Tolga Oal
AMERICAN AXLE & MANUFACTURING HOLDINGSAbout Tolga Oal
Tolga I. Oal is President – Driveline at American Axle & Manufacturing (AAM), a role he has held since rejoining AAM in December 2022 after serving as Co-Chief Executive Officer of Howmet Aerospace until October 2021. He is 53 years old (FY2024 10-K) . Under his span (Driveline), FY2024 net external sales were $4,251.9 million (up from $4,176.5 million in FY2023) and Segment Adjusted EBITDA was $578.2 million (up from $543.6 million), reflecting volume increases and improved operating performance . AAM’s 2024 annual incentive paid at 117% of target on EBITDA margin, operational cash flow, and sustainability metrics; long-term incentives emphasize free cash flow with a relative TSR modifier of ±15% over a three-year period .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AAM | President – Driveline | Since Dec 2022 | Led Driveline segment with FY2024 net external sales of $4,251.9m and Segment Adj. EBITDA of $578.2m; YoY +$75.4m sales and +$34.6m EBITDA . |
| Howmet Aerospace | Co-Chief Executive Officer | Through Oct 2021 (end date disclosed) | Senior leadership at an aerospace supplier prior to rejoining AAM . |
| AAM | SVP – Global Procurement & Supplier Quality Engineering | Since Jan 2019 (within 2015–2019 service window) | Led procurement/SQE initiatives at enterprise scale . |
| AAM | President – Driveline | Since Sep 2018 (within 2015–2019) | Business unit P&L leadership (Driveline) . |
| AAM | SVP – AAM and President – AAM North America | Since Sep 2015 (within 2015–2019) | Regional leadership for North America . |
| TRW Automotive | Vice President, Global Electronics | Since 2012 | Led global electronics; prior roles included Director of Operations and Director of Finance . |
| Siemens VDO/Continental | Various leadership roles | Not disclosed | Leadership across engineering, sales, purchasing, and finance . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Howmet Aerospace | Co-Chief Executive Officer | Through Oct 2021 (end date disclosed) | Executive leadership outside AAM pre-dating Dec 2022 return . |
| TRW Automotive | Vice President, Global Electronics; prior roles | Since 2012 (start disclosed) | Electronics operations/finance leadership in a major Tier-1 . |
| Siemens VDO/Continental | Leadership roles | Not disclosed | Cross-functional auto supplier leadership experience . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $600,000 | $600,000 |
| Target Annual Bonus (% of base) | 80% | 80% |
| Annual Bonus Paid ($) | $547,200 | $561,600 |
| Stock Awards – Grant Date Fair Value ($) | $969,398 | $964,778 |
| All Other Compensation ($) | $66,748 | $137,603 |
| Total Compensation ($) | $2,183,346 | $2,263,981 |
| LTI Target Opportunity | 2023 | 2024 |
|---|---|---|
| Target LTI ($) | $1,350,000 | $1,350,000 |
| Target LTI (% of base) | 225% | 225% |
Performance Compensation
Annual Incentive – 2024 Structure and Outcome
| Metric | Weight | Target | Actual | Payout |
|---|---|---|---|---|
| EBITDA Margin | 45% | Not disclosed | Not disclosed | Included in 117% total |
| Operational Cash Flow | 52% | Not disclosed | Not disclosed | Included in 117% total |
| Sustainability Measures | 20% | Not disclosed | Not disclosed | Included in 117% total |
| Total | 100% | — | — | 117% of target |
| 2024 Plan-Based Awards (Granted 3/4/2024 unless noted) | Value/Count |
|---|---|
| Annual Incentive Target / Maximum ($) | $480,000 / $960,000 |
| Performance Units (Cash) – Target / Max ($) | $405,000 / $931,500 |
| Performance Shares (Stock) – Target (#) / Grant Date FV ($) | 59,912 / $424,776 |
| RSUs – All Other Stock Awards (#) / Grant Date FV ($) | 79,882 / $540,002 |
| LTI Mix (Performance Awards / RSUs) | 60% / 40% |
| Performance Period (PS/PU) | 3-year FCF with ±15% TSR modifier |
LTI Performance Curves (Free Cash Flow, $ millions)
| Period | Threshold | Target | Maximum |
|---|---|---|---|
| 2024 | $175 | $200 | $240 |
| 2025 | $150 | $175 | $210 |
| 2026 | $225 | $275 | $300 |
| 3-year Cumulative | $550 | $650 | $750 |
| TSR Modifier (3-year) | Threshold | Target | Maximum |
|---|---|---|---|
| Percentile / Modifier | Below 25th / (15)% | 25th–74th / 0% | ≥75th / +15% |
2024 performance share tallies for grants made in 2023 and 2024 currently reflect target or maximum based on FCF performance through 12/31/24; final payouts will be set at the end of each three-year period (TSR modifier at 0% in the interim disclosures) .
Equity Ownership & Alignment
- Beneficial Ownership (as of March 6, 2025): Tolga Oal reported “—” shares (less than 1% of outstanding) in the beneficial ownership table .
- Outstanding (Unvested) Equity as of 12/31/2024:
- RSUs: 61,364 (granted 2/28/2023; vests 3 years from grant) valued $357,752 at $5.83; 79,882 (granted 3/4/2024; vests at 3 years) valued $465,712 .
