[ad_1]
Dive Overview:
- Ally Financial has appointed Michael G. Rose as its next CEO, effective April 29th. The bank on Wednesday.
- Rose, 58, became CEO of card issuer Discover this year. He took up the role last December.In February, Capital One Aiming to acquire Discover Shares worth $35.3 billion.
- Rose submitted his resignation to Discover’s board of directors on Tuesday, effective April 1. According to the filing: Discover Inc. has approved discussions with the Securities and Exchange Commission. Discover Inc. announced that J. Michael Sheppard, a Discover Inc. director, will serve as interim CEO and president of the company and interim president of the bank.
Dive Insights:
in Detroit Based Ally Bank’s Mr. Rose succeeds Jeffrey J. Brown, who retired in January after nearly nine years in the role. Doug Timmerman, president of Ally Bank’s dealer financial services division, has been serving as interim CEO of the $196 billion-asset bank since then. Rose will take on the role of CEO next month and will also join Ally’s board of directors.
Riverwoods, Illinois-based Discover said in a filing announcing Rose’s resignation that he “was not expected to have a long-term role” at Discover following the card company’s merger with Capital One.
During an investor call in February detailing the Capital One acquisition, Rose said he would serve in an advisory role reporting to Capital One CEO Richard Fairbank for a year after the acquisition closes.
Executives expect the transaction to close later this year or early next year, pending regulatory approval.
Discover said in the filing that Rose will serve as an adviser to Sheppard until April 12 and will continue to receive a base salary for the remainder of his employment. Rose’s unvested stock awards will be forfeited and he will repay certain cash payments made to him by Discover, according to the filing.
At Ally, Rose will earn an annual base salary of $1 million, the company said in a statement. Wednesday’s filing with the SECThe total targeted incentive amount for fiscal year 2024 is $10.5 million, to be paid at the end of the fiscal year in the form of cash incentives (30%) and stock-based compensation (70%), with the stock compensation consisting of 60% performance-based stock units and 40% time-based restricted stock units.
Ally said in the filing that Rose will also receive a lump sum of $900,000 from Ally “to compensate him for certain compensation he is waiving or willing to forfeit in connection with the employment transition” and a stock grant valued at $16.2 million.
Sean Cole, president and founding partner of executive search firm Cowen Partners, said Capital One’s acquisition of Discover was likely a big reason for Rose’s move.
“It may not have been known to him during the interview process,” Cole said in an email Thursday. “Given the timing, it’s likely he was speaking with Ally as well as Discover.” [Then] I accepted the job at Discover and Ally reached out to me as soon as the merger was announced.”
Cole said such sudden executive changes could occur because of “significant” personality differences with the board or chairman, or because nonpublic information comes to light after someone takes over. It’s also possible that Allie was always Rose’s first choice but acted late and then courted him later, Cole said.
Rose’s departure leaves Discover without a leader once again amid a regulatory scrutiny over past business practices and a takeover bid by Capital One that has drawn criticism from lawmakers worried about concentration in the banking industry.
As Discover’s interim CEO, Shepherd will receive a base salary of $1.25 million and restricted stock unit awards valued at $5.75 million as of the grant date, which will vest upon the earlier of the closing of the merger with Capital One or one anniversary of the grant date, according to Discover’s filing.
Discover said Shepherd will remain a member of the company’s board of directors but will step down from the board’s risk oversight committee while serving as interim CEO and president. Joined Discover’s board of directors in August last yearThe company has been trying to get its risk and compliance issues under control and the abrupt departure of former CEO Roger Hochschild.
Prior to taking on the Discover role, Rose He has worked at TD for nearly 12 years and has been group head of Canadian consumer banking since January 2022.. He joined TD in 2011 to lead the company’s North American credit card and merchant services business and has nearly 25 years of experience in the financial services sector.
Shepherd is the former chairman and CEO of Bancwest and its subsidiary Bank of the West, which were recently acquired by BNP Paribas.
[ad_2]
Source link