DEPARTMENT OF THE TREASURY WASHINGTON, D.C. 20220 

 April 1, 2011 

Mr. James J. Duffy 

Chief Human Resources Officer 

Ally Financial Inc. 

1177 Avenue of the Americas 

New York, NY 10036 

Re: Compensation Payments and Structures for Senior Executive Officers 

and Most Highly Compensated Employees (“Covered Employees 1 – 25”) 

Dear Mr. Duffy: 

Pursuant to the Department of the Treasury’s Interim Final Rule on TARP Standards for 

Compensation and Corporate Governance,1

 the Office of the Special Master has completed its 

review of the 2011 compensation submission by Ally Financial Inc. (“Ally”), on behalf of its 

senior executive officers and next 20 most highly compensated employees (“Covered Employees 

1 – 25” or “Covered Employees”). Attached as Annex A is a determination memorandum 

(accompanied by Exhibits I and II) providing the determinations of the Office of the Special 

Master with respect to 2011 compensation for Covered Employees 1 – 25. 31 C.F.R. 

§ 30.16(a)(3)(i). 

The Interim Final Rule requires the Office of the Special Master to determine whether the 

compensation structure for each Covered Employee 1 – 25 “will or may result in payments that 

are inconsistent with the purposes of Section 111 of EESA or TARP,2

 or are otherwise contrary 

to the public interest” (as applied to Covered Employees of exceptional assistance recipients, the 

“public interest standard”). Id. The Office of the Special Master must make such determinations 

by applying six principles: avoid incentives to take excessive risk, maximize the company’s 

ability to repay the taxpayer, appropriately allocate the components of compensation, use 

performance-based compensation, employ pay structures and amounts that are consistent with 

those at comparable entities, and base pay on the employee’s contribution to the value of the 

TARP recipient enterprise. Id. These principles are discussed in further detail in Annex A. 

To apply the six principles and ensure that compensation structures satisfy the public 

interest standard, the Office of the Special Master developed practical guidelines (“guidelines”), 

which were identified in the determination letters issued by the Office of the Special Master on 

 

1

 The Interim Final Rule and all determination letters issued by the Office of the Special Master are available at 

www.financialstability.gov (click on “About Financial Stability”, then click on “Plan”, then scroll down to the 

second-to-last link and click on “Executive Compensation Guidance”). 2

 These purposes are “maximization of overall returns to the taxpayers of the United States and providing stability 

and preventing disruptions to financial markets”. 31 C.F.R. § 30.16(b)(1). 
2 

October 22, 2009, and March 23, 2010, relating to 2009 and 2010 compensation, respectively.3

 

Compensation in 2011 at the four remaining recipients of exceptional assistance must continue to 

comport with these guidelines, which generally include the following: 

 Limit guaranteed cash. The majority of each Covered Employee’s base salary should be 

paid in the form of stock that will immediately vest as earned, but will be redeemable 

only in three equal, annual installments beginning on the second anniversary of the date 

stock salary is earned (or the first anniversary if the TARP recipient has begun to repay 

its obligations). Although the Interim Final Rule limits incentives to one-third of annual 

compensation, the use of stock salary, as contemplated by the Interim Final Rule, 

provides a performance component for a portion of the employee’s base compensation. 

Base salary paid in cash should in most cases not exceed $500,000. 

 Require that incentives be contingent on performance. Incentive compensation should be 

based on measurable performance goals that are designed by, and the achievement of 

which is determined by, the company’s independent compensation committee. 

 Focus on long-term value creation. A significant amount of compensation should reflect 

a company’s long-term performance and value. In most circumstances a large proportion 

of compensation should be held or deferred for a period of at least three years. 

 Minimal perquisites. Compensation structures that are not aligned with shareholder and 

taxpayer interests in the firm should be minimized or eliminated. 

In applying the above guidelines, the Office of the Special Master has implemented certain 

restrictions on practices that present conflicting incentives. For example, Covered Employees 

are prohibited from engaging in any hedging or derivative transactions involving company stock 

that would undermine the long-term performance incentives created by the approved 

compensation structures. 

Finally, the determinations of the Office of the Special Master take into account the 

requirements of the Interim Final Rule that generally apply to all TARP recipients whether or not 

they are subject to the jurisdiction of the Office of the Special Master: (a) prohibition of all 

bonuses and incentives, including cash bonuses and stock options (the only exception to the 

fixed-compensation-only rule is the ability to award a bonus in the form of long-term restricted 

stock that does not exceed one-third of compensation in the year of grant, has a minimum vesting 

period of two years and cannot be transferred by the employee, even if fully vested, earlier than 

pursuant to a schedule that reflects the company’s actual repayment of TARP obligations in 25% 

 

3

 In this determination letter, the terms “public interest standard”, “principles” and “guidelines” have distinct 

meanings. The term “public interest standard” refers to the determination standard laid out in the Interim Final 

Rule. The term “principles” refers to the six principles (listed above and further described in Annex A) that the 

Interim Final Rule instructs the Office of the Special Master to apply in determining whether compensation meets 

the public interest standard. The term “guidelines” refers to the practical guidelines developed by the Office of the 

Special Master to implement the principles and ensure satisfaction of the public interest standard. In addition, the 

term “Office of the Special Master” is used consistently to refer to the Office or the defined term “Special Master” 

as used in the Interim Final Rule. 

