Edgar Filing: ALLEGHANY CORP /DE

DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

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ALLEGHANY CORPORATION

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LOGO


NOTICE OF ANNUAL MEETING OF STOCKHOLDERS			March 17, 2016

Alleghany Corporation (“Alleghany”) hereby gives notice that its 2016 Annual Meeting of Stockholders (the “2016 Annual Meeting”) will be held at The Penn Club of New York, 30 West 44^th Street, New York, New York, on Friday, April 22, 2016 at 10:00 a.m., local time, for the following purposes:

To elect two directors for terms expiring in 2019.

To ratify the selection of Ernst & Young LLP as Alleghany’s independent registered public accounting firm for fiscal 2016.

To hold an advisory, non-binding vote on executive compensation.

To transact such other business as may properly come before the meeting, or any adjournment or postponement thereof.

Holders of Alleghany common stock at the close of business on March 1, 2016 are entitled to receive this Notice and vote for the election of directors and on each of the other matters set forth above at the 2016 Annual Meeting and any adjournments or postponements thereof.

You are cordially invited to attend the 2016 Annual Meeting. Representation of your shares at the 2016 Annual Meeting is very important. Whether or not you plan to attend in person, we encourage you to vote your shares promptly by using the Internet or telephone, or by signing and returning the enclosed proxy card in the envelope provided. You may revoke your proxy at any time before it is voted at the 2016 Annual Meeting by written notice to the Secretary of Alleghany, by submitting a new proxy with a later date, or by voting in person at the 2016 Annual Meeting.

By order of the Board of Directors,

CHRISTOPHER K. DALRYMPLE

Senior Vice President, General

Counsel and Secretary

Alleghany Corporation

7 Times Square Tower

New York, New York 10036

Important Notice Regarding Internet Availability of Proxy Materials for the Alleghany Corporation 2016 Annual Meeting of Stockholders to be Held on April 22, 2016: Proxy materials relating to the 2016 Annual Meeting (notice of meeting, proxy statement, proxy and 2015 Annual Report to Stockholders on Form 10-K) are also available on the Internet at www.envisionreports.com/YAL.

PROXY STATEMENT — TABLE OF CONTENTS


PROXY STATEMENT SUMMARY			1
QUESTIONS AND ANSWERS ABOUT ALLEGHANY’S 2016 ANNUAL MEETING			8
CORPORATE GOVERNANCE			12
Board of Directors			12
Director Independence			12
Committees of the Board of Directors			13
Board Tenure			15
Board Leadership			15
Chief Executive Officer and Senior Management Succession Planning			15
Board Evaluation			16
Board Role in Risk Oversight			16
Directors Nominations and Qualifications			16
Communications with Directors			17
Director Retirement Policy			17
Codes of Ethics			17
Majority Election of Directors			17
Director Stock Ownership Guidelines			18
Hedging and Pledging Policies			18
Related Party Transactions			18
PRINCIPAL STOCKHOLDERS			20
EXECUTIVE OFFICERS			21
SECURITIES OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS			22
Section 16(a) Beneficial Ownership Reporting Compliance			24
PROPOSAL 1. ELECTION OF DIRECTORS			25
Nominees for Election			26
Other Alleghany Directors			27
Compensation of Directors			30
PROPOSAL 2. RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2016			32
Audit Committee Report			33
PROPOSAL 3. ADVISORY VOTE ON EXECUTIVE COMPENSATION			34
COMPENSATION COMMITTEE REPORT			35
COMPENSATION DISCUSSION AND ANALYSIS			37
Compensation Philosophy and Objectives			37
2015 Compensation Program Summary			39
Alleghany Performance in 2015			40
Alleghany Long-Term Performance			41
Compensation Committee Process			43
Elements of 2015 Compensation			45
Financial Statement Restatements			52
Hedging and Pledging Policies			52
Executive Officer Stock Ownership Guidelines			52
Tax Considerations			52
Compensation Policies and Practices Relating to Risk Management			53
EXECUTIVE COMPENSATION			54
Summary Compensation Table			54
Grants of Plan-Based Awards in 2015			57
Narrative Discussion Relating to the Summary Compensation Table and Grants of Plan-Based Awards Table			58
Outstanding Equity Awards at 2015 Fiscal Year-End			62
2015 Stock Vested			63
Nonqualified Deferred Compensation			63
Pension Benefits			65
Payments Upon Termination of Employment			67
STOCKHOLDER NOMINATIONS AND PROPOSALS			70
ADDITIONAL INFORMATION			71

PROXY STATEMENT SUMMARY

This summary highlights selected information that is discussed in more detail elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and you should read the full Proxy Statement before voting. Unless the context otherwise requires, references in this Proxy Statement to “Alleghany,” the “Company,” “we,” “our” or “us” refer to Alleghany Corporation, references to the “Board” refer to our Board of Directors, references to the “common stock” refer to our common stock, par value $1.00 per share, and references to the “2016 Annual Meeting” refer to our 2016 Annual Meeting of Stockholders and any and all adjournments or postponements thereof.

2016 ANNUAL MEETING INFORMATION


Date and Time		Friday, April 22, 2016, at 10:00 a.m. local time

Location		The Penn Club of New York 30 West 44th Street New York, New York

Record Date		March 1, 2016

Mailing Date		On or about March 17, 2016

MEETING AGENDA AND BOARD RECOMMENDATIONS


Voting Matter	Board’s Recommendation	Additional Information
Proposal 1: Election of Directors	FOR each director nominee	pages 25 to 31
Proposal 2: Selection of Independent Accounting Firm	FOR	pages 32 and 33
Proposal 3: Advisory Vote on Executive Compensation	FOR	pages 34 to 69

HOW TO VOTE (pages 8 and 9)

You can vote by any of the following methods:


By Internet		Go to the voting website, www.envisionreports.com/YAL

By Telephone		If you reside in the United States, Canada or U.S. territories, call toll free 1-800-652-VOTE (8683)

By Mail		If you received a proxy card in the mail, complete, sign, date, and mail the proxy card in the return envelope provided to you

In person		Attend the Annual Meeting and vote by ballot

If you vote by the Internet or telephone, you must vote no later than 1:00 a.m., Eastern Daylight Time, on April 22, 2016.

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BOARD NOMINEES (page 26)

Karen Brenner

Director since 2009

Ms. Brenner has been an Executive Director of Law and Business Initiatives at New York University since 2012 and Clinical Professor of Business at the Leonard N. Stern School of Business at New York University since 2008.

John G. Foos

Director since 2012

LOGO

Mr. Foos currently serves as a director of Blue Cross Blue Shield of South Carolina, a South Carolina-owned and operated health insurance carrier, the HAI Group Companies, a provider of niche insurance programs and services for the public and affordable housing community, and Emerald Shelter Group, a not-for-profit that provides healthcare and affordable housing.

GOVERNANCE HIGHLIGHTS


Board Independence		Nine of our ten directors are independent directors. All of our standing Board committees are chaired by independent directors. Our Audit, Compensation and Nominating and Governance Committees are 100 percent independent.

Board Structure		Our Board is divided into three separate classes of directors. At each Annual Meeting of Stockholders, one class of directors is elected to a term of three years.

Risk Oversight		Our Board and its committees work with management to diligently monitor and manage risk.

Independent Chairman		Our current Chairman is an independent director. Our policy is that the Chairman should not be an Alleghany officer.

Board and Committee Evaluations		Our annual Board and committee evaluation processes help promote the effectiveness of the Board and its committees.

Director Tenure		Our Board has an average tenure of ten years, with half of our current directors joining the Board in 2009 or later.

Stock Ownership Guidelines		Executive officers are required to hold shares of common stock valued at three to five times their base salary (varies depending on position). Directors are required to hold common stock and/or restricted stock units valued at least five times the annual board retainer within five years of election to the Board. We have a policy prohibiting hedging and pledging of our common stock by directors and executive officers to discourage excessive risk-taking.

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PERFORMANCE HIGHLIGHTS

2015 and long-term financial results highlights are as follows:

2015 Performance

•

4.4% increase in common stockholders’ equity per share to $486.02 at 2015 year-end from $465.51 at 2014 year-end.

•

Transatlantic Holdings, Inc., or “TransRe,” and RSUI Group, Inc. or “RSUI,” which together account for 90% of our consolidated stockholders’ equity, produced high single-digit returns on equity on an operating basis (excluding net realized capital gains or losses and other-than-temporary impairment charges). Investment returns, however, were weak in 2015 resulting in slightly lower growth in book value for each company relative to the return on equity, consistent with the lackluster performance of all investment classes generally in 2015.

•

Net earnings of $560.3 million in 2015, compared with $679.2 million in 2014, primarily reflecting higher other-than-temporary impairment losses in 2015 compared with 2014.

•

Consolidated Alleghany underwriting profit of $466.6 million in 2015, compared with $494.8 million in 2014, and a consolidated combined ratio of 89.0% in 2015, compared with 88.8% in 2014, reflecting continued positive underwriting results at TransRe and RSUI.

•

Alleghany made progress in building Alleghany Capital Corporation’s portfolio of non-financial business investments by acquiring IPS-Integrated Project Services, LLC, or “IPS.”

Additional information regarding Alleghany’s 2015 results, including audited consolidated financial statements, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations, or “MD&A,” with respect to 2015 results, is contained in Alleghany’s Annual Report on Form 10-K for the year ended December 31, 2015, or the “Form 10-K,” which was filed with the U.S. Securities and Exchange Commission, or the “SEC,” on February 23, 2016. Readers are urged to review the Form 10-K for a more complete discussion of Alleghany’s financial performance.

Long-Term Performance

We believe that Alleghany’s performance is best measured over the long term, and that long-term growth in common stockholders’ equity per share is the best metric for evaluating such performance. In this regard, the table below shows the annual, and three- and ten-year average rolling, annualized growth in our common stockholders’ equity per share during the five-year period from December 31, 2010 to December 31, 2015:


	Common Stockholders’ Equity Per Share($)⁽¹⁾		Annual Growth
						Rolling Annualized Average
Year						Three-Year			Ten-Year
2010		325.31		10.4			5.0			8.7
2011		342.12		5.2			8.6			7.7
2012		379.13		10.8			8.7			8.8
2013		412.96		8.9			8.3			8.5
2014		465.51		12.7			10.8			8.6
2015		486.02		4.4			8.6			8.6
Average				8.7	%		8.3	%		8.5	%

(1)	Adjusted for subsequent stock dividends

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As can be seen in the table above, Alleghany’s common stockholders’ equity per share has compounded over the various time metrics in the mid-range of Alleghany’s stated financial objective of 7-10% annual growth in common stockholders’ equity per share.

The chart below summarizes Alleghany’s common stockholders’ equity per share growth and stock price performance over the ten-year period from December 31, 2005 to December 31, 2015, compared with the Standard & Poor’s 500 Stock Index, or the “S&P 500,” with all values indexed to December 31, 2005. During this ten-year period, Alleghany’s common stockholders’ equity per share increased at a compound annual rate of 8.6%, compared with a compound annual rate of return of 7.3% for the S&P 500, and the price of Alleghany common stock (adjusted for stock dividends) appreciated at a 6.6% compound annual rate of return.

LOGO

As indicated by the data presented in the chart above, Alleghany’s growth in common stockholders’ equity per share has been relatively consistent. The trading price of Alleghany’s common stock has been more volatile, reflecting the volatility of the stock market in general. In Alleghany’s view, growth in common stockholders’ equity per share is a better measure of fundamental value creation as compared to the more volatile trading price of Alleghany’s common stock. As such, Alleghany focuses its executive compensation program on building common stockholders’ equity per share over time. As is shown in the chart, Alleghany’s growth in common stockholders’ equity per share has exceeded that of the S&P 500 return over the past ten years and is considerably less volatile.

COMPENSATION HIGHLIGHTS

Compensation Philosophy

Our executive compensation program is intended to provide competitive total compensation to each of Alleghany’s executive officers (as listed on page 21), or the “Named Executive Officers,” that is aligned with the interests of our stockholders in increasing our common stockholders’ equity per share at rates of 7-10% over the long term without employing excessive amounts of financial leverage and without taking imprudent risks. This approach enables us to manage risk to avoid loss of capital during periods of economic turmoil, which we believe creates maximum value for stockholders in the long term, even if it results in lower levels of capital appreciation during periods when economic conditions are more favorable.

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For 2015, this compensation philosophy was evidenced by the following compensation highlights:

•

CEO total direct compensation (salary, annual incentive and long-term equity based awards) was $6.7 million, representing approximately 0.9% of 2015 pre-tax earnings and approximately 0.1% of 2015 revenues, and total direct compensation for our Named Executive Officers as a group was $17.1 million, representing approximately 2.4% of 2015 pre-tax earnings and approximately 0.4% of 2015 revenues.

•

85% of Mr. Hicks’s total direct compensation for 2015 was linked to performance, while performance-linked compensation for our other Named Executive Officers averaged 74% of total direct compensation in 2015.

•

Mr. Hicks’s 2015 total direct compensation decreased by 10% from 2014 total direct compensation, due to a lower annual incentive payout for 2015.

•

Annual incentive plan awards included a financial objective but also discretion given the nature of Alleghany’s business and long-term approach, with the discretionary aspect being restricted by the fact that payouts for 2015 were limited to the lesser of (i) approximately $5.7 million (representing the maximum potential payout for our Named Executive Officers as a group) or (ii) 3% of 2015 annual adjusted pre-tax earnings, if less than $5.7 million.

•

Long-term performance share awards were subject to goals that we believed would be challenging to meet in today’s low interest rate and volatile market environment and that are aligned with our corporate financial objective of long-term growth in book value, with no payout being made if threshold performance is not achieved, and with our CEO’s long-term incentives based 100% on performance.

Elements of 2015 Compensation

The principal elements of compensation paid to our Named Executive Officers in respect of 2015 consisted of:

•

salaries;

•

annual cash incentive compensation under the 2010 Management Incentive Plan, or “2010 MIP;”

•

annual grants of long-term equity-based incentives under the 2012 Long-Term Incentive Plan, or “2012 LTIP;” and

•

an annual savings benefit equal to 15% of base salary.

In addition, our Named Executive Officers receive a benefit, assuming the completion of five years of service with Alleghany or a subsidiary of Alleghany, under a retirement plan, although such benefit was frozen in 2013.

The percentage that these elements represent of the 2015 compensation for our chief executive officer and our other Named Executive Officers is reflected below.

LOGO

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2015 Named Executive Officer Compensation

The following table sets forth the compensation of our Named Executive Officers during 2015, as calculated in accordance with applicable SEC regulations. For a complete schedule and related footnotes, please see the “Summary Compensation Table” on page 54 in the Executive Compensation section of this Proxy Statement.


Name and Principal Position	Salary		Bonus		Stock Awards		Non-Equity Incentive Plan Compensation		Change in Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compensation		Total
Weston M. Hicks	$	1,000,000		—	$	4,026,509	$	1,700,000		—	$	166,176	$	6,892,685
President and chief executive officer

Joseph P. Brandon		800,000		—		2,415,815		1,620,000		—		132,716		4,968,531
Executive Vice President

Christopher K. Dalrymple		630,000		—		951,133		614,250		—		103,890		2,299,273
Senior Vice President, General Counsel, and Secretary

Roger B. Gorham		600,000		—		271,557		270,000		256,464		100,572		1,498,593
Senior Vice President - Head of Fixed Income and Treasurer

John L. Sennott, Jr.		630,000		—		951,133		614,250		—		104,422		2,299,805
Senior Vice President and chief financial officer

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Long-Term Compensation Highlights

During the ten-year performance period set out in the graph on page 4, we believe that Mr. Hicks’s compensation has been well-aligned with Alleghany’s long-term performance as can be seen in the table below:

10-year Pay-TSR(1) Alignment

($ in thousands)

LOGO


																									CAGR
Year	2005		2006		2007		2008		2009		2010		2011		2012		2013			2014		2015			1 Year			3 Year			10 Year
CEO Total Compensation(2)		3,781		4,566		6,522		6,435		6,206		5,636		7,347		7,332		6,216			10,543		6,869			(34.8	%)		(2.1	%)		6.2	%
Pension Value Increase/(Decrease)		850		856		1,160		1,594		1,066		822		1,922		1,259		(1,232	)		2,914		(23	)
CEO SCT Compensation Excluding Pension(3)		2,931		3,710		5,361		4,840		5,140		4,814		5,425		6,072		7,448			7,629		6,892			(9.7	%)		4.3	%		8.9	%
Indexed TSR		100		131		147		105		105		119		113		133		159			184		189			3.1	%		12.5	%		6.6	%
TSR vs. CEO Compensation (excl. pension) Increases / Decreases																										12.8	%		8.2	%		(2.3	%)
Indexed BVPS Growth		100		115		132		126		139		153		161		178		194			219		228			4.4	%		8.6	%		8.6	%
BVPS vs. CEO Compensation (excl. pension) Increases / Decreases																										14.1	%		4.3	%		(0.3	%)

(1)	Total Shareholder Return reflects Alleghany share price appreciation including the impact of stock dividends.

(2)	Includes annual fluctuation in pension value. Calculated according to SEC rules except for 2013 and 2015, which include a negative value for Mr. Hicks’s pension benefit. SEC rules require that negative pension value changes are reflected as a “zero” in the table.

(3)	Represents CEO compensation as reported in the Summary Compensation Table on page 54, excluding annual fluctuation in pension value.

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QUESTIONS AND ANSWERS ABOUT ALLEGHANY’S 2016 ANNUAL MEETING

Q:	*Why did I receive these proxy materials?*

A:	You have received these proxy materials because the Board is soliciting your proxy to vote your shares of common stock at the 2016 Annual Meeting.

Q:	*Who is entitled to vote at the 2016 Annual Meeting?*

Alleghany has one class of voting stock outstanding: its common stock. If you were a holder of common stock at the close of business on March 1, 2016, the record date for the 2016 Annual Meeting, you are entitled to vote at the meeting. At the close of business on March 1, 2016, there were 15,449,750 shares of common stock outstanding and entitled to vote. Each share of common stock has one vote.

Q:	*How can I vote my shares?*

You can vote your shares in two ways: either by proxy or in person at the 2016 Annual Meeting by written ballot. If you choose to vote by proxy, you may do so using the Internet, telephone or, if you received a printed copy of your proxy materials, mail. Each of these procedures is more fully explained below. Even if you plan to attend the 2016 Annual Meeting in person, the Board recommends that you vote promptly by proxy to ensure that your shares are represented at the 2016 Annual Meeting.

Q:	*How can I vote my shares by proxy?*

Because many stockholders cannot attend the 2016 Annual Meeting in person, it is necessary that a large number of stockholders be represented by proxy. You may vote your proxy using the Internet, telephone or, if you received a printed copy of your proxy materials, mail, each as more fully explained below. In the case of voting your proxy using the Internet or telephone, the deadline for voting is 1:00 a.m. (Eastern Daylight Time) on Friday, April 22, 2016. If your shares are held in the name of a bank, broker or other holder of record, please see the voting instructions provided by such party.


Vote by Internet		To vote your shares via the Internet, go to the voting website, www.envisionreports.com/YAL. Internet voting is available 24 hours a day, seven days a week. You will have the opportunity to confirm that your instructions have been properly recorded. Our Internet voting procedures are designed to authenticate stockholders through individual control numbers. If you vote via the Internet, you may incur costs such as Internet access fees for which you will be responsible. If you received a proxy card in the mail and choose to vote via the Internet, you do not need to return your proxy card.

Vote by Telephone		If you reside in the United States, Canada or U.S. territories, you can vote your shares by telephone by calling the toll-free number provided on the voting website www.envisionreports.com/YAL and on the proxy card. Telephone voting is available 24 hours a day, seven days a week. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. Our telephone voting procedures are designed to authenticate stockholders through individual control numbers. If you received a proxy card in the mail and choose to vote by telephone, you do not need to return your proxy card.

Vote by Mail		If you received a printed copy of your proxy materials, you can vote your shares by completing and mailing the enclosed proxy card to us so that we receive it by the deadline.

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If you properly sign and return your proxy card or submit your proxy using the Internet or telephone, your shares will be voted as you direct. If you sign and return your proxy card but do not specify how to vote, we will vote your shares in accordance with the Board’s recommendations: “FOR” each of the Board’s nominees for director; “FOR” the ratification of the selection of our independent registered public accounting firm; and “FOR” the advisory resolution on executive compensation.

