Executive compensation soars despite tanking stocks

Salaries among senior executives at publicly traded auto finance companies were flat last year, but total compensation tripled to nearly $7 million, thanks to generous stock awards, according to an Auto Finance News analysis of U.S. Securities and Exchange Commission filings. Credit Acceptance Corp. (CAC) Chief Executive and President Kenneth Booth, who took over in May 2021, out-earned 29 other auto finance senior executives, taking home $30.5 million in base salary, stock options and other compensation — but no bonus. By comparison, Booth earned total compensation of $1.9 million as CAC’s chief financial officer in 2020. A trio of online lending execs also scored eight-figure stock awards. Shift Technologies co-CEOs George Arison and Toby Russell closed out 2021 with total compensation of $23.1 million, about 10 times their salaries in 2020. The bulk of their earnings stemmed from $21.1 million of stock and $1.5 million from a non-equity incentive plan. Earlier this year, Russell ceded the CEO role to Arison, though he retained his spot on the company’s board of directors. Meanwhile, Paul Hennessey, who stepped down as Vroom CEO , earned $18.3 million in total compensation last year, quadruple his $4.3 million salary in 2020. Hennessey’s compensation included $17.8 million of stock. The No. 5 earner last year was Ally CEO Jeffrey Brown, whose $9.6 million in stock options propelled his compensation to $15.5 million. By comparison, Brown earned $11.6 million in 2020. Three Credit Acceptance executives — Chief Analytics Officer Arthur Smith, Chief Sales Officer Daniel Ulatowski and former Chief Legal Officer Charles Pearce, who retired at yearend — also earned $9.6 million in stock awards last year. A fourth company executive, Chief Treasury Officer Douglas Busk, received $8.8 million in stock. Eleven industry executives collected stock awards in the $1 million to $2 million range. In all, the average stock award last year was $5.4 million, compared with $806,593 in 2020. That said, publicly traded auto finance stocks were a mixed bag last year. CAC’s stock led the pack, doubling to $669 per share at year-end 2021. Ally Financial ’s stock climbed 37%, while Nicholas Financial ’s increased 34%. But the stock prices of Vroom and Shift lost more than half their value last year. Vroom shares traded at $39.97 each at the start of the year, but they plummeted 72% to $11.11 by Dec. 30. Similarly, Shift shares plunged 58% to $3.48 each from $8.31. HyreCar and Carvana also posted year-over-year stock declines of 37% and 1%, respectively. When analyzing compensation strictly by base salary, Ally’s Brown topped the list at $1 million. CAC’s Booth ranked second with a base salary of $888,176, and Carvana President of Special Projects Tom Taira placed third at $877,500. Taira, a longtime auto finance executive, co-founded TrueCar and Propel AI, which was acquired by Carvana in 2018. The highest percent change in base salary was 65%, recorded by Shift’s Arison. His base pay for 2021 was $490,000. CAC’s Booth posted the second-highest base salary increase at 55%. In 2021, the average base salary among auto finance executives was $523,701, up 1% year over year. For U.S. companies broadly, CEO pay shot up 31% last year, according to Equilar , a provider of data on corporate leadership. Meanwhile, bonuses for auto finance executives took a hit last year. As in 2020, Ally, HyreCar , Nicholas and Shift were the only companies to dole out bonuses, but the average handout dropped 11% to $388,562. Ally’s Brown scored the highest bonus: $4.9 million. Three other Ally executives earned $1.8-million bonuses, while a fourth snared $980,000. The remaining bonuses ranged from $150,000 for Vroom’s newly minted CFO Robert Krakowiak to $8,953 for Nicholas Financial CFO Irina Nashtatik, who was the lowest-paid executive in 2021 at $306,029. It remains to be seen how senior executive compensation will fare in 2022, but if current equity trends are any indication, stock awards are on track to decline. Through end of trading May 19, auto finance stocks have dropped dramatically . Vroom shares have lost 87% of their value since the start of the year, while Carvana shares have plummeted 86% and HyreCar shares have plunged 76%. Ally and Credit Acceptance shares have posted 20% and 13% declines, respectively, while Nicholas Financial’s stock has fallen 17%. Perhaps base salaries and bonuses will increase, but chances are total compensation will dip next year. The 23rd annual Big Wheels Auto Finance Data 2022 report is now available, providing exclusive statistics on the auto lending and leasing industry and a ranking of the top 200 auto financiers in the nation. Order your report .

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