- Performance Shares: 46,023 (2023 grant; performance period ending 12/31/2025) valued $268,314; 119,824 (2024 grant; performance period ending 12/31/2026) valued $698,574 (values at $5.83) .
- Stock Vested: No equity vested for Oal during 2024 due to date of hire .
- Stock Ownership Guidelines: Other executive officers must hold stock equal to 2x base salary; only directly owned shares and unvested RSUs count; executives not meeting guidelines may not sell shares. As of 12/31/2024, NEOs have met or are on track .
- Hedging/Pledging: Company policy prohibits hedging and speculative transactions; pledging is prohibited (policy details described; anti-pledging explicitly stated for directors; Insider Trading Policy applies to directors, officers, employees) .
- Alignment: LTI is majority performance-based (free cash flow with relative TSR modifier), with RSUs cliff-vesting after three years, promoting retention and long-term alignment .
Employment Terms
| Provision | Non‑CIC Termination (Without Cause/Good Reason) | Change in Control (CIC) – Double Trigger |
|---|---|---|
| Plan | AAM Executive Officer Severance Plan | AAM Change in Control Plan |
| Cash Severance | Up to 1.5x (base salary + target annual bonus), based on position | 2x (base salary + target annual bonus) |
| Prorated Bonus | Prorated annual bonus based on actual results | Prorated target annual bonus (greater of CIC year or termination year target) |
| Health Benefits | Up to 1.5 years continuation based on position | 2 years continuation |
| Outplacement | Up to $20,000 | Up to $30,000 |
| Equity | Standard plan terms; see award agreements | Double-trigger vesting acceleration or cash-out if not assumed; unearned performance awards earned at target pro‑rated if applicable |
| Clawback | Dodd‑Frank compliant and discretionary clawback policies in place | Same |
| Tax Gross‑Ups | None; 280G cut‑down if beneficial | None; 280G cut‑down if beneficial |
| Non‑Compete/Non‑Solicit | 1‑year non-compete; non-solicit and confidentiality covenants | 1‑year non-compete; same covenants |
Tolga Oal – Illustrative Potential Payments (12/31/2024)
| Scenario | Cash Severance ($) | Annual Incentive ($) | RSUs ($) | 2023 PS ($) | 2023 PU ($) | 2024 PS ($) | 2024 PU ($) | Health Care ($) | Outplacement ($) | Disability ($) | Total ($) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Good Reason Resignation | 900,000 | 1,281,600 | — | — | — | — | — | 33,205 | 20,000 | — | 2,234,805 |
| Without Cause Termination | 900,000 | 1,281,600 | — | 178,876 | 270,000 | 116,429 | 135,000 | 33,205 | 20,000 | — | 2,935,110 |
| Disability | — | 561,600 | 823,464 | 178,876 | 270,000 | 116,429 | 135,000 | 55,341 | — | 3,538,648 | 5,679,358 |
| Termination Upon CIC | 1,200,000 | 1,521,600 | 823,464 | 268,314 | 405,000 | 349,287 | 405,000 | 44,273 | 30,000 | — | 5,046,938 |
Notes: Oal participates in the Severance Plan and CIC Plan (double-trigger). No CIC tax gross-ups; reduction applies if beneficial to avoid excise taxes . Equity treatment under CIC follows plan double-trigger rules and amended 2018 Omnibus Plan provisions .
Compensation Structure Analysis
- Cash vs Equity Mix: Base salary held flat at $600,000 in 2023 and 2024; annual incentive target remained 80% of salary; LTI target unchanged at 225% of salary, with LTI mix at 60% performance awards and 40% RSUs, emphasizing at-risk equity .
- Performance Orientation: 2024 annual incentive paid at 117% on EBITDA margin, operational cash flow, and sustainability measures (no discretionary overlays). LTI uses multi-year free cash flow goals with a relative TSR modifier (±15%), aligning with deleveraging and shareholder returns .
- Equity Vehicles: No option awards disclosed; awards are RSUs, performance shares (stock), and performance units (cash), with three-year performance/vesting horizons supporting retention .
- Governance Safeguards: Robust clawback framework (Dodd-Frank and discretionary), anti-hedging/anti-pledging policy, stock ownership requirements (2x salary for other executive officers), and no CIC tax gross-ups .
Investment Implications
- Alignment and Retention: Oal’s pay design is highly performance-weighted (FCF and TSR), with significant unvested RSUs/PSUs vesting in 2026–2027, which reduces near-term selling pressure and supports retention; stock ownership rules further restrain sales until guidelines are met .
- Execution Track Record: Driveline delivered YoY gains in FY2024 (sales and Segment Adj. EBITDA), while annual incentives paid above target (117%), indicating execution against operational and cash flow levers central to compensation .
- Risk Controls: Moderate severance (1.5x outside CIC; 2x at CIC, double-trigger) and non-compete reduce transition risk; no gross-ups and robust clawbacks mitigate shareholder-unfriendly outcomes .
- Watch Items: Beneficial ownership reported as “—” as of March 6, 2025 (though RSUs count for ownership guidelines), and strong FCF emphasis can bias toward capex discipline; investors should monitor sustainability of FCF targets and TSR-relative performance through the three-year cycles .