Q:	*How can I vote my shares in person?*

If you wish to vote in person at the 2016 Annual Meeting, written ballots will be available at the meeting. If your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy, executed in your favor, from that holder of record to be able to vote in person at the 2016 Annual Meeting. Voting by proxy, whether by Internet, telephone or mail, will not limit your right to vote at the 2016 Annual Meeting if you decide to attend in person. However, if you vote by proxy and also attend the 2016 Annual Meeting, there is no need to vote in person at the meeting unless you wish to change your vote.

Q:	*How can I attend the 2016 Annual Meeting?*

You are entitled to attend the 2016 Annual Meeting if you were a stockholder of Alleghany as of the close of business on March 1, 2016, the record date, or if you hold a valid proxy for the 2016 Annual Meeting. You should be prepared to present photo identification for admittance. If you are a stockholder of record, your name will be verified against the list of stockholders of record on the record date prior to your admission to the 2016 Annual Meeting. If you are not a stockholder of record, but hold shares through a broker, bank or nominee (i.e., in street name), you should provide proof of beneficial ownership on the record date, such as your most recent account statement prior to March 1, 2016, a copy of the voting instruction card provided by your broker, bank or nominee, or other similar evidence of ownership. If you do not provide photo identification or comply with the other procedures outlined above, you may not be admitted to the 2016 Annual Meeting.

The 2016 Annual Meeting will begin promptly on April 22, 2016, at 10:00 a.m., local time. You should allow adequate time for check-in procedures.

Q:	*Can I change my vote?*

Yes. You can change your vote or revoke your proxy at any time before it is exercised at the 2016 Annual Meeting by taking any one of the following actions: (1) follow the instructions given for changing your vote via the Internet or by telephone or deliver a valid written proxy with a later date than the previous proxy; (2) notify the Secretary of Alleghany in writing that you have revoked your proxy (using the address in the Notice of Annual Meeting of Stockholders above); or (3) vote in person by written ballot at the 2016 Annual Meeting. If your shares are held in the name of a bank, broker or other holder of record, you must contact that holder of record to revoke a previously authorized proxy.

Q:	*How many shares must be present to conduct the 2016 Annual Meeting?*

A quorum comprising the holders of a majority of the outstanding shares of Alleghany’s common stock on the record date, or 7,724,876 shares, must be present in person or represented by proxy for the transaction of business at the 2016 Annual Meeting. Abstentions and “broker non-votes” (which are explained below) are counted as present to determine whether there is a quorum for the 2016 Annual Meeting.

Q:	*What if I am a beneficial owner and do not give instructions to my broker?*

If your shares are held in the name of a bank, broker or other holder of record, you are considered the beneficial owner of those shares, but not the record holder. As a beneficial owner, in order to ensure your shares are voted in the way you would like, you must provide voting instructions to your broker by the

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deadline provided in the proxy materials you receive from your broker. Under the rules of the New York Stock Exchange, or the “NYSE,” unless you provide specific voting instructions, your broker is not permitted to vote your shares on your behalf, except with respect to the ratification of the selection of our independent registered public accounting firm (Proposal 2). For your vote on any other matter to be counted, you will need to provide voting instructions to your broker before the date of the 2016 Annual Meeting using the instructions provided by your broker.

A “broker non-vote” occurs when your broker submits a proxy for your shares but does not indicate a vote for a particular proposal because the broker does not have authority to vote on that proposal and has not received voting instructions from you. “Broker non-votes” are counted as present to determine whether there is a quorum for the 2016 Annual Meeting, but are not counted as votes for or against the proposal in question or as abstentions, nor are they counted to determine the number of votes present for the particular proposal.

Q:	*What vote is required to pass each of the proposals at the 2016 Annual Meeting?*

Proposal 1: Election of Directors. Each of the two nominees for director who receives at least a majority of the votes cast with respect to the election of such nominee will be elected. Abstentions and broker non-votes will have no effect on the results of this vote. In accordance with the majority voting standard in Alleghany’s By-Laws, or the “By-Laws,” and the Corporate Governance Guidelines of Alleghany, or the “Corporate Governance Guidelines,” as a condition of his or her nomination, each nominee is required to tender to the Board at the time of nomination an irrevocable resignation, effective if such nominee does not receive the majority vote required by the By-Laws and the Board determines to accept such resignation. In the event that a director nominee fails to receive the requisite majority vote, the Nominating and Governance Committee will evaluate such resignation and make a recommendation to the Board as to whether it should accept the resignation.

Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm. The affirmative vote of a majority of the votes cast on this proposal is required to ratify the selection of our independent registered public accounting firm. Abstentions and broker non-votes will have no effect on the results of this vote.

Proposal 3: Advisory Vote on Executive Compensation. The affirmative vote of a majority of the votes cast on this proposal is required to approve the advisory resolution on executive compensation. Abstentions and broker non-votes will have no effect on the results of this vote. Although this proposal is non-binding on the Board, the Board and the Compensation Committee will review and consider the voting results when making future decisions about Alleghany’s executive compensation program.

Q:	*How does the Board recommend I vote?*

A:	The Board recommends that you vote as follows on each proposal:


Voting Matter		Board’s Recommendation
Proposal 1: Election of Directors		FOR each director nominee
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm		FOR
Proposal 3: Advisory Vote on Executive Compensation		FOR

Q:	*What happens if a nominee for director does not stand for election?*

If for any reason any nominee does not stand for election, any proxies we receive will be voted in favor of the remaining nominees and may be voted for a substitute nominee in place of the nominee who does not stand. We have no reason to expect that either of the nominees will not stand for election.

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Q:	*What happens if additional matters are presented at the 2016 Annual Meeting?*

If any matters other than the three items of business described in this Proxy Statement are properly presented for consideration at the 2016 Annual Meeting, persons named on the voting website and your proxy card will have discretion to vote for you on those matters. At the time this Proxy Statement was printed, we knew of no other matters to be raised at the 2016 Annual Meeting.

Q:	*Who nominates the directors?*

Karen Brenner and John G. Foos have been nominated by the Board for election as directors at the 2016 Annual Meeting. Each of the nominees is a current member of the Board and was recommended to the Board for nomination by the Nominating and Governance Committee. The Nominating and Governance Committee will receive at any time and will consider from time to time suggestions from stockholders as to proposed director candidates, as described under “Director Nominations and Qualifications” on pages 16 and 17. Additionally, stockholders may nominate individuals for election as directors in accordance with the requirements set forth in the By-Laws and described under “Stockholder Nominations and Proposals” on page 70.

Q:	*How are proxies solicited and what is the cost?*

We pay the cost of soliciting proxies for the meeting. Proxies may be solicited in person by our employees, or by mail, courier, telephone, facsimile or e-mail. In addition, we have retained Georgeson Shareholder Communications Inc. to aid in the solicitation of proxies by mail, courier, telephone, facsimile and e-mail. We expect to pay a fee of approximately $9,500 plus expenses to Georgeson Shareholder Communications Inc. for these services.

Q:	*What is householding? Does Alleghany use it?*

In accordance with a notice sent to eligible stockholders who share a single address, we are sending only one annual report to stockholders and one proxy statement to that address unless we received instructions to the contrary from any stockholder at that address. This practice, known as “householding,” is designed to reduce our printing and postage costs.

If, in the future, you wish to receive a separate annual report to stockholders and proxy statement, a separate copy may be obtained, without charge, upon written or oral request to the office of the Secretary, Alleghany Corporation, 7 Times Square Tower, New York, New York 10036, telephone number (212) 752-1356. Eligible stockholders of record who receive multiple copies of our annual report to stockholders and proxy statement can request householding by contacting us in the same manner. Stockholders who own shares through a bank, broker or other nominee can request householding by contacting the nominee. We hereby undertake to deliver promptly, upon written or oral request, a separate copy of the annual report to stockholders and proxy statement to a stockholder at a shared address to which a single copy of the document was delivered.

Q:	*Where can I find more information about Alleghany?*

Alleghany’s website address is www.alleghany.com. Alleghany makes available, free of charge on its website, the documents it files with the SEC. Also available on Alleghany’s website are its Financial Personnel Code of Ethics, Employee Code of Business Conduct and Ethics, Director Code of Business Conduct and Ethics, Corporate Governance Guidelines, and the charters for the Audit, Compensation and Nominating and Governance Committees. The information contained on Alleghany’s website is not included as a part of, or incorporated by reference into, this Proxy Statement.

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CORPORATE GOVERNANCE

Board of Directors

Pursuant to Alleghany’s Restated Certificate of Incorporation and By-Laws, the Board is divided into three separate classes of directors, which are required to be as nearly equal in number as practicable. At each Annual Meeting of Stockholders, one class of directors is elected to a term of three years. Currently, there are three standing committees of the Board, consisting of an Audit Committee, Compensation Committee and Nominating and Governance Committee. Additional information regarding these committees is set out on pages 13 through 15.

The Board currently consists of ten directors. Mr. Stephen P. Bradley, who has served as a director of Alleghany since 2012, and Mr. Thomas S. Johnson, who has served as a director of Alleghany since 1997 and for 1992-1993, are retiring from the Board effective at the 2016 Annual Meeting in accordance with Alleghany’s director retirement policy as described on page 17. In this regard, because Mr. Bradley and Mr. Johnson are not standing for re-election, in order to make the classes of the Board as nearly equal in size as practicable, the Board determined to nominate Mr. John G. Foos, who was last elected to the Board at the 2015 Annual Meeting of Stockholders, to stand for re-election at the 2016 Annual Meeting. As a result, the directors nominated by the Board for election at the 2016 Annual Meeting to the class of 2019 are Ms. Brenner and Mr. Foos. If both of Ms. Brenner and Mr. Foos are elected, the size of the Board will be reduced effective at the 2016 Annual Meeting from ten to eight directors.

We have strong director engagement on our Board. The Board held eight meetings in 2015. Each of our directors attended at least 96 percent of the meetings of the Board and committees of the Board on which he or she served in 2015, with nine of our current ten directors attending 100 percent of the Board and committee meetings. Executive sessions for independent directors are held at each regularly scheduled Board meeting. The Chairman of the Board, or the “Chairman,” who is currently an independent director, presides at these executive sessions. Alleghany does not have a policy with regard to attendance by directors at Annual Meetings of Stockholders. Two directors attended the 2015 Annual Meeting of Stockholders.

Director Independence

Pursuant to the NYSE’s listing standards, Alleghany is required to have a majority of independent directors, and no director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with Alleghany. The Board has determined that none of our directors, except Weston M. Hicks, our President and chief executive officer, has any material relationship with Alleghany other than in their capacities as members of the Board and committees thereof, and thus are independent directors of Alleghany. Therefore, nine of Alleghany’s ten current directors are independent directors. Both of the director nominees, Ms. Brenner and Mr. Foos, are independent. Following the retirement of Mr. Bradley and Mr. Johnson at the 2016 Annual Meeting, and assuming that both Ms. Brenner and Mr. Foos are elected, the size of the Board will be reduced effective at the 2016 Annual Meeting from ten to eight directors, seven of whom will be independent.

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Committees of the Board of Directors

Committee Membership

The following table sets forth the current members of each of the committees and the number of meetings held during 2015:


Name	Audit	Compensation	Nominating and Governance
Stephen P. Bradley	ü		ü
Karen Brenner	ü		Chair
Ian H. Chippendale		Chair
John G. Foos	ü		ü
Thomas S. Johnson		ü	ü
William K. Lavin	Chair	ü
Phillip M. Martineau		ü	ü
Raymond L.M. Wong	ü	ü
2015 meetings	7	6	5

The Board has determined that each committee member is independent as defined in the NYSE’s listing standards with respect to membership on each committee on which he or she serves. The Board also has determined that each member of the Audit Committee has the qualifications set forth in the NYSE’s listing standards regarding financial literacy and accounting or related financial management expertise, and is an audit committee financial expert as defined by the SEC.

Committee Responsibilities

Each of the committees listed below operates pursuant to a charter, a copy of which is available on Alleghany’s website at www.alleghany.com or may be obtained, without charge, upon written request to the Secretary of Alleghany at Alleghany’s principal executive offices. The primary functions of each committee are as follows:

Board Committee

Responsibilities

Audit Committee

• Directly responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm, including approving in advance all audit services and permissible non-audit services to be provided by the independent registered public accounting firm.

• Directly responsible for the evaluation of such firm’s qualifications, performance and independence.

• Reviews and makes reports and recommendations to the Board with respect to the following matters:

• the audited consolidated annual financial statements of Alleghany and its subsidiaries, including Alleghany’s specific disclosures under MD&A, and critical accounting estimates, to be included in Alleghany’s Annual Report on Form 10-K filed with the SEC, and whether to recommend this inclusion;

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Board Committee		Responsibilities
		• the unaudited consolidated quarterly financial statements of Alleghany and its subsidiaries, including MD&A, to be included in Alleghany’s Quarterly Reports on Form 10-Q filed with the SEC; • Alleghany’s policies with respect to risk assessment and risk management; • the adequacy and effectiveness of Alleghany’s internal control over financial reporting and disclosure controls and procedures; • the compensation, activities and performance of Alleghany’s internal auditor; and • the quality and acceptability of Alleghany’s accounting policies, including critical accounting estimates and practices and the estimates and assumptions used by management in the preparation of Alleghany’s financial statements.
Compensation Committee		• Administers Alleghany’s executive compensation program, including Alleghany’s 2007 Long-Term Incentive Plan, or the “2007 LTIP,” 2012 LTIP, the 2010 MIP, and 2015 Management Incentive Plan, or the “2015 MIP.” • Reviews and approves the financial goals and objectives relevant to the compensation of the chief executive officer; evaluates the chief executive officer’s performance in light of such goals and objectives; and determines the chief executive officer’s compensation based on such evaluation. • Reviews the annual recommendations of the chief executive officer concerning: • the compensation of the other Alleghany officers and proposed adjustments to such officers’ compensation; and • the adjustments proposed to be made to the compensation of the three most highly paid officers of each Alleghany operating subsidiary as recommended by the compensation committee or board of directors (as applicable) for each such operating subsidiary. • Reports on the actions described above to the Board and makes recommendations with respect to such actions to the Board as the committee may deem appropriate. • Reviews the compensation of the directors on an annual basis, including compensation for service on committees of the Board, and proposing changes, as appropriate, to the Board.

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Board Committee

Responsibilities

Nominating and Governance Committee

• Identifies and screens director candidates, consistent with criteria approved by the Board.

• Makes recommendations to the Board as to persons to be (i) nominated by the Board for election to the Board by stockholders or (ii) chosen by the Board to fill newly created directorships or vacancies on the Board.

• Develops and recommends to the Board a set of corporate governance principles applicable to Alleghany.

• Oversees the evaluation of the Board, individual directors and Alleghany’s management.

Board Tenure

We believe that it is important to achieve an appropriate balance on the Board between the number of our longer-tenured directors who have a deep knowledge of Alleghany, and the number of newer directors who provide fresh perspectives. The chart below shows the breakdown by years of service on the Board. To help spur periodic change on the Board, our Corporate Governance Guidelines set a mandatory retirement age, as described on page 17, after which directors may no longer be nominated or re-nominated to the Board.

LOGO

Board Leadership

Currently, the position of Chairman and the position of President and chief executive officer are separate. It is the policy of the Board that the Chairman should not be an Alleghany officer. The current Chairman is an independent director. Pursuant to the Corporate Governance Guidelines, the duties of the Chairman include providing leadership to the Board in managing the business of the Board and ensuring that there is an effective structure for the operation of the Board and its committees. The Board believes that its leadership structure is appropriate given the composition of the Board and management, the Corporate Governance Guidelines and the tenure of a majority of the Board members.

Chief Executive Officer and Senior Management Succession Planning

A key responsibility of our chief executive officer and Board in the area of risk management is ensuring that an effective process is in place to provide continuity of leadership over the long-term. At least once each year, our Board conducts a review of chief executive officer and senior management succession planning. During this review, the chief executive officer provides the Board with recommendations on, and evaluations of, potential chief executive officer and senior management successors, succession timing for those positions, and

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development plans for the potential successors. Our Board reviews potential internal senior management candidates with our chief executive officer, including the qualifications, experience and development priorities for these individuals. Further, our Board periodically reviews the overall composition of our senior management’s qualifications, tenure and experience.

Our Board, in coordination with our Nominating and Governance Committee, also establishes steps to address emergency chief executive officer and senior management succession planning in extraordinary circumstances. Our emergency chief executive officer succession planning is intended to enable us to respond to unexpected position vacancies, including those resulting from a major catastrophe, by continuing our operation and minimizing potential disruption or loss of continuity to our business and operations.

Board Evaluation

Each year, the Board and each of its committees conducts an evaluation of their respective performance, effectiveness and fulfillment of fiduciary duties. The evaluation process is overseen by the Nominating and Governance Committee and is reviewed annually to determine whether it is designed effectively and assure that appropriate feedback is being sought and reviewed. The Board evaluation is done anonymously to encourage candid feedback, supplemented by individual director interviews with the Chairman. The results of the Board and committee evaluations are reported to and reviewed by the full Board. In general, in 2015 the Board and each committee were satisfied with their respective performance and considered themselves to be operating effectively, with appropriate balance among governance, oversight, strategic and operational matters.

Board Role in Risk Oversight

The Board oversees risk management directly and through its committees. In addition, Alleghany management has several committees that it uses to monitor and manage risk at Alleghany and its subsidiaries, including an Enterprise Risk Management, or “ERM,” Committee, Reinsurance Security Committee and Ethics and Legal Compliance Committee. Alleghany management regularly reports to the Board and, as appropriate, to its committees on management’s risk activities, Alleghany’s exposure and risk assessments. ERM is a standing agenda item at each Board meeting and the chief risk officer, Alleghany management and Board discuss existing and emerging risks, controls and procedures, risk assessments and initiatives at such meetings. Each year, at the Board’s January meeting, the Board receives a formal report on enterprise risk management from Alleghany’s chief risk officer and, at the same meeting, considers Alleghany’s three-year financial estimates and the evaluation of the President and chief executive officer, allowing the Board to consider risk and risk management in the context of Alleghany’s strategic plan and management’s performance. Each year, at the Audit Committee’s June meeting, it receives a formal report on enterprise risk management from Alleghany’s chief risk officer and a formal report on legal compliance from Alleghany’s chief compliance officer, which are also copied to the Board, and the chief risk officer and chief compliance officer subsequently report thereon to the Board. The Board receives updates on material developments with respect to risk management and legal compliance matters at its other regularly scheduled meetings. The Compensation Committee regularly monitors compensation policies, practices and outstanding awards to determine whether Alleghany’s risk management and incentive objectives are being met with respect to group-wide employee incentives. The Board believes that risk oversight is a responsibility of the entire Board, and it does not look to any individual director or committee to lead it in discharging this responsibility.

Directors Nominations and Qualifications

The Nominating and Governance Committee identifies and recommends candidates for election to the Board, consistent with criteria approved by the Board. The Board has not approved any specific criteria that must be met by each director nominee nor established a procedure for identifying and evaluating nominees for director. The Board believes that establishing such criteria is best left to an evaluation of Alleghany’s needs at the time that a nomination is considered. The Board generally seeks members with diverse business and professional backgrounds and outstanding integrity and judgment, and such other skills and experience as will enhance the Board’s ability to best serve Alleghany’s interests. As a general matter, the Nominating and Governance Committee does consider diversity in identifying and evaluating possible nominees for director.

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The Nominating and Governance Committee will receive at any time and will consider from time to time suggestions from stockholders as to proposed director candidates. In this regard, a stockholder may submit a recommendation regarding a proposed director nominee in writing to the Nominating and Governance Committee in care of the Secretary of Alleghany at Alleghany’s principal executive offices. Any such persons recommended by a stockholder will be evaluated in the same manner as persons identified by the Nominating and Governance Committee.

A director is required to notify the Nominating and Governance Committee when a director’s principal occupation or business association changes substantially. The Nominating and Governance Committee will consider whether any such change may materially interfere with the director’s service as a director of Alleghany and make a recommendation to the Board in this regard.

Communications with Directors

Interested parties may communicate directly with any individual director, the independent directors as a group or the Board as a whole by mailing such communication to the Secretary of Alleghany at Alleghany’s principal executive offices. Any such communications will be delivered unopened:

•

if addressed to a specific director, to such director;

•

if addressed to the independent directors, to the Chairman of the Nominating and Governance Committee who will report thereon to the independent directors; or

•

if addressed to the Board, to the Chairman of the Board who will report thereon to the Board.

Director Retirement Policy

Alleghany’s retirement policy for directors provides that a director must retire from the Board at the next Annual Meeting of Stockholders following his or her 75^th birthday.

