Tammy McConnaughey
Executive Vice President, Chief Credit Risk and Operations Officer at BREAD FINANCIAL HOLDINGS
Executive
About Tammy McConnaughey
Executive Vice President, Chief Credit Risk and Operations Officer at Bread Financial (BFH). She oversees Operations and Credit Risk and has served in this EVP role since January 2021; she originally joined the Company in 1992. Education: B.S. in Business, Mount Vernon Nazarene University. Age: 51 (2025 proxy); 50 (2024 proxy). Her remit spans collections, customer care, operations, and credit risk—core levers tied directly to BFH’s pay-for-performance scorecard (PPNR, Net Credit Losses, ERM, SLAs, digital engagement) that drive annual incentive payouts and PBRSU performance. Notably, company PBRSUs paid out at 130% for the 2021–2023 cycle and 120.2% for the 2022–2024 cycle based on ROE targets, evidencing linkage between performance and equity realization .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Bread Financial (BFH) | EVP, Chief Credit Risk & Operations Officer | Jan 2021–present | Leads credit risk and operations across collections, customer care, operations; central to credit outcomes and service levels tied to incentive metrics . |
| Bread Financial (BFH) | Various leadership roles in collections, customer care, operations, credit risk | 1992–2020 | Built deep institutional expertise across risk and operations functions critical to BFH’s balanced scorecard . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Mid-Ohio Food Collective | Director | Not disclosed | Community and nonprofit leadership . |
Fixed Compensation
- McConnaughey’s reported compensation as an NEO (when disclosed) shows competitive base salary with majority of compensation at-risk:
- Base salary (USD): 2021: $541,495; 2022: $617,692; 2023: $639,231 .
- Perquisites and personal benefits (selected items, 2023): $7,128; Company 401(k) contributions: $19,800 .
- Executive Deferred Compensation: 2023 contributions $210,298; aggregate balance $1,266,013; above-market earnings credited at 9% plan rate in 2023 totaled $102,799 .
| Metric | FY 2021 | FY 2022 | FY 2023 |
|---|---|---|---|
| Base Salary (USD) | $541,495 | $617,692 | $639,231 |
| All Other Comp – Perqs (USD) | $41,908 | $43,787 | $7,128 |
| Company 401(k) Contribution (USD) | N/A | N/A | $19,800 |
| Exec Deferred Comp – Employee Contributions (USD) | N/A | $30,885 (salary deferred) | $210,298 (incl. $31,962 salary; $178,336 AIC) |
| Exec Deferred Comp – Above-Market Earnings (USD) | $47,783 | $56,387 | $102,799 |
Performance Compensation
Annual Incentive Compensation (AIC) – Individual Cash Outcomes
- AIC (cash) earned (USD): 2021: $732,820; 2022: $1,188,905; 2023: $1,083,840 .
- 2023 AIC targets for McConnaughey: Threshold $288,000; Target $960,000; Maximum $2,112,000 .
| Metric | FY 2021 | FY 2022 | FY 2023 |
|---|---|---|---|
| AIC (Non-Equity Incentive Plan Compensation, USD) | $732,820 | $1,188,905 | $1,083,840 |
| AIC Threshold / Target / Max (USD) | — | — | $288,000 / $960,000 / $2,112,000 |
AIC Scorecard Design and 2024 Results (company-wide; applies to executive leadership)
- Balanced scorecard weights and payout cap: Stockholder 70%, Customer 20%, Associate 10%; core scorecard capped at 100% unless Financial metrics ≥85% of target. Strategic modifiers: CFPB Late Fee Readiness (0–10%), Operational Excellence (0–10%); Discretionary Consideration Framework (±10%). 2024 final payout was 130.00% (107.77% core + 22.23% modifiers) .
