Ally Financial has filled its CEO vacancy by hiring Michael Rhodes away from the top job at Discover Financial Services, which is in the process of being acquired by Capital One Financial.
Rhodes' tenure as Discover's chief executive is expected to end on April 1, just two months after he started at the Riverwoods, Illinois-based credit card company,
His departure introduces a new wrinkle to Capital One's $35 billion deal to acquire Discover, though Discover said in a securities filing Wednesday that Rhodes had not been expected to have a long-term role at Capital One following the merger's completion.
Following Rhodes' resignation, Discover named Michael Shepherd, the former Bank of the West chairman and CEO, as its interim president and CEO, effective April 1. Shepherd has been serving on Discover's board of directors since August 2023.
For Ally, the decision to hire Rhodes ends a six-month search for Jeffrey Brown's successor. Brown
Doug Timmerman, Ally's head of dealer financial services, has been serving as interim CEO since Brown's departure at the end of January.
"After an exhaustive search process, the board has chosen Michael to lead Ally into the next stage of its evolution," Ally Chairman Franklin Hobbs said Wednesday in a press release. "Our trust is grounded in his versatile consumer banking experience, his focus on using data and insights to drive decision-making, and his commitment to creating long-term value for our stockholders."
"Importantly to Ally, Michael understands the power of a motivated workforce. He knows supporting team members and investing in workplace culture is essential to the mission of any organization," Hobbs added.
Before joining Discover in February, Rhodes spent 12 years at TD Bank Group, where his most recent position was as group head of Canadian banking. He is scheduled to start at Ally on April 29.
Ally agreed to pay Rhodes an annual base salary of $1 million and a target annual award-incentive opportunity of $10.5 million in 2024.
Meanwhile, Discover said that Rhodes will not receive severance in connection with his resignation. He will pay back certain cash payments that he previously received, and his unvested equity awards will be forfeited, Discover said.
When
On Wednesday, Discover said that it was giving Shepherd the president and CEO titles on an interim basis, but it did not address what would happen in a scenario in which the Capital One merger does not get approved.
Capital One has said that it expects the Discover merger to close in late 2024 or early 2025. But the blockbuster deal
Between 2004 and 2023, Shepherd served in a variety of roles at Bank of the West and its French parent company. The San Francisco-based bank was sold last year to BMO Financial Group.
At Discover, Shepherd will continue to serve as a director, but he is resigning as a member of the board's risk oversight committee, the company said.
Shepherd's appointment as Discover's interim president and CEO marks the third change in leadership atop the company in just seven months. Last August,
Hochschild was replaced on an interim basis by Discover board member John Owen. Owen stayed in that role until Rhodes took over as CEO on February 1.
Discover said Wednesday that Shepherd will receive a $1.25 million base salary and a one-time award of restricted stock units with a grant date value of $5.75 million. The restricted stock units will vest on the earlier of two dates: the completion of the merger with Capital One or the one-year anniversary of their grant date, Discover said in its securities filing.
