Responsiveness to Shareholders

Over the years our Board of Directors has been proactive in soliciting and responding to shareholder feedback, and following the recommendations of the Governance and Nominating Committee and the Compensation Committee, implemented the following corporate governance changes:

  • In 2020, we eliminated director meeting fees, which previously applied after a director had attended eight meetings of the Board, or eight meetings of a committee that he or she attended as a member.
  • In 2020, we modified the LTIP award program to provide that while the payout of performance stock units granted will not settle for a three year period and are subject to the relative Total Shareholder Return ("rTSR") modifier, the measurement period for determining the achievement of goals against the pre-set metrics was set at two years to create a better alignment between Company performance and management compensation.
  • We adopted an Executive Stock Ownership and Retention Policy (“Stock Ownership Policy”) applicable to all of our executive officers.
  • We adopted a recoupment policy (otherwise known as a "claw-back") providing that in the event of a material financial restatement or the imposition of a material financial penalty, the Company may recoup incentive-based compensation received by our executive officers during a three-year look-back period.
  • We shifted our Short-Term Incentive Compensation Plan for our executive officers to be more performance-based by establishing financial performance metrics for calculating annual incentive award payouts. Sixty percent of an executive officer's annual incentive award is calculated based on the achievement of pre-established objective financial performance targets related to reductions in (i) Net Par Outstanding* and (ii) Gross Operating Run Rate Expense*.
  • We made reductions to our Watch List and Adversely Classified Credits an additional performance-based financial metric in our Long-Term Incentive Compensation Plan.

* Reductions in Net Par Outstanding under the STIP is measured as of January 1, 2020 against Net Par Outstanding as of December 31, 2020. Gross Operating Run Rate Expense is measured by comparing actual gross operating run rate expenses for the fourth quarter of a fiscal year to performance goals established against budgeted amounts.

Board Governance Highlights

Independent
Oversight and
Leadership

  • 6 out of 7 directors independent
  • Limited additional current Board obligations (no director sits on more than 3 other public company boards), allowing for focus on the execution of Ambac's strategy
  • Separate Chairman and CEO roles

Emphasis on
Shareholder
Rights

  • No classified board - all directors elected annually
  • No shareholder rights plan

Shareholder
Engagement

  • Actively engage with shareholders on corporate governance issues, including Board diversity
  • Track record of proactive, ongoing shareholder dialogue

Board of Directors Experience