Terri Kemp
AMERICAN AXLE & MANUFACTURING HOLDINGSAbout Terri Kemp
Terri M. Kemp, age 59, is Senior Vice President – Human Resources & Sustainability at American Axle & Manufacturing (AAM), a role she has held since March 2023; she joined AAM in 1996 after nine years at Corning Incorporated in manufacturing leadership roles . In 2024, AAM delivered $6,124.9 million in net sales (+0.7% y/y), $749.2 million Adjusted EBITDA (12.2% margin), and $455.4 million operating cash flow, reflecting execution against cost control and cash generation priorities central to incentive design . AAM’s cumulative TSR stood at 54.18 for 2024 versus 91.79 for the peer group, and pay programs emphasize Free Cash Flow with a relative TSR modifier to strengthen alignment with shareholders .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AAM | SVP – HR & Sustainability | 2023–Present | Leads global HR and sustainability programs; sustainability is explicitly tied to incentives (10% of annual bonus) . |
| AAM | SVP – HR | 2023 | Executive leadership of HR during refresh of compensation and ESG-linked incentives . |
| AAM | VP – HR | 2012–2022 | Drove HR operations and labor relations supporting global footprint and launches . |
| AAM | Executive Director – HR & Labor Relations | 2010–2012 | Led labor relations, supporting cost discipline and operational stability . |
| AAM | Executive Director – HR; Director – HR Operations; earlier plant/program roles | 2008–2010 (and prior) | Built HR operating systems underpinning performance/retention through cycles . |
| Corning Incorporated | Industrial Engineer; Department Head; Operations Manager | ~1987–1996 | Manufacturing operations leadership foundation, relevant to AAM’s production culture . |
External Roles
- Not disclosed in company filings reviewed .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 475,118 (prorated due to leave) | 525,000 |
| Target Bonus (% of base) | 80% | 80% |
| Actual Annual Incentive Paid ($) | 819,199 (total non‑equity incentive for 2023) | 491,400 (AAM annual incentive plan) |
| Total Non‑Equity Incentive Plan Comp ($) | 819,199 | 680,796 (includes $491,400 annual + $189,396 LTI PU) |
| All Other Compensation ($) | 240,390 | 123,231 |
| Total Compensation ($) | 2,401,743 | 2,173,210 |
Notes:
- 2024 annual bonus paid at 117% of target company-wide, based on EBITDA margin (40%), Operational Cash Flow (50%), and Sustainability (10%) metrics .
- 2024 All Other Compensation includes retirement contributions ($83,150), 401(k) match ($17,250), executive life insurance ($4,885), company vehicle ($16,454), and umbrella insurance ($1,492) .
Performance Compensation
Annual Incentive Design (2024)
| Metric | Weight | Threshold | Target | Max | 2024 Actual | Payout as % of Target |
|---|---|---|---|---|---|---|
| EBITDA Margin | 40% | 10.0% | 12.0% | 13.75% | 12.2% | 113% → 45% contribution |
| Operational Cash Flow | 50% | $400m | $500m | $625m | $505m | 104% → 52% contribution |
| Sustainability Objectives | 10% | — | — | — | Achieved (max) | 20% contribution |
| Total Payout | — | — | — | — | — | 117% of target |
Long-Term Incentive (2024 grant)
- Mix: 60% performance-based (30% Performance Shares (PS) in stock + 30% Performance Units (PU) in cash), 40% RSUs; PS/PU metric is Free Cash Flow (annual 2024/2025/2026 each 15%, plus 55% 3‑year cumulative), with ±15% modifier for relative TSR vs automotive peers .
- Free Cash Flow goals (2024/2025/2026/3-year): $175m/$150m/$225m thresholds; $200m/$175m/$275m targets; $240m/$210m/$300m maximums; 3‑yr cumulative $650m target, $750m max .
- RSUs cliff vest on 3rd anniversary of grant (3/4/2027 for 2024 awards) .
2024 Grants to Terri M. Kemp
| Award Type | Grant Date | Target/Units | Grant Date Fair Value ($) |
|---|---|---|---|
| Performance Shares (PS) | 3/4/2024 | 52,423 target shares | 120,573 |
| Performance Units (PU) | 3/4/2024 | $354,375 target (cash) | — |
| RSUs | 3/4/2024 | 69,897 units | 472,504 |
Prior cycle payout (2012 LTI framework evolution example): 2022 performance awards (2022–2024 FCF) paid at 111% (after Committee-approved UAW stoppage adjustment), underscoring cash-flow rigor; TSR modifier neutral (25th–74th percentile) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 157,442 shares (<1% of outstanding) . |
| Unvested RSUs | 36,853 (2022 grant, vested 2/28/2025), 53,694 (2023, vests 2/28/2026), 69,897 (2024, vests 3/4/2027) . |
| Performance Shares Outstanding | 40,270 (2023 PS at target, perf period ends 12/31/2025); 104,846 (2024 PS reflecting max accrual as of 12/31/2024; final depends on 2024–2026 results) . |
| 2024 Stock Vested | 58,847 shares value realized $383,007 (2021 RSUs and 2024 PS earned) . |
| Ownership Guidelines | CEO 6x base; CFO/COO 3x; other executive officers 2x. NEOs met or are on track; no sales permitted if not in compliance . |
| Hedging/Pledging | Prohibited for directors and executive officers; pre-clearance and blackout policy applies . |
Vesting over next 24 months (potential supply consideration):
- 2022 RSUs vested 2/28/2025 (36,853 shares) .