Codes of Ethics

Alleghany has adopted an Employee Code of Business Conduct and Ethics for all employees of Alleghany and its subsidiaries, a Financial Personnel Code of Ethics for its chief executive officer, chief financial officer, chief accounting officer and all other officers in its Finance Department, a Director Code of Business Conduct and Ethics for members of the Board, and the Corporate Governance Guidelines. A copy of each of these documents is available on Alleghany’s website at www.alleghany.com or may be obtained, without charge, upon written request to the Secretary of Alleghany at Alleghany’s principal executive offices. Alleghany will disclose on its website any substantive amendments to its codes of ethics and any waivers from the provisions of its codes of ethics made with respect to its chief executive officer, chief financial officer or chief accounting officer (or persons performing similar functions), as well as with respect to any other executive officer or any director of Alleghany.

Majority Election of Directors

The By-Laws provide for a majority voting standard for the election of directors for uncontested elections. In connection with such provision of the By-Laws, the Corporate Governance Guidelines provide that a director nominee, as a condition of his or her nomination, shall tender to the Board at the time of nomination an irrevocable resignation effective if such nominee fails to receive the majority vote required by the By-Laws and the Board determines to accept such resignation. In the event that a director nominee fails to receive the requisite majority vote, the Nominating and Governance Committee will evaluate such resignation in light of Alleghany’s

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best interests and make a recommendation to the Board as to whether it should accept the resignation. In making its recommendation, the Nominating and Governance Committee may consider any factors it deems relevant, including:

•

the director’s qualifications;

•

the director’s past and expected future contributions to Alleghany;

•

the overall composition of the Board; and

•

whether accepting the tendered resignation would cause Alleghany to fail to meet any applicable rule or regulation, including the NYSE’s listing standards and federal securities laws.

The Board, by vote of independent directors other than the director whose resignation is being evaluated, will act on the tendered resignation and will publicly disclose its decision and rationale within 90 days following certification of the stockholder vote.

Director Stock Ownership Guidelines

Directors are expected to achieve ownership of common stock, or restricted stock units, having an aggregate value (based upon the higher of market value or book value) equal to at least five times the annual board retainer within five years of election to the Board, and to maintain such a level thereafter.

Hedging and Pledging Policies

Alleghany maintains a policy on insider trading and compliance that prohibits directors from directly or indirectly purchasing or using financial instruments designed to hedge or offset any decrease in the market value of Alleghany securities that they own. In addition, under such policy, directors are prohibited from pledging Alleghany securities as collateral.

Related Party Transactions

The Board has adopted a written Related Party Transaction Policy, or “the Policy.” Pursuant to the Policy, all related party transactions must be approved in advance by the Board. Under the Policy, a related party transaction means any transaction, other than compensation for services as an officer or director authorized and approved by the Compensation Committee or the Board, in which Alleghany or any of its subsidiaries is a participant and in which any of the following persons has or will have a direct or indirect material interest:

•

any director or officer of Alleghany; or

•

any immediate family member of such director or officer, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and any person (other than a tenant or employee) sharing the household of such director or officer.

A person who has a position or relationship with a firm, corporation or other entity may be deemed to have an indirect interest in any transaction in which that entity engages. However, a person is not deemed to have an interest if such interest arises only from such person’s position as a director of another corporation and/or such person’s direct and indirect ownership of less than 10% of the equity of such firm, corporation or other entity.

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Under the Policy, all newly proposed related party transactions are referred to the Nominating and Governance Committee for review and consideration of its recommendation to the Board. Following this review, the related party transaction and the Nominating and Governance Committee’s analysis and recommendations are presented to the full Board (other than any directors interested in the transaction) for approval. The Nominating and Governance Committee reviews existing related party transactions annually, with the goals of ensuring that such transactions are being pursued in accordance with all of the understandings and commitments made at the time they were approved, ensuring that payments being made with respect to such transactions are appropriately reviewed and documented, and reaffirming that such transactions remain in the best interests of Alleghany. The Nominating and Governance Committee reports any such findings to the Board.

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PRINCIPAL STOCKHOLDERS

The following table sets forth the beneficial ownership of each person who, based upon filings made by such person with the SEC, as of March 1, 2016, was the beneficial owner of more than five percent of the outstanding common stock.


	Amount and Nature of Beneficial Ownership of Common Stock(1)
Name and Address of Beneficial Owner	Sole Voting Power and/or Sole Investment Power		Shared Voting Power and/or Shared Investment Power		Total			Percent of Class
BlackRock, Inc.		1,346,829		—		1,346,829	(2)		8.6
55 East 52^nd Street New York, NY 10022
The Vanguard Group		1,013,420		17,208		1,030,628	(3)		6.6
100 Vanguard Boulevard Malvern, PA 19355

(1)	As of March 1, 2016, there were 15,449,750 shares of common stock outstanding.

(2)	According to an amendment dated January 20, 2016 to a Schedule 13G statement filed by BlackRock, Inc., an investment advisory company (“BlackRock”), BlackRock has sole voting power over 1,218,480 shares of common stock and sole dispositive power over 1,346,829 shares of common stock.

(3)

According to an amendment dated February 10, 2016 to a Schedule 13G statement filed by The Vanguard Group, an investment adviser (“Vanguard”), Vanguard has sole voting power over 14,808 shares of common stock, sole dispositive power over 1,013,420 shares of common stock and shared dispositive power over 17,208 shares of common stock.

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EXECUTIVE OFFICERS

The name, age, current position, date elected and prior business experience of each of the Named Executive Officers is as follows:


Name	Age		Current Position (date elected)	Prior Business Experience
Weston M. Hicks		59	President and chief executive officer (since December 2004)	Executive Vice President, Alleghany (October 2002 to December 2004).

Joseph P. Brandon		57	Executive Vice President (since March 2012)	Consultant to Alleghany (September 2011 to March 2012); private investor (May 2008 to August 2011); Chairman and Chief Executive Officer, General Re Corporation, a property and casualty reinsurer and a wholly-owned subsidiary of Berkshire Hathaway Inc. (September 2001 to April 2008).

Christopher K. Dalrymple		48	Senior Vice President (since January 2012), General Counsel (since July 2009) and Secretary (since January 2011)	Vice President, Alleghany (December 2004 to January 2012); Associate General Counsel, Alleghany (March 2002 to July 2009) Assistant Secretary; Alleghany (March 2002 to January 2011).

Roger B. Gorham		53	Senior Vice President — Head of Fixed Income and Treasurer (since May 2013)	Senior Vice President — Finance and Investments and chief financial officer, Alleghany (January 2006 to May 2013); Senior Vice President — Finance and chief financial officer, Alleghany (May 2005 to January 2006); Senior Vice President — Finance, Alleghany (December 2004 to May 2005).

John L. Sennott, Jr.		50	Senior Vice President (since April 2013) and chief financial officer (since May 2013)	Consultant (April 2012 to April 2013); Executive Vice President and Chief Corporate Strategy Officer (January 2010 to April 2012) and Chief Operating Officer (October 2008 to January 2010), Allied World Assurance Company Holdings, AG, a property and casualty (re)insurer.

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SECURITIES OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth, as of March 1, 2016, the beneficial ownership of common stock of each of the nominees named for election as a director, each of the other current directors, each of the executive officers named in the Summary Compensation Table on page 54 and all nominees, directors and executive officers as a group.


			Amount and Nature of Beneficial Ownership of Common Stock
Name of Beneficial Owner	Sole Voting Power and/or Sole Investment Power		Shared Voting Power and/or Shared Investment Power		Total			Percent of Class
Stephen P. Bradley		1,696		—		1,696	(1)		*
Joseph P. Brandon		1,000		23,032		24,032	(2)		*
Karen Brenner		3,961		—		3,961	(1)		*
Ian H. Chippendale		1,696		—		1,696	(1)		*
Christopher K. Dalrymple		31		4,000		4,031	(3)		*
John G. Foos		1,696		648		2,344	(1)(4)		*
Roger B. Gorham		7,150		—		7,150			*
Weston M. Hicks		46,751		18,919		65,670	(5)		*
Thomas S. Johnson		10,154		—		10,154	(1)		*
Jefferson W. Kirby		92,163		396,677		488,840	(1)(6)		3.17
William K. Lavin		6,006		—		6,006	(1)		*
Phillip M. Martineau		4,070		—		4,070	(1)		*
John L. Sennott, Jr.		—		3,150		3,150			*
Raymond L.M. Wong		8,692		1,500		10,192	(1)(7)		*
All nominees, directors and executive officers as a group (14 persons)		185,066		447,926		632,992			4.1(8)

*	Represents less than 1.0%.

(1)

Includes 3,654 shares of common stock in the case of Messrs. Johnson, Lavin, and Mr. Kirby, 3,102 shares of common stock in the case of Mr. Wong, 1,510 shares of common stock in the case of Ms. Brenner and Mr. Martineau and 500 shares of common stock in the case of Messrs. Bradley, Chippendale and Foos, issuable under stock options granted pursuant to the 2015 Directors’ Stock Plan (the “2015 Directors’ Plan”), Amended and Restated 2010 Directors’ Stock Plan (the “2010 Directors’ Plan”) and the 2005 Directors’ Stock Plan (the “2005 Directors’ Plan”).

(2)

Does not include any shares that may be issued upon the vesting of outstanding restricted stock units held by Mr. Brandon. Includes 23,002 shares of common stock held jointly with Mr. Brandon’s spouse, over which Mr. Brandon shares voting and investment power. Includes 30 shares of common stock held by Mr. Brandon’s children, over which Mr. Brandon shares investment power, and for which he disclaims beneficial ownership.

(3)	Includes 4,000 shares of common stock held jointly with Mr. Dalrymple’s spouse, over which Mr. Dalrymple shares voting and investment power.

(4)	Includes 648 shares of common stock held jointly with Mr. Foos’ spouse, over which Mr. Foos shares voting and investment power.

(5)	Includes 18,919 shares of common stock held by trusts over which Mr. Hicks has voting and investment control.

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(6)

Includes 159,097 shares of common stock held by trusts of which Mr. Kirby is co-trustee and beneficiary and shares voting and investment power as to such shares; 27,586 shares as to which Mr. Kirby is sole trustee and beneficiary and over which Mr. Kirby has sole voting and investment power; and 237,015 shares held by the Fred M. Kirby II Residuary Trust. Mr. Kirby is co-trustee of the Fred M. Kirby II Residuary Trust and shares voting and investment power as to such shares. Also includes 19 shares held by Mr. Kirby’s spouse, over which Mr. Kirby shares voting and investment power, 546 shares held by Mr. Kirby’s children, over which Mr. Kirby shares voting and investment power, and 23 shares were held by a limited liability company with Mr. Kirby exercising sole voting and investment power in respect of such shares.

(7)	Includes 600 shares of common stock owned by Mr. Wong’s children, over which Mr. Wong shares voting and investment power, and 900 shares of common stock held by a trust of which Mr. Wong shares voting and investment power.

(8)	Based on the number of shares of outstanding common stock as of March 1, 2016, adjusted in the case of each director to include shares of common stock issuable within 60 days upon exercise of stock options held by such director.

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Section 16(a) Beneficial Ownership Reporting Compliance

Alleghany has determined that, except as set forth below, no person who at any time during 2015 was a director, officer or beneficial owner of more than 10% of common stock failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act of 1934, as amended, or the “Exchange Act,” during 2015. This determination is based solely upon Alleghany’s review of Forms 3, 4 and 5, and written representations that no Form 5 was required, which such persons submitted to Alleghany during or with respect to 2015. Weston M. Hicks filed a Form 4 on April 2, 2015 reporting a transaction that occurred on January 2, 2015.

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PROPOSAL 1. ELECTION OF DIRECTORS

Nominees for Election

Karen Brenner and John G. Foos have been nominated by the Board for election as directors at the 2016 Annual Meeting, each to serve for a term of three years, until the 2019 Annual Meeting of Stockholders and until her or his successor is duly elected and qualified. Each of the nominees is a current member of the Board and was recommended to the Board for nomination by the Nominating and Governance Committee. Following the 2016 Annual Meeting, Mr. Bradley and Mr. Johnson, members of the class of 2016, will no longer serve as directors of Alleghany. Mr. Foos was last elected to the Board at the 2015 Annual Meeting held on April 24, 2015, and has been added by the Board to the class of directors standing for re-election at the 2016 Annual Meeting in order to make the classes of the Board as nearly equal in size as practicable. Ms. Brenner was last elected by stockholders at the 2013 Annual Meeting of Stockholders held on April 26, 2013.

Information about Voting

Proxies received from Alleghany stockholders of record will be voted for the election of the two nominees named above as Alleghany directors unless such stockholders indicate otherwise. If any of the foregoing nominees is unable to serve for any reason, which is not anticipated, the shares represented by proxy may be voted for such other person or persons as may be determined by the holders of such proxy unless stockholders indicate otherwise. A nominee for director shall be elected to the Board if such nominee receives the affirmative vote of a majority of the votes cast with respect to the election of such nominee. A majority of votes cast means the number of votes cast “for” a nominee’s election must exceed the number of votes cast “against” the nominee’s election. Abstentions and broker non-votes (see page 10) do not count as votes cast “for” or “against” the nominee’s election, but will be counted as present at the meeting for quorum purposes.

Director Qualifications

The following information includes for each of the nominees named for election as director at the 2016 Annual Meeting, and each of the other directors of Alleghany:

•

age;

•

year first elected as a director of Alleghany;

•

principal occupation and/or other business experience for the past five years;

•

other public company directorships during the past five years; and

•

experience, qualifications, attributes and skills.

In addition to the information regarding the specific experience, qualifications, attributes and skills that led the Board to the conclusion that each of the nominees named for election as director should be elected as a director of Alleghany, Alleghany believes that each of the nominees, and each of the other directors of Alleghany, has a reputation for integrity, honesty and adherence to high ethical standards. Alleghany also believes that each of the nominees, and each of the other directors of Alleghany, has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment to service to Alleghany and to the Board.

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Nominees for Election


Karen Brenner Age 60 Director since 2009 Chair of the Nominating and Governance Committee Member of the Audit Committee				Ms. Brenner has been an Executive Director of Law and Business Initiatives at New York University since 2012 and Clinical Professor of Business at the Leonard N. Stern School of Business at New York University since 2008. She teaches professional responsibility in law and business, corporate governance in law and business and corporate transformation and leadership. Ms. Brenner also has been a principal at Brenner & Company, a financial management and advisory firm she founded, since 1998. Ms. Brenner’s qualifications to serve on the Board also include her years of business experience as Chairman/Chief Executive Officer and/or board member of public and private companies in a wide variety of industries, and as an advisor to private equity firms, venture capital companies, boards of directors and chief executive officers focusing on enhancing value of operating companies, and her experience in corporate governance and management issues.

John G. Foos Age 66 Director since 2012 Member of the Audit Committee Member of the Nominating and Governance Committee				Mr. Foos was Chief Financial Officer of Independence Blue Cross, a health insurance company, from 1989 until his retirement in November 2008. In addition, Mr. Foos currently serves as a director of Blue Cross Blue Shield of South Carolina, a South Carolina-owned and operated health insurance carrier, the HAI Group Companies, a provider of niche insurance programs and services for the public and affordable housing community, and Emerald Shelter Group, a not-for-profit that provides healthcare and affordable housing. Mr. Foos served as a director and Chairman of the Board of Directors of Plan Investment Fund during the past five years and was a director of Transatlantic Holdings, Inc. prior to March 6, 2012. Mr. Foos’ qualifications to serve on the Board also include his extensive experience in and knowledge of accounting and finance, which includes service as the Chief Financial Officer of Independence Blue Cross, in addition to his prior experience as a Partner with KPMG LLP and his financial literacy.

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Other Alleghany Directors


Stephen P. Bradley Age 74 Director since 2012 Member of the Audit Committee Member of the Nominating and Governance Committee Retiring effective at the 2016 Annual Meeting				Mr. Bradley is currently the William Ziegler Professor of Business Administration Emeritus at the Harvard Business School where he has been a professor since 1968. In addition, Mr. Bradley currently serves as a director of CRICO/Risk Management Foundation, a medical professional liability carrier. Mr. Bradley was a director of Transatlantic Holdings, Inc. prior to March 6, 2012 and also previously served as a director of CIENA Corp. and i2 Technologies, Inc. Mr. Bradley’s qualifications to serve on the Board also include his academic experience at the Harvard Business School relating to his work as a professor of competitive and corporate strategy and his considerable experience as a consultant and as a director of public companies.
Ian H. Chippendale Age 67 Director since 2012 Chairman of the Compensation Committee Term expires in 2017				Mr. Chippendale is the retired Chairman (from September 2003 to December 2006) of RBS Insurance Group, Ltd., an insurance company. In addition, Mr. Chippendale served as a director of HomeServe plc, an insurance company, from January 2007 through March 2015 and was a director of Transatlantic Holdings, Inc. prior to March 6, 2012. Mr. Chippendale’s qualifications to serve on the Board also include his insurance industry knowledge and his international experience, including his service as the Chairman of RBS Insurance Group, Ltd.
Weston M. Hicks Age 59 Director since 2004 Term expires in 2017				Mr. Hicks has been Alleghany’s President and chief executive officer since December 2004. In addition, Mr. Hicks is a director of AllianceBernstein Corporation, an investment management and research company. Mr. Hicks’s qualifications to serve on the Board also include his years of experience as an executive in the insurance and financial services industry, particularly his experience as Alleghany’s President and chief executive officer during the past eleven years, and his experience as an analyst of propertyand casualty insurance companies.

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Thomas S. Johnson Age 75 Director since 1997 and for 1992-1993 Member of the Compensation Committee Member of the Nominating and Governance Committee Retiring effective at the 2016 Annual Meeting				Mr. Johnson was Chairman and Chief Executive Officer of GreenPoint Financial Corporation and its subsidiary GreenPoint Bank from 1993 until his retirement on December 31, 2004. Mr. Johnson currently serves as a director of Santander Holdings USA, Inc., a subsidiary of global commercial and retail bank Banco Santander, S.A., and as a director of Santander Bank, N.A., a subsidiary of Santander Holdings USA, Inc. Mr. Johnson previously served as a director of the Lower Manhattan Development Corporation, the Institute of International Education, The Phoenix Companies, Inc., R.R. Donnelly & Sons Company and the Federal Home Loan Mortgage Corporation. Mr. Johnson’s qualifications to serve on the Board also include his over 30 years of experience as a financial services industry executive, particularly as Chairman and Chief Executive Officer of GreenPoint Financial Corporation, his experience as a member of the boards of directors of other companies and his financial literacy.
Jefferson W. Kirby Age 54 Director since 2006 Term expires in 2017				Mr. Kirby has been Chairman of the Board of Alleghany since July 2010. Mr. Kirby has been the Managing Member of Broadfield Capital Management, LLC, an investment advisory services company, since July 2003. Mr. Kirby was a director of Somerset Hills Bancorp from 2008 until May 2013. Mr. Kirby’s qualifications to serve on the Board also include his over 25 years of experience in financial services and investment management, including his service as a Vice President of Alleghany from 1994 until June 2003 and as an investment manager.
William K. Lavin Age 71 Director since 1992 Chairman of the Audit Committee Member of the Compensation Committee Term expires in 2018				Mr. Lavin has been a financial consultant since October 1994, and currently serves as a director of Artisanal Brands, Inc., a specialty foods company. Mr. Lavin’s qualifications to serve on the Board also include his business experience as an executive with public and private companies, his extensive experience with public and financial accounting matters for such companies and his financial literacy.

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Phillip M. Martineau

Age 68

Director since 2009

Member of the Compensation Committee

Member of the

Nominating and

Governance Committee

Term expires in 2018

Mr. Martineau was Chairman, President and Chief Executive Officer of Pittsburgh Corning Corporation and Pittsburgh Corning Europe, building materials companies, from June 2005 until his retirement in May 2014. Prior to that, Mr. Martineau was Chief Executive Officer and a director of High Voltage Engineering Corporation, or “High Voltage,” a designer and manufacturer of power control systems, from December 2004 until February 2005. The Board of Directors of High Voltage hired Mr. Martineau as Chief Executive Officer to lead High Voltage through a restructuring under Chapter 11 of the U.S. Bankruptcy Code, which resulted in its sale to Siemens in February 2005.

Mr. Martineau’s qualifications to serve on the Board also include his years of executive operational experience with global companies in the materials and manufacturing sectors, particularly his experience as a Chief Executive Officer of such companies, as well as his experience serving on the boards of directors of other companies.

