P 

DEPARTMENT OF THE TREASURY

WASHINGTON, D.C. 20220 

June 8, 2012 

Mr. James J. Duffy 

Chief Human Resources Officer 

Ally Financial Inc. 

1177 Avenue of the Americas 

New York, NY 10036 

Re: Compensation Payments and Structure for Ally “Top 25” Employees 

Dear Mr. Duffy: 

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

Compensation and Corporate Governance (the “Rule”),1 the Office of the Special Master issued 

a determination letter regarding 2012 compensation payments and structures for the senior 

executive officers and next 20 most highly compensated employees (the “top 25 employees”) of 

Ally Financial Inc. (“Ally” or the “Company”) on April 6, 2012 (the “top 25 letter”). 31 C.F.R. 

§ 30.16(a)(3)(i). 

The top 25 letter noted that Ally might make new proposals with respect to top 25 

compensation as it might deem appropriate in accordance with significant developments that 

might arise at the Company or its subsidiaries. On May 14, Ally’s mortgage subsidiary 

Residential Capital, LLC filed for Chapter 11 bankruptcy, and Ally announced that it would 

launch a process to explore strategic alternatives, including a possible sale, for its international 

operations, which include auto finance, insurance, and banking and deposit operations in Canada, 

Mexico, Europe, the U.K., and South America. The May 14 press release issued by Ally stated 

in part, “Ally has paid approximately $5.5 billion to the U.S. Treasury, enabling the taxpayer to 

recover about one-third of the investment made into the company. Upon successful completion 

of the announced strategic initiatives, Ally expects to return at least another third of the total 

investment, thereby enabling the U.S. Treasury to recover at least two-thirds of its investment in 

Ally by year-end.” 

The compensation structures previously proposed by Ally for 2012 and for previous 

years, as well as the compensation structures determined by the Office of the Special Master for 

2012 and previous years to be consistent with the public interest, did not take into account the 

announcements on May 14. The Company has stated that, as a result of the substantial 

restructuring that will occur, its executives may be concerned about the future of their business 

units and their positions, and that management needs to make sure that they remain focused on 

implementing the announced steps as well as operating the ongoing businesses. 

 

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 

Accordingly, Ally’s compensation committee has re-examined the current compensation 

structure for its top 25 employees and has proposed modifications in the structure of the top 25 

compensation payable for 2012, as well as with respect to compensation related to prior years 

that has not yet been paid, to ensure that Ally’s compensation structure is aligned with returning 

value to shareholders. 

The Rule requires that the Office of the Special Master determine whether 2012 

compensation structures for the top 25 employees “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)(ii) (the “Public Interest Standard”). The Rule also 

requires that the Office of the Special Master consider six principles when making these 

compensation determinations. Among the purposes of these principles are “maximization of 

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

disruptions to financial markets.” Id. at § 30.16(b)(1). The principles, which are described in 

detail in the April 6 top 25 letter, include 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). 

The Office of the Special Master has reviewed the Company’s proposals and has 

determined that certain of the proposals are consistent with the Public Interest Standard, certain 

of the proposals are not consistent with the Public Interest Standard, and changes are required to 

certain of the proposals in order to meet the Public Interest Standard. Accordingly, the Office of 

the Special Master has concluded that the following determinations with respect to the 

compensation structure of the top 25 employees for 2009-20122

, as applicable, are consistent 

with the Public Interest Standard: 

a) The modifications will not apply to the Company’s chief executive officer. 

b) There will not be any increase in total direct compensation for any top 25 employee. 

c) There will not be any increase in cash salary for any top 25 employee. 

d) The balance of each employee’s total direct compensation for 2012 will be payable in the 

form of stock salary. Stock salary earned in 2012 will be redeemable in three equal 

installments, the first on the final payroll date of the year, the second ratably over 2013 

and the third ratably over 2014. 

e) Stock salary earned in 2009 and 2010 and not yet paid will be redeemable in equal 

installments over the period ending on the third anniversary of the grant. 

 

2

 For the avoidance of doubt, such changes are limited to top 25 compensation for such years for employees still 

employed by the Company on June 1, 2012. 
f) Long-tenn restricted stock previously awarded for prior services will vest after two years 

of service. Even if vested, as required by the Interim Final Rule, these awards may be 

redeemed only in 25% installments as Ally repays its TARP obligations in 25% 

increments, and will otherwise be forfeited. 

The approvals in this letter apply only to the employees referenced above and shall not be 

relied upon by anyone with respect to any other facts or circumstances. Such conclusion is 

limited to the authority vested in the Office of the Special Master by Section 30.16(a)(3) of the 

Rule, and shall not constitute, or be construed to constitute, the judgment of the Office of the 

Special Master or the Department of the Treasury with respect to the compliance of the proposed 

compensation payments or structure or any other compensation payments or structure for the 

subject employees with any other provision of the Rule. Moreover, my evaluation and 

conclusion with respect to these employees have relied upon, and are qualified in their entirety 

by, the accuracy of the materials submitted by Ally to the Office of the Special Master, and the 

absence of any material misstatement or omission in such materials. 

cc: Richard Strahota 

Drema M. Kalajian, Esq. 

3 

n truly yours, 

~~0?A"lc.~~_ 

Patricia Geoghegan 

Office of the Special ster 

for T ARP Executive Compensation