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ANNEX A 

DETERMINATION MEMORANDUM 

I. INTRODUCTION

The Emergency Economic Stabilization Act of 2008, as amended by the American 

Recovery and Reinvestment Act of 2009 (“EESA”), requires the Secretary of the Treasury to 

establish standards related to executive compensation and corporate governance for institutions 

receiving financial assistance under the Troubled Asset Relief Program (“TARP”). Emergency 

Economic Stabilization Act of 2008, 12 U.S.C. §5221 (2010). Through the Department of the 

Treasury’s Interim Final Rule on TARP Standards for Compensation and Corporate Governance 

(the “Rule”), the Secretary delegated to the Office of the Special Master for TARP Executive 

Compensation (the “Office of the Special Master”) responsibility for reviewing compensation 

structures of certain employees at institutions that received exceptional financial assistance under 

TARP (“Exceptional Assistance Recipients”).4

 31 C.F.R. § 30.16(a); id. § 30.16(a)(3). For these 

employees, the Office of the Special Master must determine whether the compensation structure 

will or may result in payments “inconsistent with the purposes of Section 111 of EESA or 

TARP, or...otherwise contrary to the public interest.” Id. § 30.16(a)(3)(i). 

Ally Financial Inc. (“Ally” or the “Company”), one of four remaining Exceptional 

Assistance Recipients, has submitted to the Office of the Special Master proposed 2011 

compensation structures (the “Proposed Structures”) for review pursuant to Section 

30.16(a)(3)(i) of the Rule. These compensation structures apply to five employees that the 

Company has identified for 2011 as senior executive officers (the “Senior Executive Officers,” 

or “SEOs”) for purposes of the Rule, and 20 employees the Company has identified as among 

the most highly compensated employees of the Company for purposes of the Rule (the “Most 

Highly Compensated Employees,” and, together with the SEOs, the “Covered Employees”). 

The Office of the Special Master has completed the review of the Company’s Proposed 

Structures for the Covered Employees pursuant to the principles set forth in the Rule. Id. 

§ 30.16(b)(1). This Determination Memorandum sets forth the determinations of the Office of 

the Special Master, pursuant to Section 30.16(a)(3)(i) of the Rule, with respect to the Covered 

Employees. 

II. BACKGROUND

On June 15, 2009, the Department of the Treasury (“Treasury”) promulgated the Rule, 

creating the Office of the Special Master and delineating its responsibilities. The Rule requires 

that each Exceptional Assistance Recipient submit proposed compensation structures for each 

Senior Executive Officer and Most Highly Compensated Employee. 31 C.F.R. § 30.16(a)(3)(i). 

 

4

 The Interim Final Rule on TARP Standards for Compensation and Corporate Governance, technical corrections to 

the Rule and all Prior Determinations are available on the Department of the Treasury website at 

http://www.treasury.gov/initiatives/financial-stability/about/Recipient_Guidance/executivecompensation/Pages/default.aspx. 
A2 

On October 22, 2009, and on March 23, 2010, in each case after reviewing submissions 

of proposed compensation structures and amounts from Ally, the Office of the Special Master 

issued determinations regarding Ally’s compensation structures, and amounts potentially payable 

thereunder, for Ally’s senior executive officers and certain most highly compensated employees 

(the “Prior Determinations”). The Prior Determinations were made in light of six principles 

defined in the Rule and discussed in Part III below (the “principles”), and proposed 

compensation structures for Covered Employees were modified as needed to ensure that 

compensation would not “result in payments that are inconsistent with the purposes of Section 

111 of EESA or TARP, or are otherwise contrary to the public interest” (as applied to Covered 

Employees of Exceptional Assistance Recipients, the “public interest standard”). 31 C.F.R. 

§ 30.16(a)(3)(i). To apply the principles and ensure that compensation structures satisfy the 

public interest standard, the Office of the Special Master developed practical guidelines (the 

“guidelines”), which informed the Prior Determinations and are described in the cover letter 

accompanying this Determination Memorandum.5

 The Prior Determinations applied only to 

those individuals identified by the Company as subject to the Office of the Special Master’s 

mandatory jurisdiction to review and approve compensation structures and payments, see id., for 

the period under review and only with respect to compensation for services provided to Ally for 

that period. 

On January 3, 2011, the Office of the Special Master requested from each remaining 

Exceptional Assistance Recipient, including Ally, certain data and documentary information 

necessary to facilitate the Office of the Special Master’s review of the Company’s 2011 

compensation structures. The request required Ally to submit data describing its proposed 

compensation structures, and the payments that would result from the proposals, concerning each 

Covered Employee. 

In addition, the Rule authorizes the Office of the Special Master to request information 

from an Exceptional Assistance Recipient “under such procedures as the Special Master shall 

determine.” Id. § 30.16(d). Ally was required to submit competitive market data indicating how 

the amounts payable under Ally’s proposed compensation structures relate to the amounts paid to 

persons in similar positions or roles at similar entities. Ally was also required to submit a range 

of documentation, including information related to proposed performance metrics, internal 

policies designed to curb excessive risk, and certain previously existing compensation plans and 

agreements. 

