DEPARTMENT OF THE TREASURY WASHINGTON, D.C. 20220

April 2, 2014 

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 2014 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 2014 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, 

and not excessive taking into account, 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 Part III of 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 

October 22, 2009, March 23, 2010, April 1, 2011, April 6, 2012, and April 26, 2013, relating to 

 

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 “Executive Compensation”). 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 

2009, 2010, 2011, 2012, and 2013 compensation, respectively.3

 Compensation in 2014 at Ally 

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% 

increments), (b) requirement of a “clawback” of any bonus that is later determined to have been 

 

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 Part III of 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”), the remaining Exceptional Assistance 

Recipient, has submitted to the Office of the Special Master proposed 2014 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 2014 

as senior executive officers (the “Senior Executive Officers,” or “SEOs”) for purposes of the 

Rule, and 19 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”). As further described 

below, one employee who otherwise would have been included in the Covered Employee group 

has departed the Company, but remains subject to the applicable rules for Covered Employees 

who have left the Company. 

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

www.financialstability.gov (click on “Executive Compensation”). 
A2 

On October 22, 2009, March 23, 2010, April 1, 2011, April 6, 2012, and April 26, 2013,5

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.6

 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, 2014, the Office of the Special Master requested from Ally certain data 

and documentary information necessary to facilitate the Office of the Special Master’s review of 

the Company’s 2014 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 (see Part IV below for a discussion of 

Ally’s market data). 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, 2014. 

Following a preliminary review of the submission, on March 7, 2014, 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 

 

5 As explained in the 2013 determination letter, as a result of the significant corporate initiatives announced by Ally 

in May 2012, the Office of the Special Master issued a supplemental determination letter on June 8, 2012, that made 

certain modifications to the structure of the compensation of Covered Employees (other than the CEO) for 2012 and 

prior years, but did not change any amounts of cash compensation or total direct compensation. 6 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 www.financialstability.gov (click on “Executive Compensation”).
A3 

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

of a substantially complete submission. Id.

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 (and prepared by its independent 

compensation consultant) 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 early 2011, the FDIC and the SEC approved versions of a 

joint proposed rulemaking with five other agencies under the Dodd-Frank Act, mandating, 

among other things, the deferral of half of large banks’ top executive bonuses.7

 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 2014. 

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 

 

7 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. Generally, the principles underlying the emerging 

regulations are consistent with the objectives of the Office of the Special Master. 
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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: 

(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 
A5 

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 

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 Market Data and Proposals

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

its proposed 2014 compensation structures for the Covered Employees, including amounts 

proposed to be paid by the Company under the compensation structure for each Covered 

Employee. 

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

and responsibilities at the Company and historical compensation structure. Eighteen of the 

employees listed as Covered Employees in 2013 remain on the list of Covered Employees for 

2014, and six employees are new entrants to the group.8

 

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. 

The following overview of the market data submitted by Ally is based on information supplied 

by the Company. 

 8

 As further described below, one employee who otherwise would have been included in 

the Covered Employee group has departed the Company, but remains subject to the applicable 

rules for Covered Employees who have left the Company. 
A6 

1. Overview of Market Data

To assist the Company in preparing its review of the executive compensation of the top 

25 most highly paid executives (“2014 Top 25 Review”), Ally retained the services of Pearl 

Meyer & Partners (“Pearl Meyer”). Pearl Meyer is an independent executive compensation 

consulting firm that also assisted Ally in developing its 2011, 2012, and 2013 submissions to the 

Office of the Special Master, as well as with other matters pertaining to executive compensation. 

In order to prepare the 2014 Top 25 Review, Ally and Pearl Meyer jointly took the following 

steps to develop the required market data: 

First, a list of the top 25 most highly paid Ally executives was developed based on the 

total compensation received by each executive in 2013. Total compensation was determined in 

the same manner as is required under Regulation S-K of the SEC proxy disclosure rules for the 

summary compensation table. 

