DEPARTMENT OF THE TREASURY WASHINGTON, D.C. 20220

April 26, 2013

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 2013 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 2013 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, and April 6, 2012, relating to 2009, 2010, 

 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

2011, and 2012 compensation, respectively.3 Compensation in 2013 at the two 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 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”), one of two remaining Exceptional 

Assistance Recipients, has submitted to the Office of the Special Master proposed 2013

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 2013 as senior executive officers (the “Senior Executive Officers,” 

or “SEOs”) for purposes of the Rule, and 18 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, two employees who otherwise would have been included in the Covered 

Employee group have departed the Company, but remain 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”). 
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On October 22, 2009, March 23, 2010, April 1, 2011, and April 6, 2012, 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.

Following the issuance of the April 6, 2012 determinations, on May 14, 2012, Ally 

announced that its mortgage subsidiary Residential Capital, LLC (ResCap) had filed for Chapter 

11 bankruptcy and that it would launch a process to explore the sale of its international 

operations, which included auto finance, insurance, and banking and deposit operations in 

Canada, Mexico, Europe, the U.K., and South America. According to the Company’s May 14, 

2012 press release, these initiatives were undertaken in large part to permit Treasury to monetize 

its remaining investment in Ally.6

 At that time the Company stated that, as a result of the 

substantial restructuring anticipated to occur, its executives would be concerned about the future 

of their business units and their positions, and it was important for management to remain 

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

Accordingly, Ally’s compensation committee re-examined the compensation structure for

its top 25 employees and proposed modifications in the structure of the top 25 compensation to 

ensure that Ally’s compensation structure was aligned with returning value to shareholders. The 

Office of the Special Master then reviewed the Company’s revised proposals and issued a 

supplemental determination letter on June 8, 2012, which determined that certain of the modified 

proposals were consistent with the public interest standard, certain of the proposals were not 

consistent with the public interest standard, and changes were required to certain of the proposals 

in order to meet the public interest standard.

 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 www.financialstability.gov (click on “Executive Compensation”). 6 For example, in a statement at the time of the ResCap bankruptcy filing, Timothy G. Massad, Treasury’s Assistant 

Secretary for Financial Stability, emphasized that Treasury consented to the filing based on its belief that, by 

addressing the legacy mortgage liabilities at ResCap, the bankruptcy process would “put taxpayers in a stronger 

position to maximize the value of their remaining investments in Ally”. Maximization of overall returns to 

taxpayers is one of the chief principles guiding the determinations of the Office of the Special Master. 31 C.F.R. § 

30.16(b)(1). Mr. Massad’s statement can be accessed at http://www.treasury.gov/connect/blog/Pages/PuttingTaxpayers-in-a-Stronger-Position-to-Continue-Recovering-Their-Investment-in-Ally-Financial.aspx.
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On January 4, 2013, 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 2013

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 8, 2013. 

Following a preliminary review of the submission, on February 27, 2013, 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.

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, 
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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 2013. 

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:

(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, 

 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. 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. 
A5

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 

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). 
A6

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 2013 compensation structures for the Covered Employees, including amounts 

proposed to be paid 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. Sixteen of the 

employees listed as Covered Employees in 2012 remain on the list of Covered Employees for 

2013, and seven 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.

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 (“2013 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 and 2012 submissions to the Office 

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

order to prepare the 2013 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 2012. 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 their duties and responsibilities, and their reporting relationship. Compensation 

data was then extracted from the following surveys for purposes of comparison to the 

compensation paid to the Ally executives: 

 8 As further described below, two employees who otherwise would have been included in the Covered Employee 

group have departed the Company, but remain subject to the applicable rules for Covered Employees who have left 

the Company. 
A7

• The 2012 Hewitt Total Compensation Measurement TM database: 71 financial 

services companies, with assets greater than $75 billion. 

• The 2012 Towers Watson Financial Services survey: companies with assets 

greater than $50 billion. 

• The 2011 McLagan Partners Surveys: Investment Management, Fixed Income 

Sales & Trading, and Treasury & ALM. 