Ally submitted this information to the Office of the Special Master on February 7, 2011. 

Following a preliminary review of the submission, on February 11, 2011, the Office of the 

Special Master determined that Ally’s submission was substantially complete for purposes of the 

Rule. Id. § 30.16(a)(3)(i). The Office of the Special Master then commenced a formal review of 

Ally’s proposed compensation structures for the Covered Employees. The Rule provides that the 

Office of the Special Master is required to issue a compensation determination within 60 days of 

receipt of a substantially complete submission. Id.

 

5

 For a further discussion of the guidelines, see pages 9 – 10 of the September 10, 2010, Final Report of Special 

Master Kenneth R. Feinberg, available at http://www.treasury.gov/initiatives/financialstability/about/Recipient_Guidance/executivecompensation/Documents/Final%20Report%20of%20Kenneth%20Feinberg%20-%20FINAL.PDF. 
A3 

The Office of the Special Master’s review of the Company’s proposals was aided by 

analysis from a number of internal and external sources, including: 

 Treasury personnel with significant experience related to executive compensation 

detailed to the Office of the Special Master; 

 Competitive market data provided by the Company in connection with its submission to 

the Office of the Special Master; 

 External information on comparable compensation structures extracted from the U.S.

Mercer Benchmark Database-Executive; and 

 Equilar’s ExecutiveInsight database (which includes information drawn from publicly 

filed proxy statements). 

The Office of the Special Master has also considered national and global developments in 

the regulation of executive compensation. In July 2010, Congress passed the Dodd-Frank Wall 

Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), directing further regulation 

on incentive-based compensation. In February 2011, the FDIC approved a joint proposed 

rulemaking with six other agencies under the Dodd-Frank Act, mandating, among other things, 

the deferral of half of large banks’ top executive bonuses. The SEC recently approved its 

version of the proposed rule.6

 The Office of the Special Master continues to monitor evolving 

standards for executive compensation. 

The Office of the Special Master considered all the sources above, in light of the statutory 

and regulatory standards described in Part III below, when evaluating the Company’s proposed 

compensation structures for the Covered Employees for 2011. 

III. STATUTORY AND REGULATORY STANDARDS

The Rule requires that the Office of the Special Master determine for each of the Covered 

Employees whether Ally’s proposed compensation structure, including amounts payable or 

potentially payable under the compensation structure, “will or may result in payments that are 

inconsistent with the purposes of Section 111 of EESA or TARP, or are otherwise contrary to the 

public interest.” 31 C.F.R. § 30.16(a)(3). The Rule requires that, in making these compensation 

determinations, the Office of the Special Master shall apply six principles that are intended to be 

consistent with sound compensation practices appropriate for TARP recipients and to advance 

the purposes and considerations described in EESA, including the maximization of overall 

returns to the taxpayers of the United States and providing stability and preventing disruptions to 

financial markets. EESA, Pub. L. No. 110-343 §2, §103 (2008). These principles are: 

 

6 See SEC Press Release No. 2011-77 (March 30, 2011). Internationally, the EU adopted a directive on 

remuneration policies which was further implemented in guidelines released in December 2010. The UK issued its 

final regulations under those guidelines in the same month. These developments may be considered a response to 

the meeting of the G20 in April 2009, and also more broadly as a response to the financial crisis and changing views 

on the regulation of executive compensation. Generally, the principles underlying the emerging regulations are 

consistent with the objectives of the Office of the Special Master. 
A4 

(1) Avoidance of incentives to take excessive risk. The compensation structure should avoid 

incentives that encourage employees to take unnecessary or excessive risks that could 

threaten the value of the Exceptional Assistance Recipient, including incentives that 

reward employees for short-term or temporary increases in value or performance, or 

similar measures that may undercut the long-term value of the Exceptional Assistance 

Recipient. Compensation packages should be aligned with sound risk management. Id. § 

30.16(b)(1)(i). 

(2) Taxpayer return. The compensation structure and amount payable should reflect the 

need for the Exceptional Assistance Recipient to remain a competitive enterprise, to 

retain and recruit talented employees who will contribute to the recipient’s future success, 

so that the Company will ultimately be able to repay its TARP obligations. Id.

§ 30.16(b)(1)(ii). 

(3) Appropriate allocation of components of compensation. The compensation structure 

should appropriately allocate the components of compensation such as salary and shortterm and long-term performance incentives, as well as the extent to which compensation 

is provided in cash, equity, or other types of compensation such as executive pensions, or 

other benefits, or perquisites, based on the specific role of the employee and other 

relevant circumstances, including the nature and amount of current compensation, 

deferred compensation, or other compensation and benefits previously paid or awarded. 

Id. § 30.16(b)(1)(iii). 

(4) Performance-based compensation. An appropriate portion of the compensation should 

be performance-based over a relevant performance period. Performance-based 

compensation should be determined through tailored metrics that encompass individual 

performance and/or the performance of the Exceptional Assistance Recipient or a 

relevant business unit taking into consideration specific business objectives. 

