Ally Bank 2012 Annual Report Download - page 220

218
The following table shows base salaries paid to the NEOs in 2012.
2012 Base salary
NEO Cash ($)Deferred Cash ($) (a) Equity (Deferred stock units) ($) Total ($)
Michael A. Carpenter — — 9,500,000 9,500,000
Jeffrey J. Brown 600,000 — 3,797,892 4,397,892
Barbara Yastine 600,000 — 4,587,357 5,187,357
William Muir 600,000 — 3,400,000 4,000,000
James G. Mackey 550,000 — 2,450,000 3,000,000
Thomas Marano 600,000 5,582,052 1,821,397 8,003,449
(a) Deferred cash awarded to Mr. Marano was granted after May 14, 2012 in lieu of DSUs pursuant to the request of the ResCap Board of Directors and the
Special Master's November 30, 2012 Supplemental Determination Letter.
Equity salary is delivered in the form of deferred stock units (DSUs), which are immediately vested, but are subject to restrictions on the
timing of payout. Except for the CEO, DSUs and deferred cash earned in 2012 will be payable in three equal installments: the first on the
final payroll date of 2012, the second ratably over 2013 and the third ratably over 2014. DSUs earned by the CEO in 2012 are payable only in
three equal, annual installments beginning on the first anniversary of grant.
Annual Cash Incentives
All NEOs were ineligible to receive annual cash incentives in 2012 due to restrictions under TARP and will continue to be ineligible for
as long as the TARP restrictions are in place.
Long-term Equity-based Incentives
Prior to 2012, we provided long-term equity-based incentives in the form of IRSUs to have an incentive compensation component in the
total direct compensation opportunity for our NEOs, and to provide retention and alignment with shareholder interests. Due to the restrictions
under TARP, grants of long-term IRSUs are the only incentive compensation permitted for the NEOs and the next 20 highest-compensated
employees.
NEOs and the balance of the Top 25 were not eligible for IRSUs in 2012. The long-term IRSU awards granted prior to 2012 to the Top
25 vest after two years from the day they are granted. The long-term IRSU award granted to our CEO in 2011 vests two-thirds after two years
from the date they were granted and in full three years from the date they were granted. Earlier IRSU awards made to our CEO vest three
years from the date they were granted. After the vesting requirement is met, the NEOs will receive payouts as the Company repays its TARP
obligations. Payouts will be made in 25% increments based on the percentage of TARP obligations that have been repaid, as determined in
accordance with the established guidelines for determining “repayment”. As of December 31, 2012, Ally had repaid more than 25%, but less
than 50%, of its TARP obligations, as determined in accordance with the established guidelines. Therefore, 25% of IRSUs granted will be
immediately payable to recipients upon the vesting date(s).
Special Master's 2012 Supplemental Determination Letters and Modified Compensation Structures
On May 14, 2012, our indirect mortgage subsidiary Residential Capital, LLC, and certain of its wholly owned direct and indirect
subsidiaries, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of New York. Further, and also on May 14, 2012, we announced that we were launching a process to explore strategic
alternatives with respect to our international operations. The Committee determined that the existing compensation structures in place for Ally
did not adequately address issues raised by these developments. As a result, the Committee sought and obtained the Special Master's approval
of certain modifications to the compensation structures for the NEOs and other senior executives of the company. The purpose of the
modifications was to better ensure that existing senior management was retained and remained fully focused on implementing the announced
steps as well as operating the ongoing businesses.
The modifications to the compensation structures for the NEOs and other senior executives, which were approved by the Special Master
in 2012 and then adopted by the Committee, specified as follows:
• No increase in total direct compensation for any Top 25 employee.
• No increase in cash salary for any Top 25 employee.
• The portion of each Top 25 employee's total direct compensation for 2012 that would have been payable in the form of long-term
IRSUs would instead be paid in additional salary in the form of DSUs. As a result, no incentive compensation of any kind would be
payable for 2012 for any Top 25 employee.
• Except for the CEO, DSUs earned in 2012 will be payable in three equal installments: the first on the final payroll date of 2012, the
second ratably over 2013 and the third ratably over 2014. DSUs earned by the CEO in 2012 are payable only in three equal, annual
installments beginning on the first anniversary of grant.
Table of Contents Ally Financial Inc. • Form 10-K