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:

  • 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 (i) Net Asset Value*, (ii) reductions in Gross Operating Run Rate Expense*, and (iii) reductions in Watch List and Adversely Classified Credits*.
  • We made reductions to our Watch List and Adversely Classified Credits an additional performance-based financial metric in our Long-Term Incentive Compensation Plan.
  • In 2019, we added a relative Total Shareholder Return ("rTSR") modifier of +/- 10% to our LTIP Awards so that any final PSU award payout at the end of a three year performance period may be increased or reduced by 10% if the Company's stock performance compared to a peer group is at or above the 75th percentile or at or below the 25th percentile, respectively.

* Reductions in 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. Reductions in Watch List and Adversely Classified Credits as of December 31, 2019 under the STIP were measured against Watch List and Adversely Classified Credits as of January 1, 2019. Net Asset Value is calculated by reducing Assets by Liabilities, determined as of December 31, 2019. See the definitions of Assets and Liabilities set forth in the CD&A under under "Pay Mix -- AAC LTIP Metric" in Ambac’s 2020 Proxy.

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