Performance metrics may relate to employee compliance with relevant corporate policies. 

In addition, the likelihood of meeting the performance metrics should not be so great that 

the arrangement fails to provide an adequate incentive for the employee to perform, and 

performance metrics should be measurable, enforceable, and actually enforced if not met. 

Id. § 30.16(b)(1)(iv). 

(5) Comparable structures and payments. The compensation structure, and amounts payable 

where applicable, should be consistent with, and not excessive taking into account, 

compensation structures and amounts for persons in similar positions or roles at similar 

entities that are similarly situated, including, as applicable, entities competing in the same 

markets and similarly situated entities that are financially distressed or that are 

contemplating or undergoing reorganization. Id. § 30.16(b)(1)(v). 

(6) Employee contribution to TARP recipient value. The compensation structure and amount 

payable should reflect the current or prospective contributions of an employee to the 

value of the Exceptional Assistance Recipient, taking into account multiple factors such 

as revenue production, specific expertise, compliance with company policy and 

regulation (including risk management), and corporate leadership, as well as the role the 
A5 

employee may have had with respect to any change in the financial health or competitive 

position of the recipient. Id. § 30.16(b)(1)(vi). 

The Rule provides that the Office of the Special Master shall have discretion to determine 

the appropriate weight or relevance of a particular principle depending on the facts and 

circumstances surrounding the compensation structure or payment for a particular employee. Id. 

§ 30.16(b). To the extent two or more principles may appear inconsistent in a particular 

situation, the Rule requires that the Office of the Special Master exercise discretion in 

determining the relative weight to be accorded to each principle. Id.

The Rule provides that the Office of the Special Master may, in the course of applying 

these principles, take into account other compensation structures and other compensation earned, 

accrued, or paid, including compensation and compensation structures that are not subject to the 

restrictions of Section 111 of EESA. For example, the Office of the Special Master may 

consider payments obligated to be made by the Company pursuant to certain legally binding 

rights under valid written employment contracts entered into prior to enactment of the statute and 

the accompanying Rule. Id. § 30.16(a)(3). 

IV. COMPENSATION STRUCTURES AND PAYMENTS

A. Ally Proposals

Ally has provided the Office of the Special Master with detailed information concerning 

its proposed 2011 compensation structures for the Covered Employees, including amounts 

proposed to be paid under the compensation structure for each Covered Employee (the 

“Proposed Structures”). 

Ally supported its proposal with detailed assessments of each Covered Employee’s tenure 

and responsibilities at the Company and historical compensation structure. The submission also 

included market data that, according to the Company, indicated that the amounts potentially 

payable to each employee were comparable to the compensation payable to persons in similar 

positions or roles at a “peer group” of entities selected by the Company.7

 Seventeen of the 

employees listed as Covered Employees in 2010 remain on the list of Covered Employees for 

2011, and eight employees are new entrants to the group. 

1. Cash Salary 

The Proposed Structures for Covered Employees include cash salaries of more than 

$500,000 for fourteen Covered Employees. In addition, Ally proposed raising cash salaries for 

seventeen Covered Employees. Ally suggested that the proposed cash salary increases could be 

justified by the exceptional performance of the Covered Employees in the past year and noted 

 

7

 As disclosed in its Form 10-K filed with the SEC on February 25, 2011, among the comparator companies 

submitted by Ally with respect to one or more of its Covered Employees were AFLAC Inc., American Express 

Company, Capital One Financial Corporation, CIT Group Inc., Genworth Financial, Inc., Hartford Financial 

Services, MetLife Inc., Prudential Financial Inc., SunTrust Banks, Inc., U.S. Bancorp, Unum Group, and Wells 

Fargo & Company. 
A6 

that total direct compensation for many of these employees had been frozen at the same level 

from 2009 to 2010. 

 2. Stock Salary

Ally proposed that Covered Employees receive substantial stock salary for 2011 in 

amounts ranging from to $300,000 to $3,000,000. As required by the Rule, the stock units 

proposed to be used for stock salary would be fully vested upon grant. 

 3. Annual Long-Term Incentive Awards

Ally proposed target annual long-term incentive awards representing over 30% of 

aggregate 2011 compensation for the Covered Employees. These awards are payable in longterm restricted stock units that generally vest only if the Covered Employee remains employed 

by the Company on the third anniversary of the grant date. As required by the Rule, these 

awards would become payable only in 25% installments for each 25% of Ally’s TARP 

obligations that are repaid. 

 4. “Other” Compensation and Perquisites

Ally proposed payments of “other” compensation, as well as perquisites, to the Covered 

Employees. These proposed payments varied in value. 

B. Determinations of the Office of the Special Master

The Office of the Special Master has reviewed the Proposed Structures in detail by 

application of the six principles set forth in the Rule and described in Part III above. The Office 

of the Special Master’s review also made use of the resources described in Part II. In order to 

consistently apply the principles and ensure the satisfaction of the public interest standard, the 

Office of the Special Master has determined that the guidelines established in 2009, and applied 

in 2010, must continue to govern compensation in 2011. 

