Ally Bank 2012 Annual Report Download - page 216

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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, among other things, 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 applicable laws, rules, regulations, regulatory guidance, or other legal authority.
Compensation, Nominating and Governance Committee Process
Ally's executive compensation programs are administered by the Committee. During 2012, the Committee met 14 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 Residential Capital, LLC (ResCap)
executives, 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 other management. The Committee
considers the recommendations of the ResCap Board of Directors and the ResCap CEO in making changes to compensation for ResCap
executives under its purview. The Committee has delegated to the CEO the authority to determine cash and equity compensation for
executives other than for the approximately 25 highest-compensated employees (Top 25), ResCap executives, 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) served as an independent advisor during 2012. 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.
Ally management engaged Pearl Meyer & Partners (Pearl Meyer) to provide consulting assistance on matters pertaining to executive
compensation, including 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 for
TARP related to executive compensation (the Special Master). Ally management also engaged McLagan Partners (McLagan), an Aon Hewitt
Company, to provide consulting assistance on certain matters pertaining to executive compensation, including compensation benchmarking.
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 2012 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
Table of Contents Ally Financial Inc. • Form 10-K