- 2023 RSUs scheduled for 2/28/2026 (53,694 shares) .
- 2023 PS performance period ends 12/31/2025; payout in 2026 subject to FCF/TSR outcomes .
- Blackout and pre‑clearance mitigate immediate post‑vest sale risk .
Employment Terms
- Severance Plan (non‑CIC): For EVP/other exec officers, cash severance up to 1.5× (base + target bonus), pro‑rated annual bonus, up to 1.5 years health benefits, $20k outplacement; subject to release and covenants .
- Change-in-Control Plan (double trigger within 2 years): 2× (base + target bonus), pro‑rated bonus (greater of CIC year or termination year target), 2 years health benefits, $30k outplacement .
- Non‑Compete/Non‑Solicit: While employed and for 1 year post‑employment, prohibits competition, solicitation, or misuse of confidential information (applies to Ms. Kemp) .
- Clawbacks: Dodd‑Frank compliant recovery policy (restatement trigger) plus discretionary policy for fraud/misconduct leading to material restatement; applies to annual and long‑term performance pay .
- No tax gross‑ups on CIC; “best net” cutback applies if excise tax would reduce after‑tax value .
Potential Payments (illustrative, as of 12/31/2024)
| Scenario | Cash Severance | Bonus (incl. pro‑rata/target) | Equity Treatment | Benefits/Other | Total ($) |
|---|---|---|---|---|---|
| Good Reason Resignation | 787,500 | 1,121,400 | PS/PU/RSU pro‑rata at target; no acceleration | Health $45,602; ERSP/EDC vested balances $1,420,069; SERP $1,463,720; $20k outplacement | 5,018,091 |
| Without Cause | 787,500 | 1,121,400 | Same as above | Same as above | 5,630,857 |
| CIC Termination (Double Trigger) | 1,050,000 | 1,331,400 | Full vest of unvested awards at target; RSUs vest in full | Health $60,802; ERSP/EDC $1,420,069; SERP $1,463,720; $30k outplacement | 7,700,330 |
Notes: Equity values reflect policy (pro‑rata at target for non‑CIC; full vest at target for double trigger CIC) with valuation at $5.83 per share as of 12/31/2024, per footnotes .
Investment Implications
- Pay–performance alignment: High proportion of at‑risk pay tied to Free Cash Flow (LTI) and cash generation/EBITDA margin (annual), with a TSR modifier on LTI; 2024 bonus paid at 117% reflecting EBITDA margin of 12.2% and Operational Cash Flow of $505m . This favors deleveraging and liquidity, consistent with AAM’s debt reduction ($130m reduction in 2024) and capex discipline .
- Selling pressure timing: Upcoming RSU cliffs (2026/2027) and 2025 vest for 2022 RSUs; pre‑clearance/blackouts and ownership guidelines limit indiscriminate selling, but watch 1Q–1Q vest windows (March/Feb) for incremental supply .
- Retention/CIC economics: Non‑CIC severance at 1.5× and CIC at 2.0× (double trigger) are moderate; no excise gross‑ups and robust clawbacks are shareholder‑friendly .
- Execution risks: EV program volatility (e.g., 2024 termination of a major e‑Beam axle order) underscores the importance of cash‑centric metrics and variable pay; HR & Sustainability leadership is directly incentivized via ESG goals (10% of bonus), supporting workforce and supply chain initiatives critical amid launches and EV uncertainty .
Shareholder signaling: 94% Say‑on‑Pay approval in 2024 and increased performance‑based LTI weight to 60% suggest investor support for the current design, which remains centered on free cash flow and relative TSR alignment .
Data Appendix
Compensation Summary (select items)
| Metric | 2023 | 2024 |
|---|---|---|
| Salary ($) | 475,118 | 525,000 |
| Stock Awards ($) | 848,226 | 844,183 |
| Non‑Equity Incentive ($) | 819,199 | 680,796 |
| All Other Compensation ($) | 240,390 | 123,231 |
| Total ($) | 2,401,743 | 2,173,210 |
Key AAM Performance Indicators
| Metric | 2023 | 2024 |
|---|---|---|
| Net Sales ($mm) | 6,079.5 | 6,124.9 |
| Adjusted EBITDA ($mm) | 693.3 (segment sum) | 749.2 |
| Adjusted EBITDA Margin (%) | — | 12.2% |
| Operating Cash Flow ($mm) | — | 455.4 |
| Cumulative TSR (Index) | 81.88 | 54.18 |
Outstanding/Unvested Equity (12/31/2024)
| Type | Units/Shares | Notes |
|---|---|---|
| RSUs (2022) | 36,853 | Granted 2/28/2022; vest 2/28/2025 . |
| RSUs (2023) | 53,694 | Vest 3 years from grant (2/28/2026) . |
| RSUs (2024) | 69,897 | Vest 3 years from grant (3/4/2027) . |
| PS (2023 at target) | 40,270 | Perf period 1/1/2023–12/31/2025 . |
| PS (2024 accrual) | 104,846 | Reflects max accrual as of 12/31/2024; subject to 2024–2026 results . |
| 2024 PS grant | 52,423 target | 3‑year FCF with TSR modifier . |
| 2024 PU grant | $354,375 target | Cash‑settled; same metrics as PS . |
All information is sourced from AAM’s 2025 Definitive Proxy Statement (DEF 14A) and 2024 Form 10‑K as cited.