After reviewing the Proposed Structures, the Office of the Special Master has concluded 

that they are in most respects consistent with the guidelines. However, certain aspects of the 

Proposed Structures and amounts potentially payable under the Proposed Structures require 

modification to ensure that they are consistent with the public interest standard. 

The Office of the Special Master has determined, in light of the considerations that 

follow, that the compensation structures described in Exhibits I and II to this Determination 

Memorandum will not, by virtue of either their structural design or the amounts potentially 

payable under them, result in payments inconsistent with the public interest standard.8

 

8

 To the extent the Office of the Special Master previously approved compensation packages proposed in 

employment agreements submitted to the Office of the Special Master by the Company in 2010, the Office of the 

Special Master’s 2011 determinations reflect the previously approved structures and amounts. See Letter to James J. 

Duffy, (August 3, 2010), available at http://www.treasury.gov/initiatives/financial-
A7 

1. Cash Salary

The Office of the Special Master reviewed Ally’s proposed cash salaries in light of the 

principle that compensation structures should generally be comparable to “compensation 

structures and amounts for persons in similar positions or roles at similar entities,” 31 C.F.R. 

§ 30.16(b)(1)(v). Based in part upon this principle, the Office of the Special Master has 

concluded that cash salaries generally should target the 50th percentile as compared to persons in 

similar positions or roles at similar entities, because such levels of cash salaries balance the need 

to attract and retain talent with the need for compensation structures that reflect the 

circumstances of Exceptional Assistance Recipients. The Office of the Special Master noted, 

however, that in the case of Ally, almost all the Covered Employees are newly recruited to the 

Company. Thirteen of the 25 Covered Employees have been with the Company less than two 

years, and all but two have tenure under five years. In part for this reason, the Office of the 

Special Master has made certain exceptions resulting in compensation levels above the 50th

percentile. 

The Office of the Special Master also reviewed Ally’s proposed cash salaries in light of 

the principle that compensation structures should be “performance-based over a relevant 

performance period.” Id. § 30.16(b)(1)(iv). Based in part upon this principle, the Office of the 

Special Master has determined that, other than in exceptional cases for good cause shown, a 

Covered Employee’s cash salary should not exceed $500,000. 

After reviewing Ally’s proposal, the Office of the Special Master has determined that, in 

general, the proposed cash salaries target the 50th percentile of cash salaries paid to persons in 

similar positions or roles at similar entities, or are appropriate given the individual circumstances 

of the relevant Covered Employee. The Office of the Special Master has also concluded that, 

with respect to the proposed cash salary increases, certain increases are appropriate in light of the 

excellent performance of the affected employees and the cash salaries paid to individuals in their 

peer group. The Office of the Special Master has determined, however, that the full amount of 

the proposed increases was not justified. The cash salaries that the Office of the Special Master 

has determined are consistent with the public interest standard for the Covered Employees are set 

forth in Exhibit I. 

 2. Stock Salary

The Office of the Special Master reviewed the amount of stock salary Ally proposed to 

pay the Covered Employees in light of the principle that “an appropriate portion of the 

compensation should be performance-based over a relevant performance period.” Id.

§ 30.15(b)(1)(iv). The Office of the Special Master found that the amounts of stock salary 

proposed, in proportion to total compensation, were generally appropriate. However, in light of 

the principles that compensation structures should generally be comparable to “compensation 

structures and amounts for persons in similar positions or roles at similar entities,” id. 

§ 30.16(b)(1)(v), and that a “compensation structure, and amount payableshould reflect the 

current or prospective contributions of an employee to the value of the [Company],” id.

 stability/about/Recipient_Guidance/executivecompensation/Documents/20100803%20Ally%20Supplemental%20Determination.pdf. 
A8 

§ 30.16(b)(1)(vi), the Office of the Special Master concluded that, in certain cases, the proposed 

stock salary amount was not justified and must be reduced in accordance with a reduction in total 

direct compensation. The stock salaries that the Office of the Special Master has determined are 

consistent with the public interest standard for 2011 are set forth in Exhibit I. 

The Office of the Special Master reviewed the structure of Ally’s proposal for stock 

salary in light of the principle that compensation structures should align performance incentives 

with long-term value creation rather than short-term profits. See id. § 30.16(b)(1)(i). In light of 

this principle, stock salary may be redeemable only in three equal, annual installments beginning 

on the second anniversary of grant (or the first anniversary if the TARP recipient has begun to 

repay its obligations). The Proposed Structures are consistent with this requirement. Moreover, 

on March 2, 2011, Treasury sold all of its trust preferred securities in Ally, resulting in the 

repayment of approximately $2.67 billion to Treasury. Accordingly, each redemption date of 

2011 stock salary may be accelerated by one year.9

 3. Annual Long-Term Incentive Awards

The Office of the Special Master reviewed Ally’s proposed annual target long-term 

incentive awards in light of the principle that performance-based compensation should be 

payable “over a relevant performance period.” Id. § 30.16(b)(1)(iv). Based in part upon this 

principle, long-term incentives must be paid in the form of long-term restricted stock, and may 

be paid only if objective performance metrics are achieved and the employee continues to 

provide services to the company for three years following the date of grant.10

The structure of Ally’s proposed annual long-term incentive awards generally satisfies 

these requirements. Under the Proposed Structures, annual long-term incentive awards for 2011 

will be payable only upon the achievement of specified, objective performance criteria to be 

provided to the Office of the Special Master and generally only if the employee continues to 

provide services to the Company for three years following the date of grant. In addition, as 

required by the Rule, these awards may be redeemed only in 25% installments for each 25% of 

Ally’s TARP obligations that are repaid. 