Raymond L.M. Wong

Age 63

Director since 2006

Member of the Audit Committee

Member of the Compensation Committee

Term expires in 2018

LOGO

Mr. Wong is currently a Managing Director of Spring Mountain Capital, LP, an investment management company which he joined in 2007. Prior to that, from 2002 until 2007, Mr. Wong was the Managing Member of DeFee Lee Pond Capital LLC, a financial advisory and private investment company. In addition, Mr. Wong is a director of American Power Group Corporation, an energy technology company, Oncoceutics Inc., a biopharmaceutical company, and Hurel Corporation, a bioanalytic tools company.

Mr. Wong’s qualifications to serve on the Board also include his business experience, particularly his 25 years as a managing director in the investment banking group of Merrill Lynch & Co., Inc., and his financial literacy.

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Compensation of Directors

The information under this heading relates to the compensation during 2015 of those non-employee directors who served on the Board at any time during 2015. Employee directors are not separately compensated for their service on the Board.

2015 Director Compensation


Name	Fees Earned or Paid in Cash		Stock Awards(1)		Total
Rex D. Adams(2)	$	13,500		—	$	13,500
Stephen P. Bradley		107,000	$	140,000		247,000
Karen Brenner		109,500		140,000		249,500
Ian H. Chippendale		100,000		140,000		240,000
John G. Foos		107,000		140,000		247,000
Thomas S. Johnson		102,000		140,000		242,000
Jefferson W. Kirby		145,000		140,000		285,000
William K. Lavin		125,000		140,000		265,000
Phillip M. Martineau		102,000		140,000		242,000
Raymond L.M. Wong		110,000		140,000		250,000

(1)

Represents the grant date fair value of the award of 289 shares of restricted common stock or 289 restricted stock units (each equivalent to one share of common stock) made to each non-employee director under the 2015 Directors’ Plan on April 27, 2015, and computed in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 718 (“ASC 718”). Pursuant to the 2015 Directors’ Plan, the number of shares or restricted stock units are calculated by dividing the number of shares or restricted stock units equal to $140,000 (as determined by the Board in accordance with the 2015 Directors’ Plan) by the average of the closing sales prices of the common stock on the 30 consecutive trading days preceding the grant date as reported by the NYSE. As of December 31, 2015, each director held either 289 shares of unvested restricted common stock or 289 unvested restricted stock units.

(2)	Mr. Adams retired as a director in April 2015 and did not receive any awards of restricted stock or restricted stock units during 2015.

Fees Earned or Paid in Cash

Following is information regarding fees earned and paid in cash to directors for service on the Board and its Committees:


Board		• Each independent director other than the Chairman receives an annual retainer of $85,000. • The Chairman receives an annual retainer of $150,000.
Audit Committee		• The Chairman receives an annual fee of $30,000. • Each other member receives an annual fee of $15,000.
Compensation Committee		• The Chairman receives an annual fee of $15,000. • Each other member receives an annual fee of $10,000.
Nominating and Governance Committee		• The Chairman receives an annual fee of $12,000. • Each other member receives an annual fee of $7,000.

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Stock Awards

Pursuant to the 2015 Directors’ Plan, each year as of the first business day following an annual meeting of stockholders, each individual who was elected, re-elected or continues to serve as a member of the Board and who is not an employee of Alleghany or any of its subsidiaries receives, at the individual director’s election, either a number of shares of restricted common stock or restricted stock units (each equivalent to one share of common stock) equal to $140,000 (as determined by the Board in accordance with the 2015 Directors’ Plan) divided by the average of the closing sales prices of the common stock on the 30 consecutive trading days preceding the grant date as reported by the NYSE. Such shares of restricted common stock or restricted stock units, as the case may be, are subject to potential forfeiture until the first annual meeting of stockholders following the date of grant and are subject to restrictions upon transfer until the third anniversary of the date of grant.

On April 27, 2015, each eligible director received either 289 shares of restricted common stock or 289 restricted stock units, reflecting such number of shares or restricted stock units equal to $140,000 (as determined by the Board in accordance with the 2015 Directors’ Plan) divided by the average of the closing sales prices of the common stock on the 30 consecutive trading days preceding the grant date as reported by the NYSE. Each director is permitted to defer payment of the restricted stock units, and all whole restricted stock units will be paid in the form of whole shares of common stock.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE NOMINEES TO THE BOARD SET FORTH IN THIS PROPOSAL. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE. EACH NOMINEE SHALL BE ELECTED BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST WITH RESPECT TO THE ELECTION OF SUCH NOMINEE. A MAJORITY OF VOTES CAST MEANS THE NUMBER OF VOTES CAST “FOR” A NOMINEE’S ELECTION MUST EXCEED THE NUMBER OF VOTES CAST “AGAINST” THE NOMINEE’S ELECTION. ABSTENTIONS AND BROKER NON-VOTES WILL HAVE NO EFFECT ON THE RESULTS OF THIS VOTE.

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PROPOSAL 2. RATIFICATION OF SELECTION OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2016

The Audit Committee has selected Ernst & Young LLP, or “E&Y,” as Alleghany’s independent registered public accounting firm for fiscal 2016. Although ratification by stockholders is not a prerequisite to the ability of the Audit Committee to select E&Y as Alleghany’s independent registered public accounting firm, the Audit Committee and the Board believe that such ratification is desirable. If stockholders do not ratify the selection of E&Y, the Audit Committee will reconsider its selection of E&Y. The Audit Committee may, however, select E&Y notwithstanding the failure of stockholders to ratify its selection. Alleghany expects that representatives of E&Y will be present at the 2016 Annual Meeting, will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.

2015 and 2014 Fees

The following table summarizes the fees billed for professional audit services rendered by E&Y for the audit of Alleghany’s annual consolidated financial statements for 2015 and 2014 and fees for other services rendered by E&Y for 2015 and 2014.


	2015		2014
Audit Fees	$	4,410,000	$	3,809,500
Audit-Related Fees		49,000		167,000
Tax Fees		—		122,345
All Other Fees		—		—

Total	$	4,459,000	$	4,098,845

The amounts shown for “Audit Fees” represent the aggregate fees for professional services E&Y rendered for the audit of Alleghany’s annual consolidated financial statements for each of the last two fiscal years, the reviews of Alleghany’s financial statements included in its Quarterly Reports on Form 10-Q and the services provided in connection with statutory and regulatory filings during each of the last two fiscal years. “Audit Fees” also include fees for professional services E&Y rendered for the audit of the effectiveness of internal control over financial reporting. The amounts shown for “Audit-Related Fees” represent the fees billed in each of the last two fiscal years for assurance and related services that are reasonably related to the performance of the audit or review of Alleghany’s financial statements and that are not reported under “Audit Fees.” These services include consents and procedures for registration statements and responses to regulatory requests. The amounts shown for “Tax Fees” are for services performed in conjunction with a foreign tax inspection for years 2011 and prior.

Pre-Approval Policies and Procedures

Audit and permissible non-audit services that Alleghany’s independent registered public accounting firm may provide to Alleghany must be pre-approved by the Audit Committee or, between meetings of the Audit Committee, by its Chairman pursuant to authority delegated to him by the Audit Committee. The Chairman reports all pre-approval decisions made by him at the next meeting of the Audit Committee, and he has undertaken to confer with the Audit Committee to the extent that any engagement for which his pre-approval is sought is expected to generate fees for the independent registered public accounting firm in excess of $100,000. When considering the independence of the independent registered public accounting firm, the Audit Committee considers, among other matters, whether the provision of non-audit services by the independent registered public accounting firm to Alleghany is compatible with maintaining the independence of the independent registered public accounting firm. All audit and permissible non-audit services rendered in 2015 and 2014 were pre-approved pursuant to these procedures.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE. THIS PROPOSAL SHALL BE APPROVED BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST ON THIS PROPOSAL. ABSTENTIONS AND BROKER NON-VOTES WILL HAVE NO EFFECT ON THE RESULTS OF THIS VOTE.

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Audit Committee Report

The Audit Committee is currently composed of the five independent directors whose names appear at the end of this report. Management is responsible for Alleghany’s internal controls and the financial reporting process. Alleghany’s independent registered public accounting firm is responsible for performing an independent audit of Alleghany’s annual consolidated financial statements in accordance with generally accepted auditing standards and for issuing a report thereon. The Audit Committee’s responsibility is to monitor and review these processes and the activities of Alleghany’s independent registered public accounting firm. The Audit Committee members are not acting as professional accountants or auditors, and their responsibilities are not intended to duplicate or certify the activities of management and the independent registered public accounting firm or to certify the independence of the independent registered public accounting firm under applicable rules.

For fiscal 2015, Ernst & Young LLP acted as Alleghany’s independent registered public accounting firm. In this context, the Audit Committee has met to review and discuss Alleghany’s audited consolidated financial statements as of December 31, 2015 and for the fiscal year then ended, including Alleghany’s specific disclosure under management’s discussion and analysis of financial condition and results of operations and critical accounting estimates, with management and Ernst & Young LLP. The Audit Committee has discussed with Ernst & Young LLP the matters required to be discussed by Statement on Auditing Standard No. 16, “Communications with Audit Committees,” issued by the Public Company Accounting Oversight Board, or the “PCAOB.” Ernst & Young LLP reported to the Audit Committee regarding the critical accounting estimates and practices and the estimates and assumptions used by management in the preparation of the audited consolidated financial statements as of December 31, 2015 and for the fiscal year then ended, all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, the ramifications of use of such alternative treatments and the treatment preferred by Ernst & Young LLP.

Ernst & Young LLP provided a report to the Audit Committee describing Ernst & Young LLP’s internal quality-control procedures and related matters. Ernst & Young LLP also provided to the Audit Committee the written disclosures and the letter required by the applicable requirements of the PCAOB regarding Ernst & Young LLP’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with Ernst & Young LLP its independence. When considering Ernst Young LLP’s independence, the Audit Committee considered, among other matters, whether Ernst & Young LLP’s provision of non-audit services to Alleghany is compatible with maintaining the independence of Ernst & Young LLP. All audit and permissible non-audit services in 2015 and 2014 were pre-approved pursuant to these procedures.

Based on the reviews and discussions with management and Ernst & Young LLP referred to above, the Audit Committee has recommended to the Board that the audited consolidated financial statements as of December 31, 2015 and for the fiscal year then ended be included in Alleghany’s Annual Report on Form 10-K for such fiscal year.

William K. Lavin

Stephen P. Bradley

Karen Brenner

John G. Foos

Raymond L.M. Wong

Audit Committee of the Board of Directors

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PROPOSAL 3. ADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with Section 14A of the Exchange Act, we are providing stockholders with the opportunity to cast an advisory vote on the 2015 compensation we paid to the executive officers who are named in the Summary Compensation Table on page 54, also referred to as our “Named Executive Officers.” For 2015, Weston M. Hicks, Joseph P. Brandon, Christopher K. Dalrymple, Roger B. Gorham and John L. Sennott, Jr. were our Named Executive Officers.

Please read the Compensation Discussion and Analysis beginning on page 37 of this Proxy Statement as well as the Summary Compensation Table and other related compensation tables, notes and narrative appearing on pages 54 through 69 of this proxy statement, which provide detailed information on the compensation of our Named Executive Officers for 2015.

For a discussion of the results of past advisory votes on the compensation of our Named Executive Officers and the Compensation Committee’s response to such results, see “Compensation Discussion and Analysis — Compensation Committee Process — Advisory Vote on Executive Compensation” on page 44.

The Compensation Committee and the Board believe that Alleghany’s 2015 executive compensation program was designed appropriately and ensured that management’s interests were aligned with the interests of Alleghany stockholders. Accordingly, we are asking our stockholders to vote in favor of the following advisory resolution at the 2016 Annual Meeting:

RESOLVED, that the stockholders of Alleghany Corporation (“Alleghany”) approve, on an advisory basis, the compensation of Alleghany’s named executive officers as disclosed pursuant to Item 402 of Securities and Exchange Commission Regulation S-K in the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables, notes and narrative set forth in the proxy statement for Alleghany’s 2016 Annual Meeting of Stockholders.

Although this advisory vote, commonly referred to as “say-on-pay,” is not binding on Alleghany, the Compensation Committee or the Board, the Board and the Compensation Committee will review and consider the voting results when making future decisions about our executive compensation program.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has met to review and discuss with Alleghany’s management the specific disclosure contained under the heading “Compensation Discussion and Analysis” beginning on page 37. Based on its review and discussions with management regarding such disclosure, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in Alleghany’s Annual Report on Form 10-K for the year ended December 31, 2015.

Ian H. Chippendale

Thomas S. Johnson

William K. Lavin

Phillip M. Martineau

Raymond L.M. Wong

Compensation Committee of the Board of Directors

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EXECUTIVE COMPENSATION — TABLE OF CONTENTS


COMPENSATION DISCUSSION AND ANALYSIS			37
Compensation Philosophy and Objectives			37
2015 Compensation Program Summary			39
Alleghany Performance in 2015			40
Alleghany Long-Term Performance			41
Compensation Committee Process			43
Compensation Determination Timetable			43
Compensation Committee Advisors and Services			43
Advisory Vote on Executive Compensation			44
Elements of 2015 Compensation			45
Salary			45
Annual Cash Incentive Compensation			46
Long-Term Equity-Based Incentive Compensation			50
Performance Shares			50
Restricted Stock Units			51
Perquisites			51
Deferred Compensation Plan			51
Retirement Plan			52
Financial Statement Restatements			52
Hedging and Pledging Policies			52
Executive Officer Stock Ownership Guidelines			52
Tax Considerations			52
Compensation Policies and Practices Relating to Risk Management			53
EXECUTIVE COMPENSATION			54
Summary Compensation Table			54
Grants of Plan-Based Awards in 2015			57
Narrative Discussion Relating to the Summary Compensation Table and Grants of Plan-Based Awards Table			58
Outstanding Equity Awards at 2015 Fiscal Year-End			62
2015 Stock Vested			63
Nonqualified Deferred Compensation			63
Pension Benefits			65
Payments Upon Termination of Employment			67

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COMPENSATION DISCUSSION AND ANALYSIS

Compensation Philosophy and Objectives

Our financial objective in the current economic environment is to grow our common stockholders’ equity per share at rates of 7-10% over the long term without employing excessive amounts of financial leverage and without taking imprudent risks. Through our executive compensation program, we intend to provide compensation to our Named Executive Officers that is aligned with our corporate financial objective. Our compensation program is meant to provide reasonable amounts of compensation, weighted towards long-term incentive awards primarily based on performance that are capped with a reasonable upside to discourage imprudent risk taking or misaligned incentives.

For 2015, this compensation philosophy was evidenced by the following compensation highlights:

•

CEO total direct compensation (salary, annual incentive and long-term equity based awards) was $6.7 million, representing less than 0.9% of 2015 pre-tax earnings and approximately 0.1% of 2015 revenues, and total direct compensation for our Named Executive Officers as a group was $17.1 million, representing approximately 2.4% of 2015 pre-tax earnings and approximately 0.4% of 2015 revenues.

•

Mr. Hicks’s 2015 total direct compensation decreased by 10% from 2014 total direct compensation, due to a lower annual incentive payout for 2015.

•

Further, over the past three years, the Compensation Committee and the Board have taken the following actions, among others, to improve our executive compensation program and further align it with the interests of our stockholders:

•

freezing the Retirement Plan due to its retention benefits being outweighed by its significant benefit obligations and lack of a pay-for-performance element;

•

eliminating the Executive Post-Retirement Medical Plan (which provided post-retirement health insurance reimbursement benefits) for cost-control purposes and lack of a pay-for-performance element;

•

increasing the book value growth performance thresholds (described on page 51) and eliminating an adjustment for performance relative to the S&P 500 Index for long-term incentive awards;

•

adjusting Mr. Hicks’s compensation mix to be more tied to performance-based components, particularly long-term, performance-based equity awards, while keeping his total direct compensation substantially flat during this period; and

•

re-establishing the concept of “target” and “maximum” opportunities for annual incentive awards.

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Finally, we believe the following practices further align our compensation program with our stockholders’ interests:


What We Do

Our Incentive Awards are “Capped”		• Individual awards under our short and long-term incentive plans are “capped” at 150% of target and performance goals are set at realistic levels to eliminate the potential for unintended windfalls and to avoid encouraging the use of excessive financial leverage or taking of imprudent risks.

Robust Stock Ownership Guidelines		• We require our officers to own a substantial amount of our common stock, including five times base salary for Mr. Hicks, to ensure that they maintain a significant stake in our long-term success. In addition, our Named Executive Officers have significant exposure to Alleghany through unvested performance shares and, for some of our Named Executive Officers, shares of restricted stock and restricted stock units, the value of which is tied to the market price of our common stock.

We can “Claw Back” Compensation		• We have in place a compensation clawback policy applicable to our Named Executive Officers to further discourage imprudent risk taking.

We Limit Perquisites to Insignificant Amounts		• Our general practice is to not provide perquisites or other personal benefits to our Named Executive Officers. In 2015, no Named Executive Officer received more than $10,000 in perquisites or other personal benefits.

Independent Compensation Consultant		• The Compensation Committee retains an independent compensation consulting firm which provides no other services to Alleghany.
What We Don’t Do

No Stock Options		• We do not grant stock options.

No Accelerated Vesting of Performance Shares upon Termination or a Change-in-Control		• Performance share and restricted stock awards under long-term incentive plans do not provide for accelerated vesting in the event of a termination of employment by Alleghany, other than on a pro-rated basis for performance shares based on Alleghany performance through date of termination in the event of a termination without cause. • Awards under our short and long-term incentive plans do not provide for accelerated vesting upon a change-in-control.

No Hedging or Pledging of Stock		• We have in place a policy applicable to our Named Executive Officers that prohibits them from hedging or pledging Alleghany securities they hold.

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2015 Compensation Program Summary

2015 total direct compensation (salary, annual incentive and long-term equity based awards) for our Named Executive Officers are summarized below.


Annual Compensation Component	Key Features/Purpose	Amounts Involved
Salary	Provides a fixed amount of cash compensation. The Compensation Committee generally makes salary adjustments annually, based on salaries for the prior year, general inflation, individual performance and internal comparability considerations.

Annual Cash Incentives	Provides a pay-for-performance component for achievement of shorter-term objectives, with individual awards “capped” at 150% of target. The Compensation Committee determines individual results for participants and payouts based on overall financial and operational performance of management.

Long-Term Equity-Based Incentives	*Performance Shares: Provides pay-for-performance component focused on achievement of longer-term financial objective of increasing book value per share at rates of 7-10% over the long term without employing excessive amounts of financial leverage and without taking imprudent risks. Individual performance share awards are “capped” at 150% of target. Awards made in February 2015 pay out to participants based on the average annual compound growth in our book value per share from the award date through year-end 2018, with growth at 7% paying out at target, growth at 9% paying out at maximum and growth below 5% paying zero. Restricted Stock Units*: Grants of restricted stock units to our chief financial officer and General Counsel provide a retention element of total compensation and incent the prudence we desire them to have in their respective roles. The value of such awards depends on the market price of our common stock. The awards cliff-vest four years from date of grant.

	Total 2015 NEO Salary, Annual Incentive and LTIP Award Amount = $17.1 million

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In addition to the salary, annual cash incentives and long-term equity-based incentives described above, our Named Executive Officers receive an annual savings benefit under Alleghany’s deferred compensation plan, or the “Deferred Compensation Plan,” in an amount equal to 15% of base salary. Our Named Executive Officers who have completed five years of service with Alleghany or a subsidiary of Alleghany are eligible to receive a benefit under a retirement plan. Effective December 31, 2013, the retirement plan was closed to new participants, and no additional benefits for existing participants have accrued after such date.

Alleghany Performance in 2015

•

4.4% increase in common stockholders’ equity per share to $486.02 at 2015 year-end from $465.51 at 2014 year-end, summarized in more detail in the following table (dollars in millions):


	TransRe			RSUI			Other(1)			Total
Beginning equity	$	5,130		$	1,587		$	756		$	7,473
Operating income		408			148			(48	)		508
Net realized gains, after tax		94			54			(9	)		139
Impairment losses, after tax		(46	)		(15	)		(26	)		(87	)

Net earnings		456			187			(83	)		560
Other changes(2)		(126	)		(58	)		(50	)		(234	)
Capital transactions		(250	)		(150	)		156			(244	)

Ending equity		5,210			1,566			779			7,555
Operating Return on Equity		7.9	%		9.3	%		(6.3	)%		6.8	%
Growth in book value(3)		6.4	%		8.1	%		(18.4	)%		4.3	%
Growth in book value per share											4.4	%

(1)	CapSpecialty, Inc., or “CapSpecialty,” Pacific Compensation Corporation, or “PacificComp,” corporate assets, and Alleghany Capital Corporation, or “Alleghany Capital,” investments, net of holding company debt.