Each of the executives, with the exception of the Chief Executive Officer, was then 

matched to one or more positions in the surveys listed below based on his or her Ally job title, a 

description of the employee’s duties and responsibilities, and the employee’s reporting 

relationship. Compensation data was then extracted from the following surveys for purposes of 

comparison to the compensation paid to the Ally executives: 

• The 2013 Hewitt Total Compensation Measurement TM database: 60 financial 

services companies, with assets greater than $75 billion. 

• The 2013 Towers Watson Financial Services survey: companies with assets 

greater than $50 billion. 

• The 2013 McLagan Partners Surveys: Investment Management and Top 

Management. 

For seven Ally executives, a blend of two survey positions was used to more 

appropriately align the executive’s role to the survey position. In addition, a discount was 

applied to the market data for five Ally executives to better reflect the scope of their 

responsibilities and accountabilities relative to the market. 

Survey data for all the positions was aged using an update factor from the effective date 

of the survey data to January 1, 2014. The update factor reflects projected salary increase 

budgets across industries for 2014, as provided by a widely-used salary budget survey. 

Ally’s Chief Executive Officer was compared to the CEOs of the ten peer companies 

listed below, as approved by the Ally Compensation, Nominating and Governance Committee 

(“CNG”). The compensation data was developed from the proxy disclosures of each of these 

companies: BB&T Corporation, Capital One Financial Corporation, Discover Financial 

Services, Fifth Third Bancorp, KeyCorp, The PNC Financial Services Group, Inc., Regions 

Financial Corporation, SunTrust Banks Inc., US Banc Corp., and Wells Fargo & Company. 

These are the same comparator companies Ally and Pearl Meyer used in 2012 and 2013. 
A7 

Following the process described above, Ally and Pearl Meyer developed market data for 

total direct compensation (base salary plus annual incentive compensation and the grant date 

value of long-term incentives) for each of the Ally executives. This market data was then 

compared to the total direct compensation paid to each Ally executive. 

Once the comparisons were finalized, a report was prepared detailing the methodology 

and findings from the review (the “Report”). In determining its proposed pay structure for 2014, 

the CNG reviewed the Report. Also considered were the performance of each executive, 

changes in responsibilities over the past 12 months where applicable, and the overall limitations 

and requirements of Ally under TARP. Ally has stated that its proposed 2014 pay structures for 

the 2014 top 25 appropriately balance all of these factors. 

Based on the market data contained in the Report, the Office of the Special Master has 

concluded that the amounts of total direct compensation set forth in Exhibit I would place the 

Covered Employees, on average, somewhat above the median compensation for persons in 

similar roles at similar companies. (Specifically, the average for Covered Employees would be 

at a point that is 28 percent of the difference between the 50th and 75th percentiles of 

compensation for persons in similar roles at similar companies.9

) Some executives would be 

below that average and others would be above it. Moreover, the aggregate total direct 

compensation for the 24 Covered Employees is seven percent lower than the aggregate total 

direct compensation for the 23 executives covered by the 2013 determination letter. In addition, 

the cash compensation for Covered Employees set forth in Exhibit I is on average four percent 

below the median for cash salaries and 62 percent below the median for total cash compensation 

for persons in similar roles at similar companies.

As in past years, an executive compensation specialist on the staff of the Office of the 

Special Master evaluated the Report based on decades of experience in structuring executive 

compensation and on testing a sample of the market information contained in the Report using 

one or more of the databases referred to in Part II above. Based on that evaluation, the Office of 

the Special Master has concluded that the market comparisons set forth in the Report provide a 

reasonable guide to compensation paid to “persons in similar positions or roles at similar entities 

that are similarly situated”.10

2. Ally Proposals 

a. Cash Salary

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

$500,000 for three Covered Employees (as compared to six in 2013). In addition, Ally did not 

propose raises in cash compensation for any Covered Employees.