The Office of the Special Master also reviewed the target amounts of annual long-term 

incentive awards Ally proposed for the Covered Employees in light of the principle that an 

“appropriate portion of the compensation should be performance-based,” id. § 30.16(b)(1)(iv), 

and “performance metrics should be measurable, enforceable, and actually enforced if not met.” 

Id. The Proposed Structures were generally consistent with this principle. Ally’s proposed 

target amounts were a substantial portion of total direct compensation, in many cases close to 

one third of total direct compensation. However, in light of the principle that compensation 

 

9

 For the avoidance of doubt, the redemption of stock salary issued by Ally in 2009 and 2010 under the Prior 

Determinations, which was redeemable in five, equal annual installments beginning on the first anniversary of grant 

pursuant to Ally’s request, is not accelerated. 

10 In line with the proposed rulemaking under the Dodd-Frank Act referenced above, and in conformity with the 

minimum two-year vesting requirement of the Rule, pro rata vesting of long-term incentive awards for 2011 services 

will be permitted after two years, allowing two-thirds of the award to vest after two years, with the last third vesting 

on the third anniversary of the date of grant. 
A9 

structures should generally be comparable to “compensation structures and amounts for persons 

in similar positions or roles at similar entities,” id. § 30.16(b)(1)(v), the Office of the Special 

Master concluded that, in certain cases, the proposed long-term incentive award amount was not 

justified and must be reduced in accordance with a reduction in total direct compensation. The 

target annual long-term incentive awards that the Office of the Special Master has determined are 

consistent with the public interest standard for 2011 are set forth in Exhibit I. 

 4. “Other” Compensation and Perquisites

Perquisites and “other” compensation provided to a Covered Employee must be limited 

to $25,000 on an annual basis. The Proposed Structures are consistent with this requirement. As 

described in Exhibit II, any exceptions to this limitation will require that the Company provide 

to the Office of the Special Master an independent justification for the payment that is 

satisfactory to the Office of the Special Master. To the extent that payments exceeding this 

limitation have already been made to a Covered Employee in 2011, those amounts should be 

promptly returned to the Company. 

 5. Non-Qualified Deferred Compensation

Covered Employees must not accrue in 2011 additional amounts under supplemental 

executive retirement plans and other “non-qualified deferred compensation” plans, as described 

in Exhibit II. 

 6. Severance Plans

The Company must ensure that 2011 compensation structures for Covered Employees do 

not result in an increase in the amounts payable pursuant to severance arrangements. 

V. CORPORATE GOVERNANCE 

As noted in Part III above, the Rule requires the Office of the Special Master to consider 

the extent to which compensation structures are “performance-based over a relevant performance 

period,” 31 C.F.R. § 30.16(b)(1)(iv). In light of the importance of this principle, as in the Prior 

Determinations, the Office of the Special Master requires that Ally take certain corporate 

governance steps to ensure that the compensation structures for the Covered Employees, and the 

amounts payable or potentially payable under those structures, are consistent with the public 

interest standard. Among other requirements, Ally must: 

 Ensure that employees are prohibited from engaging in any hedging or derivative 

transaction with respect to Company stock that would undermine the long-term 

performance incentives created by the compensation structures set forth in 

Exhibits I and II. 

 Maintain a compensation committee composed exclusively of independent directors, 

which must discuss, evaluate, and review with Ally’s senior risk officers any risks that 

could threaten the value of Ally. Id. § 30.4; id. § 30.5. 
A10 

 Ensure that the compensation committee discloses to Treasury an annual narrative 

description of whether Ally, its board of directors, or the committee has engaged a 

compensation consultant during the past three years and, if so, the types of services 

provided by the compensation consultant or any affiliate, including any “benchmarking” 

or comparisons employed to identify certain percentile levels of pay. Id. § 30.11(c). 

 Provide to Treasury an annual disclosure of any perquisite whose total value for Ally’s 

fiscal year exceeds $25,000 for each of the Covered Employees, as well as a narrative 

description of the amount and nature of these perquisites, the recipient of these 

perquisites and a justification for offering these perquisites (including a justification for 

offering the perquisite, and not only for offering the perquisite with a value that exceeds 

$25,000). Id. § 30.11(b). 

 Ensure that any incentive award paid to a Covered Employee is subject to a clawback if 

the award was based on materially inaccurate financial statements (which term includes, 

but is not limited to, statements of earnings, revenues, or gains) or any other materially 

inaccurate performance metric criteria. Ally must exercise its clawback rights except to 

the extent that it is unreasonable to do so. Id. § 30.8. 