| 2024 AIC Metric (category) | Weight | Target range | Actual result | Score/Payout |
|---|---|---|---|---|
| Average Loans (Stockholder) | 10% | $18.007–$18.226B | $17.713B | 81.75% |
| Net Credit Losses – NCLs (Stockholder) | 10% | $1.448–$1.431B | $1.489B | 84.67% |
| PPNR (Stockholder) | 30% | $1.892–$1.986B | $1.899B | 95.70% |
| Operating Leverage (Stockholder) | 10% | 0.21%–3.03% | 1.99% | 101.32% |
| ERM Composite (Stockholder) | 10% | Not disclosed | Not disclosed | 97.49% |
| Critical SLAs (Customer) | 5% | 98% | 98.29% | 129.00% |
| Digital Engagement (Customer) | 5% | 63.00% ADU; 75.00% IVR | 63.76% ADU; 76.37% IVR | 160.8%/200% |
| Application Availability (Customer) | 5% | 99.90% | 99.91% | 120.00% |
| NPS (Customer) | 5% | 47.60 | 47.20 | 92.00% |
| Associate Engagement (Associate) | 5% | 77% | 79.60% | 137.14% |
| Core Associate Experience (Associate) | 5% | ≤3–2% Δ | 0.79% Δ | 200.00% |
| Core scorecard total | — | — | — | 107.77% |
| Modifiers (CFPB readiness; OpEx; DCF) | — | — | — | +9.25%; +10.00%; +2.98% |
| Final AIC payout factor | — | — | — | 130.00% |
Long-Term Equity (LTIC) – Grants and Payout Mechanics
- Design: 60% PBRSUs; 40% TBRSUs. PBRSUs historically tied to annual ROE targets over a 3-year period; cliff-vest at the end. TBRSUs vest ratably over ~3 years. No stock options are currently granted to NEOs .
- McConnaughey 2023 LTIC grant: PBRSUs (target) 18,191; TBRSUs 12,128 (grant date 3/24/2023; TBRSU vesting 33% at grant, 33% 2/15/2025, 34% 2/18/2026) .
- PBRSU performance outcomes:
- FY2021–2023 grant cycle paid at 130% of target (8th percentile rTSR modifier capped payout to 130%). McConnaughey’s PBRSUs from the 2021 grant vested 2/16/2024 at 12,220 shares (time-vesting release after performance certification) .
- FY2022–2024 tranche certified at 120.2% average (company-wide) for PBRSUs granted in 2022, based on adjusted ROE results (with board-approved adjustments for macro/regulatory impacts for 2024 ROE on 2022/2023 grants) .
- 2025 redesign (applies to executive PBRSUs): 75% ROTCE + 25% EPS with ±10% rTSR modifier; still 60% PBRSU / 40% TBRSU; cliff vest over three years .
| Equity Item | Key terms / amounts |
|---|---|
| 2023 PBRSU grant (target shares) | 18,191 (3/24/2023 grant) |
| 2023 TBRSU grant (shares) | 12,128; vest 33% at grant; 33% on 2/15/2025; 34% on 2/18/2026 |
| 2021–2023 PBRSU payout | 130% of target; McConnaughey: 12,220 shares vested 2/16/2024 |
| 2022–2024 PBRSU payout (company) | 120.2% average over cycle |
| 2025 PBRSU metrics | 75% ROTCE; 25% EPS; ±10% rTSR modifier (3-yr) |
Equity Ownership & Alignment
- Beneficial ownership (as of 3/20/2024): 38,127 shares; <1% of outstanding .
- Outstanding (12/31/2023) and vesting runway:
- TBRSUs: 21,526 units outstanding (market value $709,066 at $32.94 as of 12/29/2023). Scheduled: 6,069 vests 2/15/2025; 4,124 vests 2/15/2026 .
- PBRSUs (2022–2024 cycle): 13,673 units outstanding (market value $450,389 at $32.94); subject to 3-year cliff vesting 2/15/2025 .
- PBRSUs (2023–2025 cycle): 18,191 units outstanding (market value $599,212 at $32.94); subject to 3-year cliff vesting 2/15/2026 .
- Stock ownership guidelines: Executives must hold a multiple of salary; includes outright holdings and 70% of unvested TBRSUs. Until compliant, must retain ≥50% of net shares at vesting. As of 3/31/2024, all NEOs were compliant with holding requirements; all NEOs other than the CFO were compliant with guidelines—indicating McConnaughey was compliant at that time .
- Hedging/pledging prohibited; directors/officers cannot hold shares in margin accounts or pledge as collateral; covered persons must pre-clear trades and transact only in approved windows .
| Item | Status |
|---|---|
| Beneficial ownership | 38,127 shares; <1% |
| Ownership guideline compliance | In compliance (as of 3/31/2024) |
| Hedging/pledging | Prohibited by policy |
Employment Terms
- No individual employment, severance, or change-in-control agreements. Standard equity plan double-trigger: if terminated without cause or resigns for good reason within 12 months after a change in control, equity accelerates .