 

9 This is a favorable development; in 2012 and 2013 the average was mid-way between the 50th and 75th percentiles. 10 31 C.F.R. § 30.16(b)(1)(v). See also the discussion of the relevant principles in Part III above. 
A8 

b. Stock Salary and Annual Long-Term Incentive Awards

Ally proposed that Covered Employees receive varying amounts of Ally stock salary for 

2014 and not receive any awards of long-term restricted stock. As required by the Rule, the 

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

with the June 8, 2012 supplemental determination letter and the 2013 determination letter, Ally 

proposed that stock salary continue to be redeemable one-third on the last payroll date in 2014, 

one-third pro rata over 2015, and one-third pro rata over 2016. Ally also proposed that this 

schedule be made applicable to the CEO. 

c. “Other” Compensation and Perquisites 

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

Employees. These proposed payments varied in value. 

d. Additional Requests 

Ally proposed a number of changes in compensation with respect to past years, including 

(a) conforming the vesting and payment schedules for certain CEO compensation related to years 

2009-2013 to the schedules applicable to other executives pursuant to the June 8, 2012 

supplemental determination letter and the 2013 determination letter, (b) accelerating the payment 

of vested but unpaid stock salary in the case of three retirement-eligible top 25 executives, and 

(c) accelerating the payment of vested compensation of all top 25 executives upon the 

Company’s full repayment of its TARP obligations. 

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 addition, 

the Office of the Special Master understands that the initiatives announced by the Company in 

May 2012 have been almost fully accomplished, and that the Company has repaid $15.3 billion, 

or 89 percent, of the $17.2 billion taxpayer investment provided to Ally. 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. 

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 
A9 

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 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 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. Based on the market data described above, the cash salaries listed in Exhibit I

are, on average, four percent below the median cash salary for similar positions at similar 

companies. In addition, the cash salaries listed in Exhibit I (which are the only cash element of 

total direct compensation for Covered Employees) are, on average, 62 percent below the median 

total cash compensation for similar positions at similar companies. As a result of this low 

proportion of cash compensation, on average 83 percent of the pay packages for Covered 

Employees consists of stock compensation. 

 2. Stock Salary and Annual Long-Term Incentive Awards

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

pay the Covered Employees in light of the following principles: “an appropriate portion of the 

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

§ 30.15(b)(1)(iv); 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 a “compensation structure, and amount payable...should reflect the current 

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

§ 30.16(b)(1)(vi). The Office of the Special Master concluded that the amounts of stock salary 

proposed, in proportion to total compensation, were generally appropriate. The stock salaries 

that the Office of the Special Master has determined are consistent with the public interest 

standard for 2014 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). The Office 

of the Special Master has focused particularly on the principle of “taxpayer return”: “The 

compensation structure, and amount payable . . . should reflect the need for the [company] to 

remain a competitive enterprise, to retain and recruit talented employees who will contribute to 

the [company’s] future success, and ultimately to be able to repay TARP obligations.” Id. at § 

30.16(b)(1)(ii). Accordingly, the Office of the Special Master has determined that Ally’s 2014 
A10 

stock salary may continue to be redeemed as proposed by the Company (as described above and 

in the 2013 determination letter).11

Ally’s repayment of a significant portion of its TARP obligations has occurred on a faster 

schedule than contemplated by the Office of the Special Master at the time of the 2013 

determination letter. In light of the transformation of the Company that has occurred, and in 

light of the difficulties presented by the use of long-term restricted stock (the only incentive 

compensation permitted under the Rule) for employees who may retire or otherwise depart the 

Company during the next three years and thus be unable to satisfy the Rule’s vesting 

requirements, the Office of the Special Master has determined that it is appropriate to approve 

the Company’s request that the 2014 compensation structure for Covered Employees not include 

any long-term restricted stock.

 3. “Other” Compensation and Perquisites 

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

to $25,000 on an annual basis. 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 2014, 

those amounts should be promptly returned to the Company. 

 4. Non-Qualified Deferred Compensation

Covered Employees must not accrue in 2014 additional amounts under supplemental 

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

in Exhibit II. 