 Ally was required to adopt an excessive or luxury expenditures policy, provide that 

policy to Treasury, and post it on Ally’s website. If Ally’s board of directors makes any 

material amendments to this policy, within ninety days of the adoption of the amended 

policy, the board of directors must provide the amended policy to Treasury and post the 

amended policy on its Internet website. Id. § 30.12. 

 Except as explicitly permitted under the Rule, Ally is prohibited from providing 

(formally or informally) tax gross-ups to any of the Covered Employees. Id. § 30.11(d). 

 Ally’s chief executive officer and chief financial officer must provide written 

certification of the Company’s compliance with the various requirements of Section 111 

of EESA. The precise nature of the required certification is identified in the Rule. 

Id. § 30.15 App. B. 

VI. CONCLUSION

The Office of the Special Master has reviewed the Proposed Structures for the Covered 

Employees for 2011 and, in light of the principles, applied the guidelines in order to ensure the 

satisfaction of the public interest standard. On the basis of that review, the Office of the Special 

Master has determined that the Proposed Structures submitted by Ally are to a great extent 

consistent with the Prior Determinations but require certain modifications in order to meet the 

public interest standard. 

The Office of the Special Master has reviewed the compensation structures set forth in 

Exhibits I and II in light of the principles set forth at 31 C.F.R. § 30.16(b). Pursuant to the 

authority vested in the Office of the Special Master by the Rule, and in accordance with Section 

30.16(a)(3) thereof, the Office of the Special Master hereby determines that the compensation 
A11 

structures set forth in Exhibits I and II, including the amounts payable or potentially payable 

under such compensation structures, will not result in payments that are inconsistent with the 

purposes of Section 111 of EESA or TARP, and will not otherwise be contrary to the public 

interest. 

Pursuant to the Interim Final Rule, Ally may, within 30 days of the date hereof, request in 

writing that the Office of the Special Master reconsider the determinations set forth in this 

Determination Memorandum. The request for reconsideration must specify a factual error or 

relevant new information not previously considered, and must demonstrate that such error or lack 

of information resulted in a material error in the initial determinations. If Ally does not request 

reconsideration within 30 days, the determinations set forth herein will be treated as final 

determinations. Id. § 30.16(c)(1). 

The foregoing determinations are limited to the compensation structures and employees 

described in Exhibits I and II, and shall not be relied upon with respect to any other employee. 

The determinations are limited to the authority vested in the Office of the Special Master by 

Section 30.16(a)(3)(i) of the Rule, and shall not constitute, or be construed to constitute, the 

judgment of the Office of the Special Master or Treasury with respect to the compliance of any 

compensation structure with any other provision of the Rule. Moreover, this Determination 

Memorandum has relied upon, and is qualified in its entirety by, the accuracy of the materials 

submitted by the Company to the Office of the Special Master, and the absence of any material 

misstatement or omission in such materials. 

Finally, the foregoing determinations are limited to the compensation structures described 

herein, and no further compensation of any kind payable to any Covered Employee without the 

prior approval of the Office of the Special Master would be consistent with the public interest 

standard. 
E1 

Employee ID Cash Salary 

Stock Salary 

(Performance based: The 

stock vests at grant and is 

redeemable in three equal, 

annual installments 

beginning on the first 

anniversary of grant.)

Long-Term Restricted Stock 

(Performance based: Awarded 

based on achievement of 

objective performance goals. 

Generally vests after 3 years of 

service. Transferability dependent 

on TARP repayment.) 

Total Direct 

Compensation 

(Cash salary + stock 

salary + long-term 

restricted stock.)

280677 $0 $8,000,000 $1,500,000 $9,500,000 

102645 $600,000 $2,858,238 $1,729,119 $5,187,357 

104428 $391,000 $1,582,979 $986,989 $2,960,968 

105336 $500,000 $1,000,000 $750,000 $2,250,000 

118980 $400,000 $300,000 $300,000 $1,000,000 

141296 $491,000 $1,112,652 $801,826 $2,405,478 

151695 $550,000 $1,883,618 $1,216,809 $3,650,427 

166144 $500,000 $900,000 $687,471 $2,087,471 

197253 $500,000 $1,941,667 $1,162,163 $3,603,830 

265967 $600,000 $2,350,000 $1,393,678 $4,343,678 

272446 $491,000 $1,034,000 $666,000 $2,191,000 

339212 $600,000 $4,735,633 $2,667,816 $8,003,449 

354392 $450,000 $1,000,000 $724,943 $2,174,943 

391076 $500,000 $1,133,333 $780,919 $2,414,252 

546145 $500,000 $1,931,520 $1,215,760 $3,647,280 

567303 $500,000 $1,300,000 $803,414 $2,603,414 

682168 $600,000 $3,183,333 $1,841,495 $5,624,828 

707713 $550,000 $1,353,825 $951,913 $2,855,738 

710047 $500,000 $1,300,000 $900,000 $2,700,000 

725547 $500,000 $1,237,624 $868,812 $2,606,436 

805106 $500,000 $2,208,333 $1,300,000 $4,008,333 

921597 $500,000 $1,149,872 $569,837 $2,219,709 

931656 $491,000 $1,182,915 $836,958 $2,510,873 

960277 $500,000 $1,500,000 $1,000,000 $3,000,000 

964006 $491,000 $2,391,667 $1,374,363 $4,257,030 

 Overall: Overall cash decreased $4.1 million or 25% and total direct compensation increased 

$2.3 million or 2.7%

EXHIBIT I

COVERED EMPLOYEES

2011 Compensation

Company Name: Ally Financial Inc.