(2)	Principally the change in unrealized appreciation (depreciation) on investments, net of tax.

(3)	Dividends and share repurchases added back to ending equity.

•

Net earnings of $560.3 million in 2015, compared with $679.2 million in 2014, primarily reflecting higher other-than-temporary impairment losses in 2015 compared with 2014.

•

TransRe and RSUI, which together account for 90% of our consolidated stockholders’ equity, produced high single-digit returns on equity on an operating basis (excluding net realized capital gains or losses and other-than-temporary impairment charges). Investment returns, however, were weak in 2015 resulting in slightly lower growth in book value for each company relative to the return on equity, which is consistent with the lackluster performance of all investment classes generally in 2015.

•

The results for the “Other” column primarily reflect: (1) the relative underperformance of CapSpecialty and PacificComp (although each company improved significantly in 2015); (2) operating losses at Stranded Oil Resources Corporation; and (3) investments held for their total return (mostly equities) where dividend income is less than the cost of holding company debt.

•

Alleghany made progress in building Alleghany Capital’s portfolio of non-financial business investments by acquiring IPS.

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Alleghany Long-Term Performance


	Common Stockholders’ Equity Per Share($)⁽¹⁾		Annual Growth
						Rolling Annualized Average
Year						Three-Year			Ten-Year
2010		325.31		10.4			5.0			8.7
2011		342.12		5.2			8.6			7.7
2012		379.13		10.8			8.7			8.8
2013		412.96		8.9			8.3			8.5
2014		465.51		12.7			10.8			8.6
2015		486.02		4.4			8.6			8.6
Average				8.7	%		8.3	%		8.5	%

(1)	Adjusted for subsequent stock dividends

The chart below summarizes Alleghany’s common stockholders’ equity per share growth and stock price performance over the ten-year period from December 31, 2005 to December 31, 2015, compared with the S&P 500, with all values indexed to December 31, 2005. During this ten-year period, Alleghany’s common stockholders’ equity per share increased at a compound annual rate of 8.6%, compared with a compound annual rate of return of 7.3% for the S&P 500, and the price of Alleghany common stock (adjusted for stock dividends) appreciated at a 6.6% compound annual rate of return.

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During this same ten-year period, we believe that Mr. Hicks’s compensation has been well-aligned with Alleghany’s long-term performance as can be seen in the table below.

10-year Pay-TSR(1) Alignment

($ in thousands)

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																									CAGR
Year	2005		2006		2007		2008		2009		2010		2011		2012		2013			2014		2015			1 Year			3 Year			10 Year
CEO Total Compensation(2)		3,781		4,566		6,522		6,435		6,206		5,636		7,347		7,332		6,216			10,543		6,869			(34.8	%)		(2.1	%)		6.2	%
Pension Value Increase/(Decrease)		850		856		1,160		1,594		1,066		822		1,922		1,259		(1,232	)		2,914		(23	)
CEO SCT Compensation Excluding Pension(3)		2,931		3,710		5,361		4,840		5,140		4,814		5,425		6,072		7,448			7,629		6,892			(9.7	%)		4.3	%		8.9	%
Indexed TSR		100		131		147		105		105		119		113		133		159			184		189			3.1	%		12.5	%		6.6	%
TSR vs. CEO Compensation (excl. pension) Increases / Decreases																										12.8	%		8.2	%		(2.3	%)
Indexed BVPS Growth		100		115		132		126		139		153		161		178		194			219		228			4.4	%		8.6	%		8.6	%
BVPS vs. CEO Compensation (excl. pension) Increases / Decreases																										14.1	%		4.3	%		(0.3	%)

(1)	Total Shareholder Return reflects Alleghany share price appreciation including the impact of stock dividends.

(2)	Includes annual fluctuation in pension value. Calculated according to SEC rules except for 2013 and 2015, which include a negative value for Mr. Hicks’s pension benefit. SEC rules require that negative pension value changes are reflected as a “zero” in the table.

(3)	Represents CEO compensation as reported in the Summary Compensation Table on page 54, excluding annual fluctuation in pension value.

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Compensation Committee Process

Compensation Determination Timetable

General Setting of Salary and Incentive Awards

Salary adjustments for the coming year and new incentive awards are generally made annually by the Compensation Committee at a meeting in January. In 2015, the Compensation Committee determined 2015 salaries and 2015 annual incentive awards at its January 2015 meeting and 2015-2018 long-term incentive awards at a meeting in early February 2015 for all of the Named Executive Officers. These meetings followed the January 2015 Board meeting, at which the Board reviewed and discussed:

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an evaluation of preliminary 2014 financial results for Alleghany;

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an evaluation of Mr. Hicks’s 2014 performance and priorities for 2015;

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a report by Mr. Hicks on management succession and development throughout Alleghany;

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the recommendation of Mr. Hicks regarding the individual performance of each Named Executive Officer; and

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Alleghany’s projections and plan for 2015 through 2017.

Setting of Mr. Hicks’s 2015 Compensation

In determining Mr. Hicks’s 2015 compensation, the Compensation Committee at its January 2015 meeting reviewed Mr. Hicks’s 2014 performance and 2015 priorities, as described above, as well as all components of Mr. Hicks’s 2014 compensation, including annual salary, annual cash incentive compensation in respect of 2014, outstanding performance share awards, values of previous awards of restricted stock and benefits under Alleghany’s Deferred Compensation Plan, Alleghany’s medical, long-term disability and other employee welfare plans and the freezing of Alleghany’s Retirement Plan at year-end 2013.

Payouts of Awards in Respect of 2015 Performance

The Compensation Committee generally determines the payout of awards for prior performance periods at a meeting in late February, upon the completion of the year-end audit of prior year financial statements. With respect to 2015, the Compensation Committee determined payouts to the Named Executive Officers, including Mr. Hicks, of 2015 annual incentive awards and 2012-2015 long-term incentive awards at its February 23, 2016 meeting. Payout determinations were based on Board and Compensation Committee discussions and determinations regarding Alleghany’s financial performance for 2015 and applicable award periods, an evaluation of Mr. Hicks’s 2015 performance, and the recommendation of Mr. Hicks regarding the individual performance of the other Named Executive Officers.

Compensation Committee Advisors and Services

The Compensation Committee has retained Frederic W. Cook & Co., Inc., or “FW Cook,” as a compensation consultant to assist the Compensation Committee in its review of executive and director compensation practices, including the competitiveness of Alleghany executive compensation, executive compensation program design matters, market trends and technical considerations. Prior to its determination to retain FW Cook, the Compensation Committee reviewed and assessed the independence of FW Cook as a firm and the individuals providing advice to the Compensation Committee in compliance with the NYSE’s listing standards. The Compensation Committee determined that FW Cook as a firm and the relevant individual advisers were independent.

The nature and scope of services that FW Cook provides to the Compensation Committee include the following: competitive market compensation analyses; assistance with the redesign of any director or

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management compensation or benefit programs as necessary or requested; assistance with respect to analyzing the impact of regulatory and/or accounting developments on our compensation plans and programs; and preparation for and attendance at selected Compensation Committee meetings. FW Cook is also available to advise the Compensation Committee and management on various executive compensation matters involving our operating subsidiaries. The Chairman of the Compensation Committee reviews and approves all services provided by FW Cook and fees to be paid by Alleghany to FW Cook.

In evaluating our executive compensation program, the Compensation Committee has been advised by FW Cook as to the compensation levels of other companies that might compete with us for executive talent. Competitive market data have been periodically developed by FW Cook from several different sources, including proxy statements. Although we do not seek to set our executive compensation primarily based on any benchmarks or peer group, we believe that information regarding pay practices at other companies is nevertheless useful in two respects. First, we recognize that our compensation practices must be competitive in the marketplace. Second, independent marketplace information is one of the many factors that we consider in assessing the reasonableness of compensation. In this regard, in considering compensation for the NEOs, the Compensation Committee considers comparative market data periodically requested from FW Cook. FW Cook last prepared this analysis in November 2015 and FW Cook’s peer group companies were:


Allied World	Endurance	Reinsurance Group of America
Arch Capital	Erie Indemnity	RenaissanceRe
Axis Capital Holdings	Everest Re Group	Validus
Chubb	Markel Corporation	White Mountains
Cincinnati Financial	Old Republic International	W.R. Berkley
CNA Financial	Progressive	XL Group

This peer group was selected based on publicly traded companies that generally as a group (i) approximate our scope of business and that of our subsidiaries, including revenue and market capitalization, (ii) are similar to us in the importance to their business of capital allocation, investments and risk management, (iii) compete with us for a comparable pool of talent, and (iv) reflect our global presence.

Additionally, our senior officers have all been recruited mid-career, and our compensation must be reasonably competitive with that of their former employers. However, we do not seek to compete for executive talent solely on the basis of compensation. Rather, we also compete by offering a unique professional opportunity to work in a high integrity environment where the focus is on building long-term stockholder value.

Advisory Vote on Executive Compensation

Alleghany holds a stockholder advisory vote on executive compensation, commonly referred to as “say on pay,” every year. The Compensation Committee monitors the results of Alleghany’s “say-on-pay” proposal and related stockholder feedback when evaluating the effectiveness of Alleghany’s compensation policies and disclosures, particularly in the event of a negative vote or significant change in the percentage of favorable votes with regard to such proposal.

Alleghany also actively engages with its significant stockholders to gauge their opinions on a range of topics, including executive compensation. We view this as an important opportunity to develop broader relationships with key investors over the long–term and to engage in open dialogue on compensation and governance related issues.

At our Annual Meeting of Stockholders in April 2015, we received strong support for our executive compensation program, with approximately 97% stockholder approval of our say on pay proposal. When setting compensation for 2016, the Compensation Committee considered both the level of voting support from our stockholders on our say-on-pay vote, as well as stockholder feedback when evaluating our executive compensation plans and determined that no changes to the Alleghany’s executive compensation program were warranted. The Compensation Committee will continue to review the design of the executive compensation program in light of future “say-on-pay” votes, developments in executive compensation, and Alleghany’s pay-for-performance philosophy to ensure that the executive compensation program continues to serve the best interests of Alleghany and its stockholders.

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Elements of 2015 Compensation

The principal elements of compensation paid to our Named Executive Officers in respect of 2015 consisted of:

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salaries;

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annual cash incentive compensation under the 2010 MIP;

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annual grants of long-term equity-based incentives under the 2012 LTIP; and

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an annual savings benefit equal to 15% of base salary.

The percentage that these elements represent of the 2015 compensation for our chief executive officer and our other Named Executive Officers is reflected below.

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Set out below in more detail is a description and analysis of each of these elements of our compensation program.

Salary

We seek to pay salaries that are sufficiently competitive to attract and retain executive talent. The Compensation Committee generally makes salary adjustments annually, in consultation with FW Cook, based on salaries for the prior year, general inflation, individual performance and internal comparability considerations. The following actions were taken with respect to 2015 salaries for our Named Executive Officers:


	2014 Salary		2015 Salary		Rationale

Mr. Hicks		1,000,000		1,000,000	No change due to continued emphasis on performance-linked compensation

Mr. Brandon		800,000		800,000	No change due to continued emphasis on performance-linked compensation

Mr. Dalrymple		600,000		630,000	Recognition of 2014 performance and internal comparability considerations with other Senior Vice Presidents

Mr. Gorham		600,000		600,000	No change due to sufficiently competitive level of pay

Mr. Sennott		600,000		630,000	Recognition of 2014 performance and internal comparability considerations with other Senior Vice Presidents

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Annual Cash Incentive Compensation

We generally pay annual cash incentives to our Named Executive Officers under the Management Incentive Plan then in effect. These annual cash incentive awards are intended to provide a pay-for-performance element for the achievement of shorter-term objectives. Awards granted in 2015 were made under the 2010 MIP. Stockholders approved the 2015 MIP at the 2015 Annual Meeting of Stockholders, which replaced the 2010 MIP. Awards granted in 2016 will be made under the 2015 MIP, which is substantially similar to the 2010 MIP.

In making 2015 awards under the 2010 MIP, the Compensation Committee recognized that, given the nature of Alleghany’s business and long-term approach, how we achieve shorter-term objectives can be a subjective process, but believed this is mitigated by the fact that these 2015 annual cash incentive awards were subject to two meaningful limitations. First, no payout to any Named Executive Officer could exceed the amount of his maximum annual incentive opportunity set at the beginning of 2015, resulting in a $2.5 million maximum award opportunity for Mr. Hicks and an aggregate maximum award opportunity of approximately $5.7 million for our Named Executive Officers as a group. Second, funding of the 2015 Incentive Pool Amount (as defined below) is limited by the level of earnings produced by management in 2015. To the extent the funding of the 2015 Incentive Pool Amount had been less than the aggregate maximum award amount of approximately $5.7 million for our Named Executive Officers as a group, a pro-rata reduction of individual award amounts would have occurred. To the extent that Alleghany had a loss for 2015, no payout would have been made under the 2010 MIP. In sum, payouts under the 2010 MIP for 2015 performance are the lesser of (i) the 2015 Incentive Pool Amount or (ii) the maximum opportunity for management (as may be reduced by the Compensation Committee for individual performance).

Process

The Compensation Committee makes annual incentive awards for the upcoming year in January of that year. 2015 target annual incentive awards and maximum incentive opportunities were as follows:


	2015 Salary		Target Opportunity($/%)		Maximum Opportunity ($)(1)
Mr. Hicks	$	1,000,000	$	1,700,000(170%)	$	2,550,000
Mr. Brandon		800,000		1,080,000(135%)		1,620,000
Mr. Dalrymple		630,000		409,500 (65%)		614,250
Mr. Gorham		600,000		180,000 (30%)		270,000
Mr. Sennott		630,000		409,500 (65%)		614,250

Totals	$	3,660,000	$	3,779,000	$	5,668,500

(1)	The maximum opportunity percentage for each respective Named Executive Officer is 150% of such Named Executive Officer’s target award.

Payout of awards is tied to the achievement of a specified financial performance objective, subject to reduction in respect of Alleghany performance and/or individual performance. The financial performance objective is set in January, after evaluating projected earnings for 2015 and determining each Named Executive Officer’s appropriate target opportunity amount. With respect to individual performance objectives, each of our Named Executive Officers submits individual objectives for the coming year, with Mr. Hicks submitting his to the Board and the other Named Executive Officers submitting their individual objectives to Mr. Hicks. These

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objectives are in addition to the core responsibilities of our Named Executive Officers. Status updates on the achievement of such individual objectives and performance of core responsibilities are given through the year by each Named Executive Officer, culminating in a final report made in advance of payout determinations made by the Board and Compensation Committee at the beginning of the following year. In this regard, Mr. Hicks provides a self-evaluation to the Board of his performance against objectives during the year and Messrs. Brandon, Dalrymple, Gorham and Sennott provided Mr. Hicks with the same, which Mr. Hicks then reviewed with the Compensation Committee.

Financial Performance Objective

The 2015 financial performance goal established by the Compensation Committee for annual incentive awards to our Named Executive Officers was based on a funding approach, which was capped at an amount equal to 3% of 2015 earnings before income taxes, as reported in Alleghany’s audited financial statements, as adjusted, or the “2015 Incentive Pool Amount,” to:

•

exclude effects of accounting changes, charges for goodwill or intangibles impairment (including other than temporary impairment charges);

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exclude expenses incurred in connection with actual and potential acquisitions; and

•

deduct from 2015 earnings a rolling four-year (2011-2014) average of catastrophe losses at RSUI, our principal insurance subsidiary, and TransRe, our principal reinsurance subsidiary, instead of actual 2015 catastrophe losses at RSUI and TransRe.

With respect to catastrophe losses, RSUI’s 2011-2014 catastrophe average was $94.1 million, or the “RSUI CAT Average,” compared with 2015 actual catastrophe losses of $21.1 million, net of prior year development and reinsurance reinstatement premiums, and TransRe’s 2011-2014 catastrophe average was $279.5 million, or the “TransRe CAT Average,” compared with 2015 actual catastrophe losses of $(0.1) million, net of prior year development and reinsurance reinstatement premiums. These differences mean that an additional $352.6 million of catastrophe losses were deducted from Alleghany’s pre-tax earnings in determining the funding for the 2015 Incentive Pool Amount than would have been deducted from Alleghany’s pre-tax earnings using actual 2015 catastrophe losses.

The use of the RSUI CAT Average and TransRe CAT Average rather than the actual amount of their respective 2015 catastrophe losses was based upon the Compensation Committee’s acknowledgement that RSUI and TransRe are significant writers of catastrophe exposed property (re)insurance and that management cannot predict the occurrence or severity of catastrophe losses in any particular year. Using a four-year average recognizes that catastrophe losses are a cost of doing business and accounts for them in a manner consistent with Alleghany’s focus on long-term performance. In this regard, actual catastrophe losses, whether in excess of, or less than, actual catastrophe losses in a particular year, impact funding calculations for annual incentive pools during the four-year averaging period in which they are included. A year in which Alleghany experiences significant catastrophe losses will impact MIP annual incentive pool funding for the subsequent four years, holding management fully accountable for such catastrophe losses.

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Individual Performance Objectives

In January 2015, Mr. Hicks provided the Board, and Messrs. Brandon, Dalrymple, Gorham and Sennott provided Mr. Hicks, with their objectives for 2015 that were in addition to performance of their core responsibilities. These core and 2015 objectives for our Named Executive Officers included the following:


	Core Responsibilities	2015 Objectives
Mr. Hicks	• Building stockholder value over the long-term, reported and measured regularly • Consolidated 2015 financial results • Ultimate responsibility for reinsurance and insurance subsidiary underwriting performance • Ultimate responsibility for equity and fixed income portfolio investment performance • Management development at parent and subsidiaries	• Improve the profitability of CapSpecialty and PacificComp • Work with TransRe on its strategic alternatives in the current reinsurance market cycle • Oversee the continued development of Alleghany Capital, including acquisitions at an attractive price • Assess and revise Roundwood Asset Management public equities investment process and consider alternative strategies • Manage corporate investment portfolio for attractive long-term total returns

Mr. Brandon	• Primary operational oversight of Alleghany’s reinsurance and insurance subsidiaries • Ensure that each insurance subsidiary meets its 2015 business plan • Oversee the operations of TransRe from a parent-level and stockholder perspective as Chairman of TransRe’s Board of Directors • Assist the CEO with the strategic development of Alleghany and its insurance and reinsurance subsidiaries	• Support (re)insurance subsidiaries in achieving their profitability targets and strategic goals • Evaluate strategic developments and issues affecting Alleghany and its (re)insurance operations • Analyze and lead potential (re)insurance acquisition or investment opportunities • Help TransRe to develop profitable business opportunities • Work with PacificComp and CapSpecialty in executing their business plans

Mr. Dalrymple	• Ultimate oversight for management of all legal issues at parent and subsidiaries, including transactional, litigation and regulatory • Oversight of corporate governance and secretarial functions • Ultimate legal oversight of SEC disclosure reports • Ultimate oversight of legal costs at parent and subsidiaries	• Work with investor relations on target governance outreach to Alleghany’s significant stockholders • Work with Board on new Committee processes and pending 2016 Board retirement matters • Manage legal diligence and oversight of TransRe strategic initiatives • Analyze and report on Stranded Oil Resources Corporation existing agreements with Laredo Oil in connection with strategic evaluation

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	Core Responsibilities	2015 Objectives
Mr. Gorham	• Management of $13.8 billion fixed income portfolio • Chairman of TransRe, RSUI and PacificComp Board of Directors investment committees • Treasurer for Alleghany	• Determine optimal investment strategies to reduce alternative minimum taxes and increase utilization of foreign tax credits • Evaluate and invest in a new fixed income asset class • Assist with the evaluation of non-fixed income investment opportunities

Mr. Sennott	• Principal financial officer responsible for the fair and accurate presentation of the financial results • Oversight of Alleghany financial function and maintenance of control environment • Responsible for capital management and annual strategic planning efforts • Responsible for rating agency relationships and management	• Ensure quality, accuracy and content over the financial statements and public filings of Alleghany • Coordinate the communication and relationship management efforts with rating agencies • Oversee Alleghany investor relations function • Oversee Alleghany stock repurchase and debt maturity initiatives • Negotiate a new operating lease for Alleghany headquarters

Payouts under the 2010 MIP with respect to 2015 Performance

Based on our 2015 financial results, the 2015 Incentive Pool Funding Amount was $16.8 million, so that Messrs. Hicks, Brandon, Dalrymple, Gorham and Sennott were eligible to receive maximum payout in February 2016 of their 2015 incentive opportunities, aggregating to $5.7 million, under the 2010 MIP based on achievement of the financial performance goal, subject to reduction for individual performance. At its meeting on February 23, 2016, the Compensation Committee evaluated Alleghany’s overall corporate performance and the individual performance of Mr. Hicks, and Mr. Hicks’s recommendation regarding the individual performance of the other Named Executive Officers.