- Estimated CI value for McConnaughey (as of 12/31/2023) under target scenarios: $2,011,053 (equity acceleration value at $32.94) .
- Clawback: robust recoupment policy aligned with SEC Rule 10D and NYSE 303A.14; plan awards also subject to forfeiture for covenant breaches and to recover overpayments .
- Deferred Compensation Plan: executives may defer up to 50% of salary and incentives; interest rate was 9.0% in 2023 and increased to 11.0% for 2024 (reduced to 10.0% for 2025) .
- 401(k): Company contributes 3% plus a 50% match up to 6% of pay; match vests after 3 years .
Performance & Track Record
- PBRSU payouts indicate sustained performance: 130% for 2021–2023 (after rTSR modifier), and 120.2% average for 2022–2024 PBRSUs following adjusted ROE results. The compensation committee allowed certain ROE adjustments (e.g., BJ’s portfolio sale gain treatment in 2023; macro/regulatory adjustments in 2024) to reflect long-term business context and external factors .
- 2024 AIC scorecard achieved 130% payout with strong Operating Leverage, SLAs, Digital Engagement, and Associate metrics; financial pillars (PPNR, NCL) were between threshold and target but above the minimum cap for the scorecard to exceed 100% .
- Company-level strategic KPIs improved capital and funding resilience (e.g., CET1 12.4%, consumer deposits $7.7B, tangible book value/share $46.97), areas overlapping McConnaughey’s risk discipline .
Compensation Committee & Governance Signals
- Pay mix: high proportion at-risk; CEO 88% and other NEOs 79% at-risk (2024/2025 disclosures) .
- 2025 PBRSU metric enhancements: Added ROTCE and EPS with rTSR modifier responsive to investor feedback; 2024 AIC weighting increased Stockholder metrics to 70% and introduced a cap unless Financial metrics reach ≥85%—tightening pay-for-performance .
- Say-on-Pay: Approval ~75% in 2023 and ~82% in 2024; active investor engagement prompted the 2025 PBRSU redesign and disclosure enhancements .
- Peer group includes Ally, Discover, Synchrony, Capital One, SoFi, LendingClub, OneMain and regional banks—informing market positioning and plan design .
Risk Indicators & Red Flags
- No related party transactions disclosed since the beginning of 2024 .
- Hedging/pledging prohibited; strong insider trading controls .
- Adjustments to PBRSU metrics: 2024 certification for 2022/2023 grants included macro/regulatory adjustments to ROE; while rationalized, such discretion can dilute strict outcome linkage if overused; note that 2024 PBRSUs were not adjusted in similar fashion .
- No option repricing permitted under equity plans; awards subject to minimum one-year vesting (with limited exceptions) .
Investment Implications
- Alignment: Long tenure, ownership guideline compliance, and meaningful unvested equity (TBRSUs and PBRSUs) create retention hooks and align incentives with multi-year credit, PPNR, and service outcomes that are central to BFH’s value drivers .
- Near-term selling pressure: Scheduled TBRSU and PBRSU vesting in 2025–2026 (aggregate ~37k+ units subject to vesting/performance) could incrementally increase realized liquidity, but retention requirements (50% net shares held until compliant) and policy prohibitions (hedging/pledging) mitigate short-term sale risk .
- Pay-for-performance quality: 2025 PBRSU redesign (ROTCE/EPS with rTSR modifier) strengthens shareholder-return alignment; 2024 AIC cap tied to Financial metrics constrains payout upside absent fundamental delivery—both supportive of higher-quality incentives for risk leadership roles like McConnaughey’s .
- Change-in-control economics: No individualized severance; equity uses double-trigger acceleration; McConnaughey’s estimated CI equity value at YE23 was ~$2.0M, indicating measured CIC exposure and limited windfall risk .
- Watch items: The committee’s willingness to adjust PBRSU outcomes for macro/regulatory factors (for older grants) should be monitored for consistency; however, investor engagement appears to have driven enhanced metrics and transparency in 2025, reducing future discretion reliance .
Sources: 2025 DEF 14A (executive roles, 2024 AIC design/results, pay mix, policies, governance); 2024 DEF 14A (individual compensation details, grants, vesting, ownership, CIC economics, peer group, say-on-pay). Specific citations embedded above.