Comparison of 2011 compensation to prior year compensation for the employees listed above

Note 2: The total number of Covered Employees may be less than 25 because of separations from service since January 1, 2011.

Note 1: Pursuant to the Office of the Special Master’s 2010 Determination Letter, the amount of long-term restricted stock ultimately approved 

for fiscal year 2010 included an additional $12.5 million for a total of $25 million.

 The 17 executives remaining in the top 25 from 2010: Cash salaries increased approximately 

$741,000 or 9.8% and total direct compensation increased $3.0 million or 4.7%.

 The 8 executives new to the top 25 in 2011: Overall cash compensation decreased $4.9 

million or 56% and total direct compensation decreased approximately $671,000 or 3.0% from 2010.
E2 

EXHIBIT II 

TERMS AND CONDITIONS OF PAYMENTS AND STRUCTURES 

CONSISTENT WITH THE PUBLIC INTEREST STANDARD

The following general terms and conditions shall govern the compensation structures described in Exhibit I. The 

Office of the Special Master’s determination that those structures are consistent with the public interest standard is qualified in 

its entirety by the Company’s adherence to these terms and conditions. 

 Salary payments. Cash and stock base salaries reflect the annual rate for the employee and are effective as of January 1, 

2011, and in the case of stock salary are payable on a nunc pro tunc basis from that date. To the extent the Office of the 

Special Master’s determinations for 2011 reduce an employee’s previous cash or stock salary rate, payments in excess of 

that rate prior to the date hereof must be offset by reductions to prospective 2011 cash salary payments or to any stock 

salary payable with respect to 2011. 

 Stock compensation generally. For purposes of the Determination Memorandum, “stock” compensation includes common 

stock and stock units. Notwithstanding any transferability restrictions applicable to any stock compensation described in 

the Determination Memorandum, (1) an amount of stock sufficient to cover an employee’s tax withholding obligations may 

become immediately transferable to the extent necessary to satisfy the employee’s obligations, and (2) to the extent 

permitted by the Rule, stock may become immediately transferable upon an employee’s death or separation from service 

resulting from disability, as defined in the Company’s broad-based long-term disability plan. 

 Stock salary. Stock salary must be determined as a dollar amount through the date salary is earned, be accrued at the same 

time or times as the salary would otherwise be paid in cash, and vest immediately upon grant, with the number of shares 

based on the fair market value on the date of award. Stock granted as stock salary may only be redeemed in three equal, 

annual installments as described in the Determination Memorandum. Whether a nunc pro tunc grant or payment that is 

labeled stock salary is considered salary or a bonus for purposes of the Rule is determined based on all the facts and 

circumstances. 

 Long-term restricted stock. Long-term restricted stock for 2011 services may be granted only upon the achievement of 

objective performance criteria developed and reviewed in consultation with the Office of the Special Master. The 

compensation committee must certify (1) the achievement of such criteria, and (2) that the grant of incentives is appropriate 

in light of the Company’s overall circumstances at the time. Such stock must be forfeited unless conditioned upon the 

employee’s continued employment through the third anniversary of grant, unless a termination of employment results from 

death or disability; provided, however, that (a) pro rata vesting is permitted after two years, allowing two-thirds of the grant 

to vest after two years, with the last third vesting on the third anniversary, and (b) all or a portion of such stock may, for 

good cause certified by the Company’s compensation committee, continue to vest if the employee retires on or after the 

second anniversary of the grant date. The term “retirement” must meet an objective standard established in consultation 

with the Office of the Special Master. 

 Other compensation and perquisites. No more than $25,000 in total other compensation and perquisites (as defined by 

pertinent SEC regulations) may be provided to any Covered Employee, absent exceptional circumstances for good cause 

shown. Certain members of Ally’s Covered Employee group are receiving $9,000 annually in place of a former car 

allowance; this amount will be paid pro rata on each payroll date and will reduce the amount of permitted perquisites. 

 Supplemental executive retirement plans and non-qualified deferred compensation plans. No amounts may be accrued 

under supplemental executive retirement plans, and no Company contributions may be made to other “non-qualified 

deferred compensation” plans, as defined by pertinent SEC regulations, for 2011. For the avoidance of doubt, the foregoing 

limitation does not (1) apply to employee-funded elective deferral arrangements or (2) preclude continuing recognition of 

age and service credit for Company employees for the purpose of vesting in previously accrued benefits under any plans 

referred to in this paragraph. 

 Qualified Plans. For the avoidance of doubt, the Office of the Special Master has determined that participation by the 

Covered Employees in broad-based, tax-qualified retirement and health and welfare plans is consistent with the public 

interest standard, and amounts payable under such plans are not counted against the $25,000 limit on other compensation 

and perquisites.