With respect to Mr. Hicks’s individual performance, the Compensation Committee noted the following factors, among others, during 2015:

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strong underwriting results at TransRe and RSUI , particularly in light of a highly competitive (re)insurance environment;

•

continued improvement in underwriting results at CapSpecialty and PacificComp compared with 2014 underwriting results;

•

continued build-out of Alleghany Capital portfolio companies, including the acquisition of IPS;

•

completed reorganization of equity investment function and execution of change in equity investment strategy;

•

relatively modest growth in common stockholders’ equity per share of 4.4% in 2015; and

•

dampened investment performance in 2015 compared with 2014.

After consideration of these and other factors, the Compensation Committee determined to make a payout to Mr. Hicks of his 2015 annual bonus opportunity at target, or $1.7 million.

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Regarding individual performance, Mr. Hicks’s recommendations reflected the achievement of individual objectives for Messrs. Brandon, Dalrymple, Gorham, and Sennott. For Mr. Brandon, the payout reflected the very profitable 2015 underwriting results at TransRe and RSUI, underwriting result improvements at CapSpecialty and PacificComp, support of TransRe initiatives and accomplishment of strategic initiatives at our (re)insurance subsidiaries. For Mr. Dalrymple, the payout reflected superior performance of his core responsibilities and achievement of his 2015 objectives, particularly with respect to corporate governance initiatives and oversight. For Mr. Sennott, the payout reflected superior performance of his core responsibilities as well as achievement of his 2015 objectives, including ensuring quality, accuracy and content of Alleghany’s financial reporting, overseeing Alleghany’s investor relations and stock repurchase and debt maturity initiatives and negotiating a new operating lease for Alleghany’s headquarters. For Mr. Gorham, the payout reflected superior performance of his core responsibilities as well as achievement of his 2015 objectives, including determining optimal investment strategies to reduce alternative maximum taxes and increase use of foreign tax credits, evaluating and investing in a new fixed income asset class and assisting in the evaluation of non-fixed income investment opportunities.

Following the evaluations by Mr. Hicks of the other Named Executive Officers, the Compensation Committee authorized payouts of 2015 annual bonus opportunities at maximum to Messrs. Brandon, Dalrymple, Gorham and Sennott under the 2010 MIP for an aggregate payout to them in the amount of approximately $3.1 million.

Long-Term Equity-Based Incentive Compensation

In 2015, we made awards of long-term incentive compensation to our Named Executive Officers under the 2012 LTIP. Historically, long-term incentive awards have been made primarily in the form of performance shares and, in certain cases, shares of restricted stock and restricted stock units. Awards of performance shares under the 2012 LTIP are intended to provide a pay-for-performance component of compensation based upon the achievement of longer-term financial objectives focused on growth in book value per share. Awards of restricted stock or restricted stock units under the 2012 LTIP are intended to provide a retention component of compensation, the value of which is tied to the market price of our common stock.

Performance Shares

For the 2015-2018 award period, the Compensation Committee based the number of performance shares awarded to each Named Executive Officer upon a percentage of such officer’s 2015 salary divided by the average closing prices of common stock for the 30-day period prior to the mailing of material for the meeting of the Compensation Committee at which such awards were made. Such percentages of 2015 salary were as follows:


	2015 Salary		Opportunity %		Opportunity $
Mr. Hicks	$	1,000,000		400	$	4,000,000
Mr. Brandon		800,000		300		2,400,000
Mr. Dalrymple		630,000		100		630,000
Mr. Gorham		600,000		45		270,000
Mr. Sennott		630,000		100		630,000

Total 2015 Performance Share Opportunities					$	7,930,000

The differing target awards as a percentage of salary reflect the Compensation Committee’s determinations of appropriate levels and mix of compensation components, taking into account varying levels of responsibility within Alleghany, internal comparability and the implicit impact of the various Named Executive Officers on the accomplishment of our financial, strategic and operational objectives, and competitive considerations. With respect to Mr. Hicks in particular, his 2015 performance share award reflected the Compensation Committee’s determination to tie Mr. Hicks’s compensation closely to Alleghany’s financial performance and its views of the

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challenge of meeting the financial performance goals for the 2015-2018 award period in light of the current interest rate environment and (re)insurance market environment. For 2016 performance share awards, the opportunities for each of our Named Executive Officers, expressed as a percentage of salary, were the same as those set forth above for 2015.

In making performance share awards for the 2015-2018 period, the Compensation Committee took account of:

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Alleghany’s financial objective in the current economic environment of growing book value per share at rates of 7-10% over the long term without employing excessive amounts of financial leverage and without taking imprudent risks;

•

prevailing financial and economic conditions and uncertainties;

•

the alignment of performance goals with Alleghany’s near-term strategy, with a particular emphasis on maintaining Alleghany’s financial strength; and

•

the prevailing 10-year U.S. Treasury rates and prevailing equity risk premiums adjusted for Alleghany’s estimated stock volatility relative to the market.

Taking into account such conditions, Alleghany’s strategy the Compensation Committee set the following performance goals for the 2015-2018 period:

•

maximum payouts at 150% of the value of one share of common stock on the payout date for average annual compound growth in our Book Value Per Share (as defined by the Compensation Committee pursuant to the 2012 LTIP) of 9% or more over the four-year award period ending December 31, 2018, as adjusted for stock dividends;

•

target payouts at 100% of the value of one share of common stock on the payout date if such growth equals 7%, and payouts at 50% of the value of one share of common stock on the payout date if such growth equals 5%, with payouts for growth between the foregoing levels to be determined by straight line interpolation; and

•

no payouts if such growth is less than 5%.

The Compensation Committee believed that the above payout thresholds would be challenging to meet, particularly in light of slow U.S. and global economic growth, a prolonged period of very low interest rates, relatively high current valuations in equity markets and the imperative to maintain underwriting discipline in increasingly competitive reinsurance and insurance markets due to an abundance of both traditional and new alternative underwriting capacity.

Restricted Stock Units

In 2015, long-term incentive opportunities for Mr. Dalrymple and Mr. Sennott included 697 restricted stock units, representing awards set at 50% of their respective base salaries, which cliff-vest four years from date of grant. These grants of restricted stock units are intended to further align Mr. Dalrymple’s and Mr. Sennott’s interests with those of our stockholders, while incenting the prudence desired in their roles as General Counsel and chief financial officer in preserving stockholder value.

Perquisites

Our general practice is to not provide perquisites or other personal benefits to our Named Executive Officers. In 2015, no Named Executive Officer received more than $10,000 in perquisites or other personal benefits.

Deferred Compensation Plan

We credit an amount equal to 15% of a Named Executive Officer’s base salary to the Deferred Compensation Plan each year. Entitlement to this savings benefit is not based on performance. As it is our intention that a significant portion of compensation for our Named Executive Officers be contingent on

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performance objectives, the savings benefit offered by the Deferred Compensation Plan provides a stable component of total compensation. In addition, the Deferred Compensation Plan permits our Named Executive Officers to elect to defer the receipt, and thus the taxation, of all or part of their base salary and their annual cash bonus. A participant may choose to have savings benefit credit amounts and deferred salary and bonus amounts either credited with interest, treated as though invested in our common stock or increased or decreased by an amount proportionate to the growth or decline in our stockholders’ equity per share.

Retirement Plan

Retirement benefits for our Named Executive Officers are provided under the Retirement Plan. Under the Retirement Plan, a participant must have completed five years of service with Alleghany or a subsidiary of Alleghany before he or she is vested in, and thus has a right to receive, any retirement benefits following his or her termination of employment. Effective December 31, 2013, the Retirement Plan was closed to new participants and no additional benefits for existing participants accrue after such date. Any participant who was not vested in his or her accrued benefit as of December 31, 2013 will continue to have future service with Alleghany credited toward the Retirement Plan’s five-year vesting requirement.

Financial Statement Restatements

It is our Board’s policy that the Compensation Committee will, to the extent permitted by governing law, have the sole and absolute authority to make retroactive adjustments to any cash or equity-based incentive compensation awarded or paid to any of our officers where the award or payment was predicated upon the achievement of performance goals that were subsequently restated or otherwise adjusted in a manner that would reduce the size of any such award or payment. In this regard, the Compensation Committee is authorized to have Alleghany seek to recover any amount the Compensation Committee determines was inappropriately received by any officer.

Hedging and Pledging Policies

We maintain a policy on insider trading and compliance that prohibits our officers from directly or indirectly purchasing or using financial instruments that are designed to hedge or offset any decrease in the market value of Alleghany securities they own. In addition, under such policy, officers are prohibited from pledging Alleghany securities as collateral.

Executive Officer Stock Ownership Guidelines

We expect our executive officers to achieve ownership of our common stock having an aggregate value (based upon the higher of market value or book value) equal to a multiple of base salary, as follows: for our President and chief executive officer, the multiple is five times base salary; for our Executive Vice President, the multiple is four times base salary; for our Senior Vice Presidents, the multiple is three times base salary; and for our Vice Presidents, the multiple is one times base salary. We expect our executive officers to retain 75% of the shares of common stock (net of taxes) awarded under our long-term incentive plans until they achieve their applicable ownership levels, and they are expected to maintain such levels thereafter.

Tax Considerations

We are not allowed a deduction under Section 162(m) of the Code for any compensation paid to a “covered employee” in excess of $1.0 million per year, subject to certain exceptions. In general, “covered employees” include our President and chief executive officer and our three other most highly compensated executive officers (not including our chief financial officer) who are in our employ and are officers at the end of the tax year. Among other exceptions, the deduction limit does not apply to compensation that meets the specified requirements under Section 162(m) of the Code for “performance-based compensation.” In general, those

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requirements include the establishment of objective performance goals for the payment of such compensation by a committee of the board of directors composed solely of two or more outside directors, stockholder approval of the material terms of such compensation prior to payment, and certification by the committee that the performance goals have been achieved prior to the payment of such compensation. Such requirements permit the committee administering the plan to make discretionary adjustments to performance goals that would reduce payouts but do not permit discretionary adjustments to performance goals that would increase payouts.

The Compensation Committee believes that establishing appropriate compensation arrangements to retain and incent our executive officers best serves our interests and the interests of our stockholders. In order to maintain flexibility to compensate our executive officers in a manner designed to promote long-term corporate goals and objectives, the Compensation Committee has not adopted a policy that all executive compensation must be deductible. However, the Compensation Committee also believes that, when appropriate, consideration should be given to seeking to maximize the deductibility of the compensation paid to our executive officers.

The 2010 MIP permits the Compensation Committee to grant awards that are intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, or “qualifying awards,” and awards that are not intended to qualify as “performance-based” compensation, or “non-qualifying awards.” Consistent with the 2010 MIP and the Compensation Committee’s consideration and balancing of its executive compensation objectives, the amounts identified under the Stock Awards and Non-Equity Incentive Plan columns of the Summary Compensation Table on page 54 paid to Messrs. Hicks, Brandon, Dalrymple and Gorham for 2015 and 2014 and to Messrs. Hicks, Brandon and Dalrymple for 2013 are intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, except for the restricted stock units awarded to Mr. Dalrymple in 2015 and 2014. The cash bonus paid to Mr. Sennott for 2013 identified under the Bonus Column of the Summary Compensation Table does not qualify as “performance-based compensation” for purposes of Section 162(m). Mr. Sennott’s compensation reflected in the Summary Compensation Table for 2015 and 2014 does not have to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code because a person serving as our chief financial officer at the end of a given year is not a “covered” employee for purposes of Section 162(m) of the Code for such year.

Compensation Policies and Practices Relating to Risk Management

Risk analysis has always been part of our design and review of our group-wide executive incentive plans, and the Compensation Committee regularly monitors compensation policies, practices and outstanding awards to determine whether our risk management and incentive objectives are being met with respect to group-wide employee incentives. Our material risks include investment risk (debt and equity), as well as catastrophe losses and material mispricing of risk at our insurance and reinsurance subsidiaries. The Board’s and management’s risk oversight is discussed on page 16. The Compensation Committee does not believe that risks arising from our group-wide compensation policies and practices for our employees are reasonably likely to have a material adverse effect on Alleghany. In this regard, as discussed on pages 37 and 38, our short and long-term incentive plans are capped at individual levels so as not to incent imprudent risk taking to achieve outsized payouts. In addition, our officers are required to own a substantial amount of common stock to ensure that they maintain a significant stake in our long-term success, and we have in place a compensation clawback policy applicable to our officers to further discourage imprudent risk taking. Further, we do not grant stock options to officers as we do not wish to reward or punish them for exogenous short-term market price movements. The management teams of our insurance and reinsurance subsidiaries are incented to write profitable business and have no incentives to grow premium volume by underpricing risk. The Compensation Committee seeks to set realistic incentive goals, monitors them in light of economic conditions and our strategy and risk appetite, and will consider appropriate adjustments in respect thereof in the event of any conflict between incentives and the Board’s strategy and risk appetite.

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EXECUTIVE COMPENSATION

The information under this heading relates to the compensation of our Named Executive Officers during 2015, 2014 and 2013.

Summary Compensation Table


Name and Principal Position	Year		Salary			Bonus(1)		Stock Awards(2)		Non-Equity Incentive Plan Compensation(3)		Change in Pension Value and Nonqualified Deferred Compensation Earnings(4)		All Other Compensation(5)		Total
Weston M. Hicks		2015	$	1,000,000			—	$	4,026,509	$	1,700,000		—	$	166,176	$	6,892,685
President and chief executive officer		2014		1,000,000			—		3,959,904		2,500,000	$	2,914,467		168,675		10,543,046
President and chief executive officer		2013		1,250,000			—		3,983,966		2,000,000		—		213,759		7,447,725

Joseph P. Brandon		2015		800,000			—		2,415,815		1,620,000		—		132,716		4,968,531
Executive Vice President		2014		800,000			—		2,376,099		1,600,000		254,392		135,071		5,165,562
Executive Vice President		2013		1,000,000			—		2,124,755		1,200,000		337,805		167,907		4,830,467

Christopher K. Dalrymple		2015		630,000			—		951,133		614,250		—		103,890		2,299,273
Senior Vice President, General Counsel, and Secretary		2014		600,000			—		890,402		600,000		702,363		100,232		2,892,997
Senior Vice President, General Counsel, and Secretary		2013		550,000			—		876,778		550,000		29,707		92,347		2,098,832

Roger B. Gorham		2015		600,000			—		271,557		270,000		256,464		100,572		1,498,593
Senior Vice President- Head of Fixed Income and Treasurer		2014		600,000			—		237,258		240,000		373,171		101,692		1,552,121
		2013		600,000			—		233,642		220,000		—		101,542		1,155,184
							—

John L. Sennott, Jr.		2015		630,000			—		951,133		614,250		—		104,422		2,299,805
Senior Vice President and chief financial officer		2014		600,000			—		890,402		600,000		—		100,691		2,191,093
Senior Vice President and chief financial officer		2013		389,583	(6)	$	180,000		1,357,448		550,000		—		65,971		2,543,002

(1)	Reflects a cash bonus paid to Mr. Sennott upon commencement of his employment with Alleghany.

(2)

Represents the grant date fair value of performance shares granted to the Named Executive Officers listed below under the 2012 LTIP, computed in accordance with ASC 718. For information on the valuation assumptions used in these computations, see Note 14 to our consolidated financial statements included in the Form 10-K. The grant date fair value of such performance shares, assuming payouts at maximum, is as follows:


Name	2015		2014		2013
Mr. Hicks	$	6,039,764	$	5,939,856	$	5,975,949
Mr. Brandon		3,623,722		3,564,148		3,187,137
Mr. Dalrymple		951,133		890,597		876,423
Mr. Gorham		407,336		355,887		350,463
Mr. Sennott		951,133		890,597		2,036,173

For Mr. Dalrymple, the amounts in this column also include the grant date fair value of restricted stock units awarded to him under the 2012 LTIP as follows:


Year	Restricted Stock Units(#)		Grant Date Fair Value($)
2015		697	$	317,044
2014		759		296,670
2013		825		292,496

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For Mr. Sennott, the amounts in this column also include the grant date fair value of restricted stock units and performance shares awarded to him under the 2012 LTIP as follows:


Year	Restricted Stock Units(#)		Performance Shares(#)		Grant Date Fair Value($)
2015		697		—	$	317,044
2014		759		—		296,670
2013				3,540		2,036,173

(3)	Represents cash incentive earned pursuant to awards under the 2010 MIP.

(4)

Reflects change in actuarial present value of pension benefits during 2015, 2014 and 2013. For Mr. Sennott, reflects that he is not a participant in the Retirement Plan. The actual change in pension value was negative for Messrs. Hicks, Brandon and Dalrymple in 2015, and for Mr. Hicks and Mr. Gorham in 2013. However, SEC regulations do not allow for inclusion of negative pension amounts in the Summary Compensation Table. Change in actuarial present value of pension benefits is subject to many external variables, such as interest rates, that are not related to Alleghany performance. Therefore, we do not believe a year-over-year change in actuarial pension value is helpful in evaluating compensation for comparative purposes, and believe that stockholders may find the detailed explanation of changes in actuarial pension value for Messrs. Hicks, Brandon, Dalrymple and Gorham under “Change in Pension Value” on pages 58 and 59 and the discussion of accumulated pension benefits under “Pension Benefits” on pages 65 through 67 to be useful for an understanding of the pension benefits provided to the Named Executive Officers.

(5)	All Other Compensation amounts reflect the following items:


Name	Year		Life Insurance and Long-Term Disability(a)		Tax Reimbursement(b)		Savings Benefit(c)		Total
Weston M. Hicks		2015	$	8,035	$	8,141	$	150,000	$	166,176
		2014		8,500		8,612		151,563		168,675
		2013		14,320		11,939		187,500		213,759

Joseph P. Brandon		2015		6,643		6,073		120,000		132,716
		2014		7,220		6,601		121,250		135,071
		2013		10,260		7,647		150,000		167,907

Christopher K. Dalrymple		2015		5,003		4,574		94,313		103,890
		2014		5,508		5,036		89,688		100,232
		2013		6,000		4,472		81,875		92,347

Roger B. Gorham		2015		5,523		5,049		90,000		100,572
		2014		6,108		5,584		90,000		101,692
		2013		6,792		5,062		89,688		101,542

John L. Sennott, Jr		2015		5,281		4,828		94,313		104,422
		2014		5,748		5,255		89,688		100,691
		2013		6,286		4,685		55,000		65,971

(a)

Amounts represent the dollar value of the insurance premiums paid by Alleghany for the benefit of such individuals for life insurance and long-term disability insurance maintained by Alleghany on their behalf in each of the years presented. These life insurance policies provide a death benefit to each such officer if he is an employee at the time of his death equal to four times the amount of his annual salary at January 1 of the year of his death. These long-term disability insurance policies provide disability insurance coverage to each such officer in the event he becomes disabled (as defined in such policies) during his employment with Alleghany.

(b)

Amounts represent the reimbursement of taxes, and the reimbursement itself, on income imputed to such individuals pursuant to Alleghany’s life insurance and long-term disability policies as described above in each of the years presented.

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(c)

Reflects savings benefit amounts credited by Alleghany pursuant to the Deferred Compensation Plan in each of the years presented. The method for calculating earnings on the savings benefit amounts under the Deferred Compensation Plan is set out on pages 63 and 64 in the narrative accompanying the Nonqualified Deferred Compensation table.

(6)	Represents pro rata portion of 2013 annual base salary of $550,000, reflecting Mr. Sennott’s commencement of employment with Alleghany in April 2013.

