Ally Bank 2011 Annual Report Download - page 242

Table of Contents
Ally Financial Inc. • Form 10−K
Item 11. Executive Compensation
Corporate Governance and Related Disclosures
The Compensation, Nominating and Governance Committee
The Ally Compensation, Nominating and Governance Committee (the Committee) is a committee of the Ally Board of Directors (Board) consisting of
three non−employee independent directors, including Kim S. Fennebresque (Committee Chairman), Robert T. Blakely, and Franklin W. Hobbs.
The Committee, pursuant to its Charter, is responsible for the following:
• Discharging the Board's responsibilities with respect to the establishment, maintenance and administration of Ally's compensation plans,
including determining the total compensation of the Chief Executive Officer and executive officers plus other senior executives designated by the
Committee as under its purview;
• Overseeing Ally's leadership development and succession planning programs;
• Identifying qualified individuals for membership on the Board (consistent with criteria approved by the Board) and to recommend to the Board
the director nominees;
• Reviewing and recommending to the Board the director compensation for service on the Board;
• Leading the Board and its committees in their annual self−evaluation and the annual review of the Board's performance;
• Developing and recommending to the Board a corporate governance policy for the Board, and overseeing Ally's corporate governance
procedures and practices related to the Board; and
• Performing any and all duties required of it under the Emergency Economic Stabilization Act of 2008 (EESA) and any regulations or other legal
authority promulgated at any time thereunder.
Compensation, Nominating and Governance Committee Process
Ally's executive compensation programs are administered by the Committee. During 2011, the Committee met 11 times.
The Committee determines the compensation of senior executives under its purview, including the compensation of our named executive officers
(NEOs, who are also our Senior Executive Officers (SEOs) for purposes of the Troubled Asset Relief Program (TARP) requirements). In making its
determination for senior executives, other than the Chief Executive Officer (CEO), and in making changes to our executive compensation program, the
Committee considers the recommendations of the CEO. The Committee determines the compensation of the CEO without recommendations from the CEO
or from management. The Committee has delegated to the CEO the authority to determine cash compensation for, and to grant long−term incentive awards
to, executives other than for the approximately 25 highest−compensated employees and other select senior executives as determined by the Committee. The
Committee also meets periodically in executive session without the presence of any members of management. The Committee seeks the input of Ally's Risk
Management functions, and in its deliberations on compensation related issues it also consults with the chairperson of the Board's Risk and Compliance
Committee and Audit Committee.
Frederic W. Cook & Co. (Cook) has been appointed by the Committee to serve as its independent advisor. Cook reports directly to the Committee and
provides ongoing advice with respect to the plans and programs covering the executives, including our NEOs and non−employee directors, for which the
Committee is responsible. Cook reviews all materials developed by management in advance of Committee meetings, provides advice and recommendations
concerning changes to our plans and programs, as well as information on market practices and trends, and attends meetings of the Committee. Cook
undertakes no separate work for Ally's management.
Ally's management engaged Pearl Meyer & Partners (Pearl Meyer) to provide consulting assistance on matters pertaining to executive compensation.
More specifically, Pearl Meyer provided assistance regarding the following matters: a competitive assessment of the compensation paid to Ally's CEO, a
price differential analysis for purposes of assisting in the Company's valuation to determine restricted stock unit awards, an analysis of total direct
compensation for top executives and an updated competitive assessment of the compensation for Ally's 25 highest−compensated executives requested by
the Special Master.
Compensation, Nominating and Governance Committee Report
The Committee has reviewed and discussed with Ally management the Compensation Discussion and Analysis and, based on that discussion,
recommended it to the Ally Board of Directors for inclusion in this Form 10−K.
The Committee, with the assistance of Ally's Risk Management and Human Resource functions, conducts assessments of the risks associated with
Ally's compensation policies and practices every six months as required by TARP. To complete such assessments, in 2011 the Committee followed a
process that consisted of the following: (1) ranking plans in a tiered system based on each plan's potential to encourage risk taking as determined by the size
of the potential payout and the nature of the activities engaged in by participants; (2) identifying risk mitigators built into each plan such as caps, clawback
features, and mandatory deferrals; and (3) implementing as necessary additional risk mitigators or controls in plans.
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