DETROIT — Ally Financial announced Monday that it will be appointing a new independent director to its board of directors. Along with this announcement, Ally Chairman Franklin W. Hobbs expressed his and Ally management’s frustration with how market perception has negatively affected Ally stock in spite of its strong performance in the auto finance market.
The new appointment, which is expected to happen no later than June 30, 2016, will expand the board to 12 members and will be identified in consultation with Lion Point capital and some of Ally’s other largest shareholders.
“We are frustrated with the market perception reflected in the price of Ally’s stock and the current discount to book does not reflect the inherent value of this company. Management expects to announce a number of new initiatives that will drive value creation over time and further position Ally for strong, long-term performance,” Hobbs said. “Being a disciplined steward of capital remains at the forefront of our decisions, and there is much more potential to be realized in this company. We are all aligned in our commitment to maximize shareholder value both operationally and strategically.”
The Ally board of directors also stated that, as of March 16, 2016, its bylaw that permits shareholders holding at least 25% of Ally common stock to call a special meeting has been amended to also allow for majority voting in uncontested director elections.
“Ally has the undergone tremendous transformations over the past several years, and today has the strongest auto finance franchise in the U.S., with a simple and clean balance sheet. Ally’s portfolio contains high-quality secured loans generated via strict underwriting standards and has demonstrated effective risk management and consistent profitability. Our leading direct bank also continues to grow in importance with several important new products to be rolled-out through the course of 2016,” Hobbs said.
To better align management and shareholders’ interests, Ally will be directly connecting the company’s financial and operational performance in its upcoming proxy. The Ally Board’s Compensation, Nominating and Governance Committee will continue to explore programs to further ensure the alignment of these interests.