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Grants of Plan-Based Awards in 2015


Name	Grant Date		Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)				Estimated Future Payouts Under Equity Incentive Plan Awards(2)						All Other Stock Awards: Number of Share of Stock or Units(#)(3)		Grant Date Fair Value of Stock Awards(4)
Name	Grant Date		Target($)		Maximum($)		Threshold (#)		Target (#)		Maximum (#)				Grant Date Fair Value of Stock Awards(4)
Weston M. Hicks		1/20/15		1,700,000		2,550,000
		2/03/15						4,426		8,852		13,278		—	$	4,026,509
Joseph P. Brandon		1/20/15		1,080,000		1,620,000								—
		2/03/15						2,655		5,311		7,967		—		2,415,815
Christopher K. Dalrymple		1/20/15		409,500		614,250
		2/03/15						697		1,394		2,091		—		634,089
		2/03/15						—		—		—		697		317,044
Roger B. Gorham		1/20/15		180,000		270,000
		2/03/15						298		597		896		—		271,557
John L. Sennott, Jr.		1/20/15		409,500		614,250
		2/03/15						697		1,394		2,091		—		634,089
		2/03/15						—		—		—		697		317,044

(1)

Reflects awards under the 2010 MIP. For Messrs. Brandon, Hicks, Dalrymple, Gorham and Sennott, target and maximum amounts reflect the range of awards that each such Named Executive Officer could have earned based upon Alleghany achieving a specified financial performance objective, subject to reduction in respect of Alleghany performance and/or individual performance. These amounts are subject to decrease (but not increase) at the discretion of the Compensation Committee based upon its evaluation of Alleghany’s overall financial and operational performance and their individual performance.

(2)

Reflects the gross number of shares of common stock payable in connection with awards of performance shares for the 2015-2018 award period granted under the 2012 LTIP. Threshold amounts reflect estimated future payout of performance shares if average annual compound growth in Book Value Per Share (as defined by the Compensation Committee pursuant to the 2012 LTIP) equals 5% in the award period; target amounts reflect estimated future payout of performance shares if average annual compound growth in Book Value Per Share equals 7% in the award period; and maximum amounts reflect estimated future payout of performance shares if average annual compound growth in Book Value Per Share equals or exceeds 9% in the award period. If average annual compound growth in Book Value Per Share is less than 5%, none of these performance shares would be payable.

(3)	Reflects the awards to each of Mr. Dalrymple and Mr. Sennott under the 2012 LTIP of restricted stock units that cliff vest on the four-year anniversary of the grant date.

(4)

Reflects the 2015 value of performance share awards for the 2015-2018 award period under the 2012 LTIP for the Named Executive Officer, computed in accordance with ASC 718, assuming payouts at target and shares of restricted common stock or restricted stock units awarded to each of Mr. Dalrymple and Mr. Sennott.

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Narrative Discussion Relating to the Summary Compensation Table and

Grants of Plan-Based Awards Table

Change in Pension Value

Effective December 31, 2013, Alleghany’s Retirement Plan was closed to new participants and was “frozen” for existing participants so that no additional benefits would accrue after such date. Despite the freezing of the Retirement Plan, the Summary Compensation Table on page 54 may still show an increase or decrease in the value of our Named Executive Officers’ pension benefits. These changes in value are primarily driven by external variables, such as the discount rate, the mortality tables used and the passage of time. Set out below is a table showing the components of the change in pension value for years 2013-2015 for our Named Executive Officers who are participants in the Retirement Plan.


Name	Year		(Increase) Decrease in Discount Rate(1)			Change in Mortality Table(2)		Passage of Time/Age Increase(3)		Value of Benefits Accrued During the Year(4)		Total Change in Pension Value and Nonqualified Deferred Compensation Earnings(5)
Weston M. Hicks		2015	$	(478,042	)		—	$	454,163		—	$	(23,879	)
		2014		1,629,691		$	862,795		421,981		—		2,914,467
		2013		(1,618,668	)		—		386,857		—		(1,231,811	)

Joseph P. Brandon		2015		(43,777	)		—		37,233		—		(6,544	)
		2014		146,869			73,701		33,822		—		254,392
		2013		(146,523	)		—		13,545	$	470,783		337,805

Christopher K. Dalrymple		2015		(140,953	)		—		81,866		—		(59,087	)
		2014		445,079			190,070		67,214		—		702,363
		2013		(438,285	)		—		52,583		415,409		29,707

Roger B. Gorham		2015		(69,311	)		231,910		93,865		—		256,464
		2014		274,499			—		98,672		—		373,171
		2013		(282,916	)		—		86,783		—		(196,133	)

(1)	For 2015, the discount rate used was 4.25%; for 2014, the discount rate used was 4%; and for 2013 the discount rate used was 5%.

(2)

For the Retirement Plan year ending in 2013, Alleghany elected to use a mortality assumption based on tables prescribed by the Internal Revenue Service for funding purposes. For the Retirement Plan year ending in 2014, Alleghany elected to change the mortality assumption to the RP 2014 base table with Scale MP -2014, which reflect updated mortality tables issued by the Society of Actuaries in October 2014. For the Retirement Plan year ending in 2015, Alleghany amended the Plan to adjust this mortality basis used to compute the present values for lump sums to the RP-2014 Annuitant male/female (50/50) blended basis mortality table using Scale MP-2014 with generational projection.

(3)	Represents the change attributable to passage of time and increase in participant’s age.

(4)

Amounts for each of Mr. Brandon and Mr. Dalrymple reflect additional accruals as their projected full service benefit in the applicable Retirement Plan year was greater than the retirement benefit accrued by him at December 13, 2010 when the Compensation Committee amended the Retirement Plan by eliminating the inclusion of annual cash bonuses earned for years subsequent to 2010 in the computation of benefits. For additional detail in this regard, see pages 65 through 67.

(5)

Calculated in accordance with SEC rules governing preparation of the Summary Compensation Table on page 54 except for Mr. Hicks and Mr. Gorham in 2013 and Mr. Hicks, Mr. Brandon and Mr. Dalrymple in 2015, as SEC rules do not allow for inclusion of negative pension amounts in the Summary Compensation Table.

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In order to show the effect that the year-over-year change in pension value had on total compensation, as reported in the Summary Compensation Table on page 54, and as determined under applicable SEC rules, the table below presents SEC total compensation and then SEC total compensation without pension value changes for the Named Executive Officers who are participants in the Retirement Plan. The amounts reported in the SEC total without pension value changes are calculated by subtracting the change in pension value reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings columns (but including the nonqualified deferred compensation earnings reported in that column, if any) from the amounts reported in the SEC Total column. The amounts reported in this column may differ substantially from, and are not a substitute for, the amounts reported in the SEC Total column in the Summary Compensation Table on page 54.


Name	Year		SEC Total Compensation		SEC Total Compensation without Change in Pension Value
Mr. Hicks		2015	$	6,892,685	$	6,892,685
		2014		10,543,046		7,628,579
		2013		7,447,725		7,447,225

Mr. Brandon		2015		4,968,531		4,968,531
		2014		5,165,562		4,911,170
		2013		4,830,467		4,492,662

Mr. Dalrymple		2015		2,299,273		2,299,273
		2014		2,892,997		2,190,634
		2013		2,098,832		2,069,125

Mr. Gorham		2015		1,498,593		1,242,129
		2014		1,551,121		1,177,950
		2013		1,155,184		1,155,184

Employment Agreement with Weston M. Hicks

On October 7, 2002, Alleghany and Mr. Hicks entered into an employment agreement pursuant to which Mr. Hicks agreed to serve as Executive Vice President of Alleghany. Pursuant to the terms of this employment agreement, Mr. Hicks’s salary is to be reviewed annually. In addition, if Mr. Hicks’s employment is terminated by Alleghany other than for “Cause” or other than in the case of his “Total Disability,” Alleghany will continue to pay his base salary in accordance with Alleghany’s regular payroll practices after such termination until such payments aggregate $1,000,000 on a gross basis. “Cause” is defined as conviction of a felony; willful failure to implement reasonable directives of the Chairman or the Board after written notice, which failure is not corrected within ten days following notice thereof; or gross misconduct in connection with the performance of any of Mr. Hicks’s duties. “Total Disability” is defined as Mr. Hicks’s inability to discharge his duties due to physical or mental illness or accident for one or more periods totaling six months during any consecutive twelve-month period. The employment agreement was the result of an arm’s-length negotiation between the Executive Committee of the Board and Mr. Hicks and was approved by the Compensation Committee and the Board. The Executive Committee determined that such provisions were appropriate and helpful in recruiting Mr. Hicks, and the Compensation Committee and the Board approved such determination.

Employment Agreement with Joseph P. Brandon

On November 20, 2011, Alleghany and Mr. Brandon entered into an employment agreement which became effective on March 6, 2012 upon the closing of the TransRe acquisition, under which Mr. Brandon agreed to serve as Executive Vice President of Alleghany. Pursuant to the terms of this employment agreement:

•

Mr. Brandon’s salary is to be reviewed annually for increases but shall not be decreased.

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•

If Mr. Brandon’s employment is terminated by Alleghany other than for “Cause” or other than in the case of his “Total Disability,” Alleghany will continue to pay his base salary in accordance with Alleghany’s regular payroll practices after such termination until such payments aggregate $1,000,000 on a gross basis. “Cause” is defined as conviction of a felony; willful failure to implement reasonable directives of Alleghany’s chief executive officer after written notice, which failure is not corrected within ten days following notice thereof; or willful gross misconduct in connection with the performance of any of Mr. Brandon’s duties. “Total Disability” is defined as Mr. Brandon’s inability to discharge his duties due to physical or mental illness or accident for one or more periods totaling six months during any consecutive twelve-month period.

•

Mr. Brandon and Alleghany entered into a restricted stock unit matching grant agreement dated as of March 6, 2012, whereby Mr. Brandon was to receive a restricted stock unit matching grant under the 2007 LTIP of one restricted stock unit for every share of common stock Mr. Brandon purchased or received pursuant to stock dividends on those purchased shares, or “JPB Owned Shares,” on or before September 3, 2012 up to a maximum of $5.0 million worth of common stock. Material terms of this matching grant agreement, or the “JPB Matching Grant Agreement,” are discussed below.

•

Mr. Brandon and Alleghany entered into a success shares award agreement dated as of March 6, 2012, pursuant to which Mr. Brandon received an award (i) under the 2007 LTIP of 11,137 fully vested and non-forfeitable shares of common stock and (ii) a lump sum cash payment in the amount of $3.5 million. The transfer restrictions applicable to these shares lapsed on March 6, 2015.

The employment agreement was the result of an arm’s-length negotiation between the Board and Mr. Brandon and was approved by the Compensation Committee and the Board. The Board determined that such provisions were appropriate and helpful in recruiting Mr. Brandon and completing the TransRe acquisition.

2012 Restricted Stock Unit Matching Grant Award to Mr. Brandon

Between March 6, 2012 and September 3, 2012, Mr. Brandon purchased 9,023 shares of common stock and, pursuant to the JPB Matching Grant Agreement, Alleghany credited him with 9,023 restricted stock units. These restricted stock units are notional units of measurement denominated in shares of common stock and entitle Mr. Brandon to payment on account of such restricted stock units in an amount equal to the Fair Market Value, as defined in the JPB Matching Grant Agreement, on the payment date of a number of shares of common stock equal to the number of restricted stock units to which Mr. Brandon is entitled to payment.

Pursuant to the terms of the JPB Matching Grant Agreement, the restricted stock units vest over a seven-year period, with 15% of the restricted stock units vesting on each of the first six anniversaries of the date of grant and 10% of the restricted stock units vesting on the seventh anniversary of the date of grant. The restricted stock units are to be paid in cash and/or shares of common stock, as the Compensation Committee may determine within ten business days of the applicable vesting date. If Mr. Brandon is terminated without Cause or by reason of his death or Total Disability (as such terms are defined in the JPB Matching Grant Agreement), the restricted stock units scheduled to vest during such year shall vest on a pro rata basis for the amount of time Mr. Brandon was employed during such year. If Mr. Brandon voluntarily terminates his employment or Alleghany terminates his employment for Cause, all unvested restricted units shall be forfeited. Mr. Brandon has no voting or other rights in respect of the restricted stock units.

Mr. Brandon must maintain unencumbered beneficial ownership of the JPB Owned Shares continuously throughout the period commencing with the initial purchase of JPB Owned Shares and ending on the earliest to occur of (i) March 6, 2019, (ii) Mr. Brandon’s termination of employment for any reason or (iii) a merger approved by the Board effectuated by a tender offer or other major corporate transaction approved by the Board with respect to Alleghany’s common stock. To the extent Mr. Brandon fails to do so, he will forfeit one restricted stock unit for each JPB Owned Share with respect to which he has not maintained unencumbered beneficial ownership for the required period of time.

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Letter Agreement with Mr. Gorham

Effective February 21, 2013, Mr. Gorham and Alleghany entered into a letter agreement which provides for continued payments to Mr. Gorham of his base salary until such payments aggregate to $1.2 million on a gross basis, payable in accordance with Alleghany’s normal payroll and procedures, following termination of his employment other than for Cause or in the event of his death or Total Disability. “Cause” is defined as conviction of a felony, willful failure to implement reasonable directives of Alleghany’s chief executive officer after written notice, which failure is not corrected within ten days following notice thereof, or willful gross misconduct in connection with the performance of any of Mr. Gorham’s duties. “Total Disability” is defined as Mr. Gorham’s inability to discharge his duties due to physical or mental illness or accident for one or more periods totaling six months during any consecutive twelve-month period.

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Outstanding Equity Awards at 2015 Fiscal Year-End


	Stock Awards
Name	Number of Shares or Units of Stock That Have Not Vested(#)			Market Value of Shares or Units of Stock That Have Not Vested($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(#)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested($)
Weston M. Hicks		—			—		13,206	(1)	$	6,356,180
		—			—		16,856	(2)		8,112,721
		—			—		15,197,	(3)		7,314,227
		—			—		13,278	(4)		6,390,834

Joseph P. Brandon		4,962	(5)	$	2,388,573		7,442	(1)		3,581,668
		—			—		8,990	(2)		4,326,736
		—			—		9,119	(3)		4,388,825
		—			—		7,967	(4)		3,834,356

Christopher K. Dalrymple		—			—		2,853	(1)		1,373,177
		825	(6)		397,081		2,472	(2)		1,189,798
		759	(6)		365,314		2,279	(3)		1,096,665
		697	(6)		335,473		2,091	(4)		1,006,419

Roger B. Gorham		—			—		3,488	(1)		1,678,569
		—			—		989	(2)		475,775
		—			—		911	(3)		438,233
		—			—		896	(4)		431,013

John L. Sennott, Jr.		—			—		1,593	(1)		766,727
		—			—		2,124	(2)		1,022,302
		759	(6)		365,314		2,279	(3)		1,096,665
		697	(6)		335,473		2,091	(4)		1,006,419

(1)	Performance shares granted under the 2007 LTIP (the 2012 LTIP for Mr. Sennott), calculated at maximum payout, which vest after completion of the award period ending December 31, 2015.

(2)	Performance shares granted under the 2012 LTIP, calculated at maximum payout, which vest after completion of the award period ending December 31, 2016.

(3)	Performance shares granted under the 2012 LTIP, calculated at maximum payout, which vest after completion of the award period ending December 31, 2017.

(4)	Performance Shares granted under the 2012 LTIP, calculated at maximum payout, which vest after completion of the award period ending December 31, 2018.

(5)	Restricted stock units granted under the 2007 LTIP which vest over a seven year period, with 15% vesting on each of the first six anniversaries of date of grant and 10% vesting on the seventh anniversary of the date of grant. The terms of this award are described in more detail on page 60.

(6)	Restricted stock unit awards granted under the 2012 LTIP which cliff vest on the fourth anniversary of the date of grant.

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2015 Stock Vested


	Stock Awards(1)
Name	Number of Shares Acquired on Vesting		Dollar Value Realized on Vesting
Weston M. Hicks		9,996	$	4,805,827
Joseph P. Brandon(2)		6,935		3,312,614
Christopher K. Dalrymple		1,140		548,084
Roger B. Gorham		3,299		1,586,077
John L. Sennott, Jr.		1,062		510,583

(1)

For each of Mr. Hicks, Brandon, Dalrymple, Gorham and Sennott, includes the gross amount of performance shares which vested upon certification of performance by the Compensation Committee on February 24, 2015 with respect to the award period ending December 31, 2014. Payouts of such performance shares were made at 150% of target. The gross number of performance shares vested, and the form of payment, were as follows: Mr. Hicks, 9,996 shares with a dollar value of $4,805,827 (paid in cash); Mr. Brandon, 5,582 shares with a dollar value of $2,683,686 (paid in the form of 1,349 shares of common stock and $2,035,121 in cash); Mr. Dalrymple, 1,140 shares with a dollar value of $548,084 (paid in the form of 505 shares of common stock and $305,292 in cash); Mr. Gorham, 3,299 shares with a dollar value of $1,586,077 (paid in cash); and Mr. Sennott, 1,062 shares with a dollar value of $510,583 (paid in the form of 635 shares of common stock and $205,291 in cash).

(2)

Includes 1,353 restricted stock units which vested on September 2, 2015 pursuant to the JPB Matching Grant Agreement. The dollar value of such restricted stock units was $628,928 (paid in the form of 654 shares of common stock and $303,904 in cash). The terms of this award are described in more detail on page 60.

Nonqualified Deferred Compensation


Name	Executive Contributions in Last Fiscal Year		Registrant Contributions in Last Fiscal Year(1)		Aggregate Earnings in Last Fiscal Year (2)		Aggregate Withdrawals/ Distributions			Aggregate Balance at Last Fiscal Year-End
Weston M. Hicks		—	$	150,000	$	106,940	$	(3,525	)	$	2,780,352
Joseph P. Brandon		—		120,000		14,372		(2,819	)		528,321
Christopher K. Dalrymple		—		94,313		30,198		(2,217	)		896,487
Roger B. Gorham		115,000		90,000		33,940		(4,818	)		1,227,474
John L. Sennott, Jr.		—		94,313		5,280		(2,216	)		254,527

(1)	Such amounts are included as a component of “All Other Compensation” for 2015 set forth in the Summary Compensation Table on page 54 and discussed in Note (5) to the Summary Compensation Table.

(2)	Amounts represent interest earned on amounts credited to savings benefit accounts during 2015. Such amounts are not included in the Summary Compensation Table on page 54 as these amounts are not considered to be above-market interest.

The Deferred Compensation Plan, which was established in January 1982 and amended and restated in December 2014, provides for unfunded deferred compensation arrangements for Alleghany officers and certain other employees. The following descriptions of “Savings Benefit Provisions” and “Compensation Deferral Provisions” of the Deferred Compensation Plan generally apply to amounts that were earned and vested under the Deferred Compensation Plan after December 31, 2004. Amounts earned and vested before January 1, 2005, or the “Pre-409A Benefits,” are subject to less stringent requirements concerning the time of payment of benefits under the Deferred Compensation Plan, but the substantive provisions that apply to the Pre-409A Benefits are generally the same as described below.

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Savings Benefit Provisions

All officers, including our Named Executive Officers, are eligible to participate in the Deferred Compensation Plan on the date of election or appointment as an officer of Alleghany.

Under the Deferred Compensation Plan, each calendar quarter, we credit a book reserve account for each officer who is a participant at any time during such quarter with an amount equal to 3.75% of the officer’s base annual salary. This quarterly credit results in an annual credit of 15% of a participant’s base annual salary, which we refer to as the “Savings Benefit Credit.” Each participant may elect to have those amounts either credited with:

•

interest at the prime rate (the “Prime Rate Alternative”);

•

treated as though invested in common stock (the “Common Stock Alternative”); or

•

increased or decreased by an amount proportionate to the growth or decline of Alleghany stockholders’ equity per share (the “Stockholders’ Equity Alternative”).

In general, payment of these amounts is made or commences on the date elected by the participant, which may not be later than 12 months following termination of employment, either in a lump sum or in installments as elected by the participant.

If a participant chooses the Prime Rate Alternative, that interest is computed from the date the Savings Benefit Credit is credited until the date that the amount is distributed to the participant or the date that the participant elects the Common Stock Alternative or the Stockholders’ Equity Alternative. The “prime rate” for purposes of the Deferred Compensation Plan means the rate of interest announced by JPMorgan Chase Bank as its prime rate at the close of the last business day of each month, which rate is deemed to remain in effect through the last business day of the next month.