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 premium or 

discount was applied to the market data for three 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, 2013. The update factor reflects projected salary increase 

budgets across industries for 2013, 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.

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 2013, 

the CNG thoroughly reviewed the Report. Also considered were the performance of each 

executive, changes in responsibilities over the past 12 months where applicable, anecdotal 

reports of bonus pool funding levels at other large, complex financial institutions, and the overall 

limitations and requirements of Ally under TARP. Ally has stated that its proposed 2013 pay 

structures for the 2013 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, mid-way between the 50th and 75th percentiles of 

compensation for person’s in similar roles in similar entities. Some executives would be below 

that mid-point and others would be above it.
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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”.9

2. Ally Proposals

a. Cash Salary

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

$500,000 for six Covered Employees (as compared to seven in 2012). In addition, Ally did not 

propose raises in cash salaries for any Covered Employees. 

b. Stock Salary and Annual Long-Term Incentive Awards

Consistent with the June 8, 2012 supplemental determination letter, Ally proposed that 

Covered Employees receive varying amounts of Ally stock salary for 2013 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. Also consistent with the June 8, 2012 

supplemental determination letter, Ally proposed that stock salary (other than for the CEO) be 

redeemable one-third on the last payroll date in 2013, one-third pro rata over 2014, and one-third 

pro rata over 2015.

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.

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, while moving toward completion, are still in process. Accordingly, 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 modified compensation structure described 

in the June 8, 2012 supplemental determination letter may continue to apply for the first half of 

2013 but that the compensation structure commencing July 1, 2013, should move closer to the 

compensation structure in place prior to 2012. The Office of the Special Master has determined, 

in light of the considerations that follow, that the compensation structures described in 

 9 31 C.F.R. § 30.16(b)(1)(v). See also the discussion of the relevant principles in Part III above. 
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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 

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

circumstances of Exceptional Assistance Recipients. As noted above, Ally did not propose any 

increases in cash salary above 2012 levels for any of the Covered Employees.

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, nine percent below the median cash salary for similar positions at similar 

companies. In addition, the cash salaries listed in Exhibit I are, on average, 62 percent below the 

median total cash compensation for similar positions at similar companies.10

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 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 

 10 Similar companies also pay cash bonuses, which are not permitted for executives whose pay packages are subject 

to review by the Office of the Special Master. The percentages above do not reflect the replacement of stock salary 

by deferred cash awards as referred to in the following footnote. If those awards are included in the calculation as 

cash salaries then Ally’s cash salaries for 2013 are, on average, two percent below the median cash salary for similar 

positions at similar companies, and 58 percent below the median total cash compensation for similar positions at 

similar companies.
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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 although the Office of 

the Special Master did not approve the full amount requested in all cases. In addition, as 

described below, the Office of the Special Master has re-allocated a portion of the proposed 

amounts of stock salary to long-term incentive awards. The stock salaries that the Office of the 

Special Master has determined are consistent with the public interest standard for 2013 are set 

forth in Exhibit I.

11

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, 

however, of the fact that a successful conclusion of the two initiatives announced by Ally in May 

14, 2012, is necessary for Treasury to begin to monetize its remaining investment in Ally, 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 2013 

stock salary may be redeemed as proposed by the Company (as described above and in the June 

8, 2012 supplemental determination letter).12

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 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. § 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.13

The Office of the Special Master has determined that, commencing July 1, 2013, an 

appropriate portion of Ally’s compensation structure should be in the form of long-term 

 11 As described in the Office of the Special Master’s supplemental determination letter dated November 30, 2012, to 

meet concerns raised by the unsecured creditors committee in the Chapter 11 bankruptcy proceeding involving 

Ally’s mortgage subsidiary ResCap, commencing May 14, 2012, compensation to be awarded to any of Ally’s 

employees who are employees of ResCap in the form of specific dollar amounts of Ally stock or stock units were to 

be replaced by identical dollar amounts of deferred cash awards, with all other aspects of timing of awards and 

deferral of vesting and transferability and/or ultimate payment to remain the same. This determination will continue 

to apply for 2013.

