Under the Hood: Execs lose millions in compensation in 2022

Corporate layoffs and souring stock prices sheared tens of millions of dollars off auto finance executives’ compensation in 2022, according to an Auto Finance News analysis of filings with the U.S. Securities and Exchange Commission . Total compensation plunged 38% year over year to $67.2 million for 19 executives for whom full-year 2021 and 2022 data was available. Meanwhile, average compensation for the group fell to $3.5 million from $5.7 million YoY. Only one executive — Ally Financial Chief Executive Jeffrey Brown — had total compensation exceeding $10 million last year, down from eight executives in 2021. Even so, Brown’s compensation declined 7% to $14.4 million. Brown was one of nine senior executives whose total compensation declined year over year. Yet Credit Acceptance Corp. Chief Executive and President Kenneth Booth registered the greatest slump, by far. On a dollar basis, Booth’s total compensation package plummeted $29.5 million — 97% — to $1 million. Compensation for another CAC executive, Chief Analytics Officer Arthur Smith , was slashed $9.6 million — 93% — to $717,748. The YoY declines in compensation for Booth and Smith hinged on a lack of stock awards last year. Credit Acceptance’s stock closed out the year at $474.40 per share, compared with $648.84 on Jan. 3, 2022. In all, the company lost $2.4 billion in market capitalization. Even so, a pair of newly minted CAC senior executives — Chief Marketing and Product Officer Andrew Rostami and Chief Technology Officer Ravi Mohan — notched $7 million stock awards last year. Rostami joined the company in April 2022 and Mohan was hired in October 2022. Vroom ’s newly appointed Chief Executive Thomas Shortt was another senior executive whose compensation was propelled by stock awards. Shortt received $4.7 million in stock, plus a $2.4 million bonus, as part of his $7.8 million compensation package. Another five executives earned at least $5 million in compensation: Chief Executive Ernest Garcia III , Chief Financial Officer Mark Jenkins and Chief Operating Officer Benjamin Huston from Carvana , along with President Douglas Timmerman and President, Consumer and Commercial Banking, Diane Morais from Ally. When analyzing compensation strictly by base salary, Carvana’s Tom Taira , president of special projects, topped the list at $1.01 million. Ally’s Brown and CAC CEO and President Kenneth Booth shared the No. 2 spot at $1 million. Taira was the only Carvana executive whose base salary increased YoY. Garcia, Jenkins, Huston and Chief Product Officer Daniel Gill all recorded 57% declines in base salary last year. Carvana’s executive team announced in May 2022 that it would forgo salaries for the rest of the year to help fund severance pay for the 2,500 employees whose jobs it slashed on the heels of a $506 million first-quarter loss. Carvana subsequently laid off another 1,500 employees and recorded a nearly $3 billion yearend loss. The company’s stock price took a nosedive, closing the year at $4.74 per share, down from $239.63 on Jan. 3, 2022. Despite the liquidity issues that walloped Carvana, the five senior executives whose compensation was reported in SEC filings registered stock awards ranging from $726,677 to $1.3 million. Base-salary reductions notwithstanding, each notched increases in total compensation — 11% for Garcia and Gill, 12% for Huston and Jenkins, and 20% for Taira. Meanwhile, Shift Technologies , Vroom and HyreCar reduced executive compensation amid corporate woes. Among the three companies, average executive compensation plunged 75% to $1.7 million last year. At online used-car retailer Shift, CEO Jeff Clementz earned $2.5 million in total compensation last year, while COO Sean Foy and CFO Oded Shein each earned $1.1 million. But those salaries paled in comparison to the $23.1 million that George Arison and Toby Russell — Shift’s co-CEOs who left the company last year — took home in 2021. Vroom’s Paul Hennessy also left his CEO post last year. Hennessy earned $210,385 for the five months he worked in 2022, compared with $18.3 million of mostly stock compensation he made in 2021. The remaining Vroom senior executives earned between $515,582 and $2 million last year. Car-sharing marketplace HyreCar, which reported 2021 executive compensation last year, filed for bankruptcy protection in March. As such, executive pay for 2022 was largely unavailable. The company noted earlier this year that President Brian Allan had been fired, while Eduardo Iniguez was named CEO and AJ Lee was appointed COO. The two executives’ base salaries this year would be $450,000 and $350,000, respectively. A pair of Nicholas Financial executives reported the lowest total compensation among the group. CFO Irina Nashtatik earned $191,924, while Interim CEO Michael Rost , appointed in May, earned $177,770.

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