Amounts treated as invested in common stock reflect the investment experience which the account would have had if the amounts had been invested, without commissions or other transaction expenses, and held in whole or fractional shares of common stock during the deferral period. These amounts are adjusted as appropriate to reflect cash and stock dividends, stock splits, and other similar distributions or transactions which, from time to time, occur with respect to common stock. Dividends and other distributions are automatically credited at their cash value or the fair market value of any non-cash dividend or other distribution and are deemed to purchase common stock on the date of payment thereof. Common stock is deemed acquired, and is valued for purposes of payout or transfer, at a price per share equal to the mean between the high and low prices thereof on the applicable date on the NYSE Consolidated Tape. A participant’s ability to elect to have his or her Savings Benefit Credit amounts treated as invested (or not invested) in our common stock is subject to compliance with applicable securities laws.

With respect to 2015, Mr. Hicks elected the Stockholders’ Equity Alternative to apply to his Savings Benefit Credit; Mr. Brandon and Mr. Gorham elected to have the Prime Rate Alternative apply to their Savings Benefit Credit; Mr. Sennott elected the Common Stock Alternative to apply to his Savings Benefit Credit; and Mr. Dalrymple elected to have the Stockholders’ Equity Alternative apply to 50% of his Savings Benefit Credit and to have the Prime Rate Alternative apply to 50% of his Savings Benefit Credit.

Compensation Deferral Provisions

The Deferred Compensation Plan provides that participants may elect to defer all or part of their base salary and annual incentive compensation each year other than compensation that would be paid in the form of common stock. Thus, currently, no long-term incentive compensation payable pursuant to the 2007 LTIP or 2012 LTIP may be deferred under the Deferred Compensation Plan. Amounts deferred under the Deferred Compensation Plan are credited with interest at the prime rate, unless a participant elects the Common Stock Alternative or the Stockholders’ Equity Alternative. A participant’s decision to have deferred amounts treated as invested (or not invested) in common stock is also subject to compliance with applicable securities laws.

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Pension Benefits


Name	Plan Name	Number of Years of Credited Service		Present Value of Accumulated Benefit(1)			Payments During Last Fiscal Year
Weston M. Hicks	Alleghany Corporation Retirement Plan		11	$	11,330,203			—
Joseph P. Brandon	Alleghany Corporation Retirement Plan		2		924,285			—
Christopher K. Dalrymple	Alleghany Corporation Retirement Plan		12		1,987,563			—
Roger B. Gorham	Alleghany Corporation Retirement Plan		9		2,603,084			—
John L. Sennott, Jr.	Alleghany Corporation Retirement Plan		—		—	(2)		—

(1)

Reflects the estimated present value of the retirement benefit accumulated under the Retirement Plan as of December 31, 2015 by the Named Executive Officers, based in part on (i) their years of service as of such date, as indicated in the table, and (ii) the Named Executive Officers’ average compensation as of December 31, 2013 as determined under the Retirement Plan, which was $2,425,000 for Mr. Hicks, $1,000,000 for Mr. Brandon, $995,075 for Mr. Gorham and $459,167 for Mr. Dalrymple. The actuarial assumptions used to compute the present values for annuities are a discount rate of 4.25% and the RP-2014 Annuitants sex-distinct tables using Scale MP-2014 with generational projection. The actuarial assumptions used to compute the present values for lump sums are a discount rate of 4.25% for pre-retirement interest, a 30-year U.S. treasury rate of 4.00% for post-retirement interest and the RP-2014 Annuitant male/female (50/50) blended basis mortality table using Scale MP-2014 with generational projection.

(2)	Mr. Sennott commenced employment on April 16, 2013. In light of the expected amendment to the Retirement Plan which occurred in July 2013 and was effective December 31, 2013, the Board did not designate Mr. Sennott as a participant in the Retirement Plan.

The Retirement Plan provides retirement benefits for our employees who are elected officers and who are designated as participants by the Board, including the Named Executive Officers. On July 16, 2013, the Board approved an amendment to the Retirement Plan effective December 31, 2013, whereby the Retirement Plan was closed to new participants and no additional benefit accruals would occur for existing participants after such date. Pursuant to this amendment, base compensation and future years of service are not taken into account when calculating a participant’s retirement benefits. However, future years of service with Alleghany by any participant who was not vested in his or her accrued benefit as of the freeze date will continue to have such service credited toward the Retirement Plan’s five-year vesting requirement. Furthermore, such future years of service will count towards early retirement eligibility and early retirement benefits determination for all participants. On November 17, 2015, the Board approved an amendment, or the “Plan Amendment,” to the Retirement Plan effective December 31, 2015. The Plan Amendment provides for the automatic adjustment of the mortality table used to make certain calculations in the Retirement Plan, in order to reflect revised mortality projections determined by Alleghany in accordance with applicable accounting guidance.

Retirement benefits are paid, following termination of employment, in the form of an annuity for the joint lives of a participant and his or her spouse or, alternatively, actuarially equivalent forms of benefits, including a lump sum. Prior to January 1, 2011, the annual retirement benefit under the Retirement Plan, if paid in the form of a joint and survivor life annuity to a married participant who retires on reaching age 65 with 15 or more years of service, was equal to 67% of the participant’s highest average annual base salary and annual cash bonus over a consecutive three-year period during the last ten years or, if shorter, the full calendar years of employment. On December 13, 2010, pursuant to authority delegated by the Board, the Compensation Committee amended the Retirement Plan, effective January 1, 2011, by eliminating the inclusion of annual cash bonuses earned for years

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subsequent to 2010 in the computation of benefits. As amended, the annual retirement benefit would be the greater of (i) the retirement benefit accrued by the participant at December 31, 2010, based upon eligibility for vesting and years of service credited at such date, pursuant to the benefit formula in effect at December 31, 2010, or (ii) a full service retirement benefit, if paid in the form of a joint and survivor annuity to a married participant who retires on reaching age 65 based upon years of service credited at December 31, 2013, equal to 67% of the participant’s highest average annual base salary over a consecutive three-year period during the ten years ending December 31, 2013 or, if shorter, the full calendar years of employment. The retirement benefit payable to a participant who retires on reaching age 65 with more than five but fewer than 15 years of service will equal the amount produced by the formula set forth in clause (ii) of the preceding sentence multiplied by a fraction the numerator of which is the number of the participant’s years of service at December 31, 2013 and the denominator of which is 15, or, if greater, the retirement benefit accrued at December 31, 2010.

For purposes of the formula, base salary is the amount that would be included in the salary column of the Summary Compensation Table for the relevant years. For computations involving years when annual cash bonuses are included in the formula for determining the amount of the retirement benefit, the cash bonus is the amount of the cash bonus earned under the 2005 MIP or predecessor plan or any other annual incentive bonus plan or discretionary annual award that would be included in either the Bonus or Non-Equity Incentive Plan Compensation column of the Summary Compensation Table as earned in respect of the relevant years. The Retirement Plan’s benefit formula contains a factor which will reduce a married participant’s benefit payments to the extent that a participant is older than his or her spouse.

If a participant becomes totally disabled prior to retirement, then for the period of total disability the participant is treated as earning annual base salary in an amount which is equal to his or her annual base salary at the time of disability, with such base salary amount adjusted annually for inflation. Further, a participant’s period of disability will be treated as continued employment for all purposes under the Retirement Plan, including for purposes of determining his or her years of service.

A participant who has terminated employment may start to receive benefits under the Retirement Plan as early as age 55, but the benefit payable at that time will be reduced to reflect the commencement of benefit payments prior to Normal Retirement Age, which is defined as age 65 with 15 years of service. A participant who terminated employment with us after reaching age 55 and completing at least 20 years of service, or after reaching age 60 and completing at least 10 years of service, will have a smaller reduction (a reduction equal to 3% of his or her accrued benefit) than a participant who terminated employment prior to reaching such age or completing such number of years of service (a reduction equal to 6% of his or her accrued benefit), and therefore has a subsidized early retirement benefit. The benefit payable to a participant who retires after Normal Retirement Age is increased to the greater of (i) the benefit taking into account additional years of service, salary increases and (for years prior to 2011) bonuses paid through the actual date of retirement or (ii) the benefit that is actuarially equivalent to the lump sum that would have been payable at Normal Retirement Age, such lump sum increased with interest to reflect the passage of time since Normal Retirement Age. For all purposes of the Retirement Plan, a participant’s years of service are the number of years, including a fraction thereof, included in the period which starts on the date he or she becomes a participant, and which ends on the date his or her employment with us terminates.

As of December 31, 2015, Mr. Hicks was age 59 and had 13 years of credited service (for the purpose of early retirement qualification), thus he could have retired and begun to receive a retirement benefit as of that date. If Mr. Hicks had retired on December 31, 2015, the present value of his early retirement benefit would have been $10,155,457. As of December 31, 2015, Messrs. Dalrymple and Gorham were under age 55, thus neither of them would have been eligible to receive a subsidized early retirement benefit if he had retired as of that date. If Mr. Dalrymple and Mr. Gorham had retired on December 31, 2015, the present value of their retirement benefits assuming commencement at their earliest retirement dates and reflecting their benefit elections under Section 409A of the Code would have been $1,368,849 for Mr. Dalrymple and $1,870,396 for Mr. Gorham. Mr. Brandon would not have been entitled to any retirement benefit if he had retired as of December 31, 2015 because he would not

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have had five years of service. As noted above, in anticipation of the closing of the Retirement Plan to new participants effective December 31, 2013, the Board did not designate Mr. Sennott as a participant in the Retirement Plan.

Payments Upon Termination Of Employment

The table below provides information regarding the amounts that Messrs. Hicks, Brandon, Dalrymple, Gorham and Sennott would be eligible to receive upon any termination of employment by Alleghany other than for “Cause,” if such termination of employment occurred on December 31, 2015:


Name	Severance under Employment Agreement(1)		Payments under Restricted Stock Unit Matching Grant Award(2)		Acceleration of Payment of Awards under 2007 and 2012 LTIP(3)		Acceleration of Payment of Awards under 2010 MIP(4)		Retirement Plan(5)		Deferred Compensation Plan(6)		Total
Weston M. Hicks	$	1,000,000		—	$	16,803,489	$	1,700,000	$	10,155,457	$	2,780,352	$	32,439,298
Joseph P. Brandon		1,000,000	$	1,545,851		9,444,510		1,620,000		—		528,321		14,138,682
Christopher K. Dalrymple		—		—		2,924,984		614,250		1,368,849		896,487		5,804,570
Roger B. Gorham		1,200,000		—		2,302,107		270,000		1,870,396		1,227,474		6,869,977
John L. Sennott, Jr.		—		—		2,192,912		614,250		—		254,527		3,061,689

(1)	These amounts would be paid by Alleghany upon termination other than for Cause, death or Total Disability (as such terms are defined in the respective employment agreements) in the form of continued payments of base salary in accordance with our normal payroll and procedures.

(2)

Reflects award amount payable to Mr. Brandon under his restricted stock unit matching grant award agreement if Mr. Brandon was terminated without Cause or by reason of his death or Total Disability (as such terms are defined in such matching agreement). The terms of this restricted stock unit matching agreement are described on page 60.

(3)

Reflects payment on a pro rata basis of all outstanding LTIP awards, including amounts paid in February 2016 for the award period ending December 31, 2015, based on the elapsed portion of the award period prior to termination and average annual compound growth in Book Value Per Share through the date of termination, in accordance with the terms of the awards.

(4)	Reflects annual incentive earned in respect of 2015 under the 2010 MIP. These amounts, earned in respect of 2015 performance, were paid to the Named Executive Officers in February 2016 as reported in the Summary Compensation Table on page 54 and as described on pages 49 and 50.

(5)

Reflects payment of vested pension benefits, computed as of December 31, 2015, under the Retirement Plan to Messrs. Hicks, Dalrymple and Gorham. Mr. Brandon was not vested in the Retirement Plan as of December 31, 2015 and Mr. Sennott is not a participant in the Retirement Plan. The determination of these pension benefits is described in more detail on pages 65 through 67. This amount does not include retiree life insurance death benefit, equal to the annual salary of a participant at the date of retirement, payable to our Named Executive Officers.

(6)	Reflects the aggregate vested account balance at December 31, 2015 of each Named Executive Officer’s savings benefit (consisting of Alleghany contributions and interest earned thereon) under the Deferred Compensation Plan.

Certain of our Named Executive Officers would be entitled to payments in the event of the termination of their employment. These payments, other than those that do not discriminate in scope, terms or operation in favor of the Named Executive Officers and that are generally available to all salaried employees, are described below.

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Pursuant to their employment agreements with Alleghany, Messrs. Hicks and Brandon would be entitled to receive continued payments of his base salary until such payments aggregate $1.0 million on a gross basis, payable in accordance with our normal payroll and procedures, following termination of his employment other than for Cause or in the event of his death or Total Disability. As described in more detail on page 60, the JPB Matching Grant Agreement provides for a pro rata payment in the event of the termination of employment without Cause or termination of employment by reason of Mr. Brandon’s death or Total Disability. In February 2013, Mr. Gorham and Alleghany entered into a letter agreement which provides for continued payments to Mr. Gorham of his base salary until such payments aggregate $1.2 million on a gross basis, payable in accordance with our normal payroll and procedures, following termination of his employment other than for Cause or in the event of his death or Total Disability. The foregoing agreements generally define “Cause” to mean conviction of a felony; willful failure to implement reasonable directives of the Chairman or the Board, as well as Alleghany’s chief executive officer in Mr. Brandon and Gorham’s cases, after written notice, which failure is not corrected within ten days following notice thereof; or gross misconduct in connection with the performance of any of their duties. “Total Disability” in the foregoing agreements generally is defined to mean inability to discharge duties due to physical or mental illness or accident for one or more periods totaling six months during any consecutive twelve-month period.

Other than the foregoing, there are no individual arrangements that would provide payments to our Named Executive Officers upon termination other than for cause or in the event of death or disability. We do not have any arrangements with our Named Executive Officers that would provide for payments upon a change of control of Alleghany or upon a change of control and subsequent termination of employment; although Mr. Brandon’s restricted stock unit matching agreement does provide that his holding requirement for JPB Owned Shares will lapse upon a change of control.

A number of the plans described in this Proxy Statement have provisions that may result in payments upon termination of employment under certain circumstances as described below.

2007 LTIP and 2012 LTIP

Awards under our 2007 LTIP and 2012 LTIP provide for the pro rata payment of outstanding awards in the event of the termination of employment prior to the end of the award period. With respect to awards under the 2007 LTIP and 2012 LTIP, the pro rata payment would be based on the elapsed portion of the award period prior to termination and average annual compound growth in Book Value Per Share through the December 31^st immediately prior to date of termination, as determined by the Compensation Committee.

2010 MIP and 2015 MIP

Our 2010 MIP and 2015 MIP also provide that, in the event of a participant’s death or disability prior to the end of the award period for an outstanding award, the participant (or in the event of the participant’s death, the participant’s beneficiary) shall receive such portion of the award, if any, as determined by the Compensation Committee in its sole discretion. If the employment of a participant who has received a qualifying award is otherwise terminated during an award period, the participant shall not be entitled to receive any payment for such award unless the performance goals applicable to such award are achieved and certified by the Compensation Committee, in which case the Compensation Committee, in its sole discretion, may determine that the participant shall be entitled to receive all or any part of the qualifying award that would be payable to the participant upon the achievement of those performance goals. Pursuant to the 2015 MIP, if a participant who has received a non-qualifying award terminates employment for any reason (other than death or disability), the Compensation Committee, in its sole discretion, may determine that the participant is entitled to receive payment of all or any part of the non-qualifying award.

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Retirement Plan and Deferred Compensation Plan

Additional payments upon any termination of employment would be made under our Retirement Plan, as long as the employee is eligible to receive benefits under the Retirement Plan at the time of the termination of employment. Our Deferred Compensation Plan also provides for payments of a participant’s vested savings benefit in the event of any termination of employment in the form previously elected by a participant subject to the provisions of Section 409A of the Code, as applicable, or if no election has been made, in a lump sum. Termination of employment will not cause an enhanced payment or other benefit to be made under the Deferred Compensation Plan. Information with respect to the Retirement Plan is set forth on pages 65 through 67, and information with respect to the Deferred Compensation Plan is set forth on pages 63 and 64.

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STOCKHOLDER NOMINATIONS AND PROPOSALS

Alleghany’s By-Laws, which are available on Alleghany’s website at www.alleghany.com, require that Alleghany be furnished with written notice with respect to:

•

the nomination of a person for election as a director, other than a person nominated by or at the direction of the Board; and

•

the submission of a proposal, other than a proposal submitted by or at the direction of the Board, at a meeting of stockholders.

In order for any such nomination or submission to be proper, the notice must contain certain information concerning the nominating or proposing stockholder and the nominee or the proposal, as the case may be, and must be furnished to Alleghany generally not less than 30 days prior to the meeting.

In accordance with SEC Rule 14a-8, in order for any proposal of a stockholder to be considered for inclusion in Alleghany’s notice of meeting, proxy statement and proxy relating to the 2017 Annual Meeting of Stockholders, scheduled for Friday, April 28, 2017, the proposal must be received by the Secretary of Alleghany by November 18, 2016.

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ADDITIONAL INFORMATION

At any time prior to their being voted, proxies are revocable by written notice to the Secretary of Alleghany, submitting a new proper proxy dated later than the date of the revoked proxy, or by appearance at the 2016 Annual Meeting and voting in person. A quorum comprising the holders of a majority of the outstanding shares of Alleghany’s common stock on the record date must be present in person or represented by proxy for the transaction of business at the 2016 Annual Meeting.

Solicitation of proxies will be made by mail, courier, telephone, facsimile or e-mail and, to the extent necessary, by personal interviews. Alleghany will bear the expenses in connection with the solicitation of proxies. Brokers, custodians and fiduciaries will be requested to transmit proxy material to the beneficial owners of common stock held of record by such persons at Alleghany’s expense. Alleghany has retained Georgeson Shareholder Communications Inc. to aid in the solicitation of proxies, and for its services Alleghany expects to pay fees of approximately $9,500 plus expenses.

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ALLEGHANY CORPORATION

IMPORTANT ANNUAL MEETING INFORMATION




Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.		x


Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.
		Vote by Internet
		• Go to www.envisionreports.com/YAL.
		• Or scan the QR code with your smartphone.
		• Follow the steps outlined on the secure website.
		Vote by telephone
		• Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone. There is NO CHARGE to you for the call.
		• Follow the instructions provided by the recorded message.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Eastern Daylight Time, on April 22, 2016.

Alleghany Corporation Annual Meeting Proxy Card

q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q


A		Proposals — The Board of Directors recommends a vote FOR the listed nominees and FOR Proposals 2 and 3.

Election of Directors

For

Against

Abstain

For

Against

Abstain

⁺

1a - Karen Brenner

1b - John G. Foos

For

Against

Abstain

Ratification of Independent Registered Public Accounting Firm

Ratification of selection of Ernst & Young LLP as Alleghany Corporation’s independent registered public accounting firm for fiscal 2016.

For

Against

Abstain

Say-on-Pay

Advisory vote to approve the compensation of the named executive officers of Alleghany Corporation.


B		Authorized Signatures — This section must be completed for your vote to be counted — Date and Sign Below.

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.


Date (mm/dd/yyyy) — Please print date below.	Signature 1 — Please keep signature within the box.	Signature 2 — Please keep signature within the box.
/ /

IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.

01ZNTC

Important Notice Regarding Internet Availability of Proxy Materials for the Alleghany Corporation 2016 Annual Meeting of Stockholders to be Held on April 22, 2016.

Our proxy materials relating to our Annual Meeting (Notice of Meeting, Proxy Statement, Proxy and 2015 Annual Report to Stockholders on Form 10-K) are also available on the Internet. Please go to www.envisionreports.com/YAL to view and obtain proxy materials online.

For comments and/or address changes, please send an email to info2@alleghany.com or call 1.888.752.1356.

q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q

PROXY — ALLEGHANY CORPORATION

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLEGHANY CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 22, 2016

The undersigned hereby appoints Jefferson W. Kirby, Weston M. Hicks and Christopher K. Dalrymple proxies, each with the power to appoint his substitute and with authority in each to act in absence of the other, to represent and to vote all shares of stock of Alleghany Corporation which the undersigned is entitled to vote at the Annual Meeting of Stockholders of Alleghany Corporation to be held at The Penn Club of New York, 30 West 44^th Street, New York, New York, on Friday, April 22, 2016 at 10:00 a.m., local time, and any adjournments thereof, as indicated on the proposals described in the Proxy Statement, and all other matters properly coming before the meeting.

WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO SUCH DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.

IMPORTANT — THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.


C		Non-Voting Items

Change of Address — Please print new address below.


¢		IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.		+