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Diving overview:
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Ally Financial has appointed Michael G. Rose as its next CEO, effective April 29. the bank said on Wednesday..
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Rose, 58, takes over after being named chief executive officer of card issuer Discover earlier this year. I took up this role in December last year.. In February, Capital One announced: aiming to acquire Discover The stock is worth $35.3 billion.
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Rose submitted his resignation to the Discover board on Tuesday, effective April 1. According to the submitted documents and the Securities and Exchange Commission. Discover announced that J. Michael Shepherd, a member of Discover’s board of directors, will serve as interim CEO and president and interim president of the bank.
Dive Insight:
in based in detroit Ally, Rose will succeed Jeffrey J. Brown, who stepped down as CEO in January after nearly nine years. Since then, Doug Timmerman, Ally’s president of dealer financial services, has served as interim CEO of the $196 billion bank. Rose will also join Ally’s board of directors when he becomes CEO next month.
In a statement announcing his resignation, Rose said he was “not expected to have a long-term role” at Discover after the card company merged with Riverwoods, Illinois-based Capital One. Says.
During a February investor conference call discussing details of the Capital One acquisition, Mr. Rose said he would serve as an advisor to Capital One CEO Richard Fairbank for one year after the acquisition closes. He said it was planned.
Executives expect the deal to close late this year or early next year, pending regulatory approval.
Discover said in its filing that Mr. Rose will serve as Mr. Shepherd’s advisor until April 12 and continue to receive a base salary for the remainder of his employment. His unvested stock awards will be forfeited and Rose will repay some cash paid to him by Discover, the filing said.
At Ally, Mr. Rose will receive an annual base salary of $1 million, according to a company announcement. Wednesday’s SEC filing. His total incentive goal for his fiscal year 2024 is $10.5 million, with the earned amount paid out after the year-end in the form of cash incentives (30%) and stock-based bonuses (70%). Stock compensation is 60% performance-based stock units and 40% time-based restricted stock units.
Mr. Rose also received a cash award of $900,000 from Ally, as well as a full compensation amount valued at $16.2, “to perfect certain compensation that has been forfeited or withheld from his former employer in connection with the employment transition.” You will receive a stock subsidy. Ally said in her filing that she was up to 1 million.
Sean Cole, president and founding partner of executive search firm Cowen Partners, said Capital One’s acquisition of Discover was likely high on the list of reasons for Rose’s move.
Cole said in an email Thursday that he was blindsided by “things that may not have been disclosed to him during the interview process.” “Given the timing, it’s likely he was talking to Ally with Discover anyway. [Then] took a job at Discover, and when the merger was announced, Allie got back in touch. ”
Cole said such quick transfers of executives can result from “significant” personality conflicts with the board or chairman, or because non-public information is discovered after taking the job. . For Rose, that could mean Allie was always her first choice, but she moved too late and she ended up wooing him later, Cole said. .
Rose’s exit leaves Discover without a leader again, even as the company faces regulatory scrutiny over its past business practices. Capital One’s proposed takeover has also drawn criticism from lawmakers concerned about concentration in the banking industry.
As Discover’s interim CEO, Mr. Shepherd will receive a base salary of $1.25 million and a restricted stock unit award with a grant date value of $5.75 million, according to Discover’s filing. The stock award will vest upon the earlier of the consummation of the merger with Capital One or his one-year anniversary from the date of grant.
According to Discover, Shepherd will remain on the company’s board, but will leave the board’s risk oversight committee while serving as interim CEO and president.a shepherd was appointed Joined Discover’s Board of Directors in August last year.The company has been trying to get its risk and compliance issues under control, even after former CEO Roger Hochschild abruptly stepped down.
Rhodes, before taking up the top post at Discover Worked at TD for approximately 12 years and will serve as Group Head of Personal Banking in Canada from January 2022.. He joined TD in 2011 to lead the North American credit card and merchant services business and has approximately 25 years of experience in financial services.
Mr. Shepherd is the former Chairman and CEO of BancWest Corp. and its subsidiary Bank of the West (recently acquired by BNP Paribas).
This article was originally published on Banking Dive. For daily news and insights, subscribe to our free daily Banking Dive newsletter.
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