 5. Severance Plans

The Company must ensure that 2014 compensation structures for Covered Employees do 

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

6. Departing Employee

One employee who would have been a Covered Employee had the employee remained 

employed by the Company has departed the Company. With respect to this individual, the 

Office of the Special Master has determined that the payment of stock salary and cash salary at 

the rates in effect on January 1, 2014, through the date of the termination of employment, and 

payment of up to $25,000 in perquisites and “other” compensation are consistent with the public 

interest standard. No other payments of total direct compensation to this employee for 2014 

would be consistent with the public interest standard. Any exceptions to this limitation will 

require that the Company provide to the Office of the Special Master an independent justification 

 

11 For the avoidance of doubt, this determination does not apply to 2014 stock salary awarded to Ally’s CEO, which 

continues, as in 2011-2013, to be redeemable in three equal, annual installments beginning on the first anniversary 

of grant.
A11 

for the payment that is satisfactory to the Office of the Special Master. For the avoidance of 

doubt, as mentioned in Part I, this employee remains subject to the applicable provisions of the 

Rule, and any other compensation the employee has accrued remains subject to the above 

provisions of this Part IV (or, if applicable, the corresponding provisions of the Prior 

Determinations) and Exhibit II. 

7. Additional Requests 

The Office of the Special Master declines to approve the additional compensation 

changes requested by Ally and summarized in paragraph A.2.d above. It is not persuaded that 

modifications beyond those in place since 2012 are either required to permit the Company to 

continue implementing successfully the structural changes necessitated by the initiatives begun 

in 2012, or otherwise justified. 

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. 

• 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 with a total value for Ally’s 

fiscal year that 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). 
A12 

• 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 2014 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 

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).
A13 

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 $9,500,000 $0 $9,500,000 

101512 $500,000 $1,700,000 $0 $2,200,000 

102645 $600,000 $4,587,357 $0 $5,187,357 

105336 $500,000 $1,750,000 $0 $2,250,000 

129881 $400,000 $1,041,000 $0 $1,441,000 

141296 $491,000 $1,914,478 $0 $2,405,478 

159613 $491,000 $1,850,000 $0 $2,341,000 

178067 $450,000 $916,000 $0 $1,366,000 

197253 $500,000 $3,142,944 $0 $3,642,944 

265967 $600,000 $3,797,892 $0 $4,397,892 

305789 $491,000 $1,300,000 $0 $1,791,000 

353403 $416,000 $1,600,000 $0 $2,016,000 

354392 $500,000 $1,674,943 $0 $2,174,943 

380289 $391,000 $1,500,000 $0 $1,891,000 

391076 $500,000 $2,100,000 $0 $2,600,000 

398005 $450,000 $1,420,000 $0 $1,870,000 

491397 $391,000 $1,050,000 $0 $1,441,000 

513416 $491,000 $1,830,000 $0 $2,321,000 

546145 $591,000 $3,400,000 $0 $3,991,000 

567303 $500,000 $2,300,000 $0 $2,800,000 

673894 $490,988 $1,300,012 $0 $1,791,000 

725547 $500,000 $2,300,000 $0 $2,800,000 

921597 $500,000 $1,649,872 $0 $2,149,872 

931656 $491,000 $2,019,873 $0 $2,510,873 

Note 1: The total number of Covered Employees may be less than 25 because of separations from service since January 1, 2014.

Note 2: Redemption of stock salary awarded to the CEO will be as described above. Redemption of stock salary awarded to 

other Covered Employees will be in three installments as described in the Determination Memorandum.

• Overall: Overall cash decreased $3.8 million or 25.2% and total direct compensation decreased $3.3 

million or 4.7%.

• The 18 executives remaining in the top 25 from 2013: Cash salaries remained the same and total direct 

compensation increased $150,000 or 0.27% from 2013. (This comparison is to target total direct compensation 

for 2013.) 

• The six executives new to the top 25 in 2013: Cash compensation decreased $3.8 million or 58.1% and 

total direct compensation decreased $3.4 million or 24.8% from 2013.

EXHIBIT I

COVERED EMPLOYEES

2014 Compensation 

Company Name: Ally Financial Inc. 

Comparison of 2014 compensation to prior year compensation for the employees listed above
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, 2014, 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 2014 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 2014 cash salary payments or to 

any stock salary payable with respect to 2014. 

• 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 longterm 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 in 2014 may be redeemed 

in three 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 2014 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 in settlement of a former car 

allowance that will be paid pro rata on each payroll date. 

• 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 “nonqualified deferred compensation” plans, as defined by pertinent SEC regulations, for 2014. 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.