups for spousal travel perqs . |
Estimated termination/CIC values as of 12/31/2024 (select totals):
- For good reason/without cause: $22.2M / $25.93M (includes severance, pro‑rated AIP, equity, ERSP, pensions, health, outplacement) .
- Upon a CIC termination: $39.60M (includes 3x base and bonus, equity at CIC treatment, ERSP, SERP, health, outplacement) .
Board Governance
- Roles and independence: Combined Chairman & CEO (Dauch); 9 of 10 directors independent; Dauch is not independent due to employment; Lead Independent Director: James A. McCaslin .
- Committees: All committees are independent except the Executive Committee (Dauch chairs); Executive Committee members: Dauch (Chair), McCaslin, John F. Smith .
- Meetings and oversight: Board met 9 times in 2024; 92% overall attendance; independent directors hold regular executive sessions; robust risk and cybersecurity oversight .
- Policy highlights: Stock ownership requirements; anti‑hedging/anti‑pledging; proxy access; majority vote in uncontested elections .
Board service history (Dauch):
- Director since 2009; Chairman since 2013; Executive Committee (Chair) .
- Director compensation: receives no additional compensation for board service .
Dual‑role implications: Combined CEO/Chair centralizes authority but is mitigated by a Lead Independent Director, fully independent committees (except Executive), and frequent independent executive sessions .
Compensation Peer Group and Say‑on‑Pay
- 2024 peer group includes OEM suppliers and industrials (e.g., Adient, Aptiv, BorgWarner, Dana, Lear, Magna, Timken, Visteon; plus others); AAM revenues slightly above the peer median; Meridian serves as independent consultant; two peers added in 2024 to replace acquired companies .
- Philosophy: base salary targeted at peer median; mix emphasizes performance‑based and long‑term pay; clawbacks and double‑trigger CIC features .
- Say‑on‑pay: 94% approval at 2024 annual meeting .
Related Party Transactions (Risk Considerations)
- Century, LLC (specialty metal/heat treat), affiliated with Dauch and family: AAM paid $193,230 in 2024 in ordinary course; Dauch and his brother serve on Century’s board; Audit Committee concluded transactions consistent with Codes .
- Family employment: Son (Director, Product Management) earned $297,223 in 2024 plus vehicle allowance and minor benefits; participates in LTIP cash; no direct reporting line to CEO .
Expert Qualifications and Background
- Board‑provided qualifications: innovation/technology, manufacturing, strategic planning, human capital and risk management; extensive internal experience since 1998 as officer .
- Education not disclosed in the proxy; various industry and civic leadership roles listed above .
Investment Implications
- Pay‑for‑performance alignment: High at‑risk mix (AIP tied to EBITDA margin/OCF and sustainability; LTI solely FCF with TSR modifier), explicit free cash flow targets and cumulative 3‑yr goals; 2024 AIP paid at 117% and 2022–2024 LTI at 111%, consistent with reported operating/cash‑flow performance .
- Retention vs. selling pressure: Significant unvested RSUs and unearned performance shares (multi‑year), with major vest dates in 2025/2026/2027; 2024 vesting of 520,360 shares could create liquidity events, but anti‑hedge/pledge policies and CEO 6x ownership guideline (met/on track) support alignment; no options overhang .
- Change‑in‑control economics: Substantial CIC value ($39.6M estimate) and 3x multiple with double‑trigger and no excise tax gross‑ups; equity treatment at target for performance plans upon qualifying termination limits windfalls while ensuring continuity in strategic transactions .
- Governance risk/mitigants: Dual CEO/Chair offset by strong lead independent director, independent committees, executive sessions, and high say‑on‑pay support (94%); related‑party transactions are modest and reviewed by Audit Committee .
- Downstream signals: Elevation of OCF and multi‑year FCF in incentives, and explicit deleveraging focus, signal continued prioritization of cash generation and balance sheet health—key levers for equity value and potential M&A integration (e.g., Dowlais offer announced early 2025) .