12 For the avoidance of doubt, this determination does not apply to 2013 stock salary awarded to Ally’s CEO, which 

continues to be redeemable in three equal, annual installments beginning on the first anniversary of grant. 13 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 2013 

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.
A11

incentive awards 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, and must otherwise be forfeited.

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

determined are consistent with the public interest standard for 2013 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. 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 2013, 

those amounts should be promptly returned to the Company.

5. Non-Qualified Deferred Compensation

Covered Employees must not accrue in 2013 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 2013 compensation structures for Covered Employees do 

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

7. Departing Employees

Two employees who would have been Covered Employees had they remained employed 

by the Company have departed the Company. With respect to these individuals, the Office of the 

Special Master has determined that the payment of stock salaries and cash salaries at the rates in 

effect on January 1, 2013, 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 these employees for 2013 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 for the 

payment that is satisfactory to the Office of the Special Master. For the avoidance of doubt, as 

mentioned in Part I, these employees remain subject to the applicable provisions of the Rule, and 

any other compensation they have accrued remains subject to the above provisions of this Part

IV (or, if applicable, the corresponding provisions of the Prior Determinations) and Exhibit II.
A12

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).

• 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).
A13

• 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 2013 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).

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 $8,550,000 $950,000 $9,500,000 

101512 $500,000 $1,480,000 $220,000 $2,200,000 

102645 $600,000 $4,068,621 $518,736 $5,187,357 

104428 $491,000 $1,975,900 $274,100 $2,741,000 

105336 $500,000 $1,525,000 $225,000 $2,250,000 

141296 $491,000 $1,673,930 $240,548 $2,405,478 

159613 $421,008 $1,157,741 $175,416 $1,754,165 

197253 $500,000 $2,778,650 $364,294 $3,642,944 

265967 $600,000 $3,358,103 $439,789 $4,397,892 

339212 $600,000 $400,000 $0 $1,000,000 

353403 $416,000 $1,398,400 $201,600 $2,016,000 

380289 $391,000 $1,310,900 $189,100 $1,891,000 

391076 $500,000 $1,840,000 $260,000 $2,600,000 

398005 $450,000 $1,233,000 $187,000 $1,870,000 

513416 $491,000 $1,597,900 $232,100 $2,321,000 

542135 $250,000 $2,270,000 $280,000 $2,800,000 

546145 $591,000 $3,000,900 $399,100 $3,991,000 

567303 $500,000 $2,020,000 $280,000 $2,800,000 

673894 $490,988 $1,120,912 $179,100 $1,791,000 

682168 $600,000 $4,462,345 $562,483 $5,624,828 

707713 $550,000 $2,150,000 $300,000 $3,000,000 

725547 $500,000 $2,020,000 $280,000 $2,800,000 

931656 $491,000 $1,768,786 $251,087 $2,510,873 

Note 1: The total number of Covered Employees may be less than 25 because of separations from service since January 1, 2013.

• Overall: Overall cash decreased $5.0 million or 31.3% and total direct compensation decreased $18.8 

million or 20.8%.

• The 16 executives remaining in the top 25 from 2012: Cash salaries remained the same and total 

direct compensation decreased $6.5 million or 10.2% from 2012. (This comparison is to target total direct 

compensation for 2012.) 

• The seven executives new to the top 25 in 2013: Cash compensation decreased $5.0 million or 

62.9% and total direct compensation decreased $12.3 million or 46.1% from 2012.

Note 2: The amounts set forth in this Exhibit I are effective January 1, 2013, except that the amounts in the “Long-Term 

Restricted Stock” column will be effective pro rata as of July 1, 2013, and prior to that date will be delivered as stock salary. 

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. In addition, prior to July 1, 

2013, the amount indicated in the stock salary column for employee 339212 will be paid at an annualized rate of $1.4 million.

EXHIBIT I

COVERED EMPLOYEES

2013 Compensation 

Company Name: Ally Financial Inc. 

Comparison of 2013 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, 2013, 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 2013 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 2013 cash salary payments or to 

any stock salary payable with respect to 2013.

• 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 2013 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 2013 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 2013. 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.