
–	preside at executive sessions of independent directors;


–	call special executive sessions of independent directors, as appropriate;


–	serve as liaison between the independent directors and the Chairman & CEO;


–	inform the Chairman & CEO of issues arising from executive sessions of the independent directors; and


–	with Board approval, retain outside advisors who report to the full Board on matters of interest to the Board.

Mr. Valenti currently serves as Lead Independent Director.

Board Meetings

Under AAM's by-laws, regular meetings of the ~~independent directors;~~Board are held at least quarterly. Our practice is to schedule certain Board meetings at an AAM manufacturing or technical center so our directors have an opportunity to observe different aspects of our business first-hand. During 2018, the Board held four regularly scheduled meetings.

Directors are expected to attend all Board meetings, meetings of committees on which they serve, and the annual meeting of stockholders. Directors are expected to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. All continuing directors attended 100% of the Board and applicable committee meetings during 2018, except one director missed one Board meeting and another missed two committee meetings that were held on the same day. Overall attendance at Board and committee meetings was 97%. All directors then in office attended the 2018 annual meeting of stockholders. No director attended less than 88% of Board and committee meetings on which he or she served in 2018.

Board Committees

The Board has delegated some of its authority to five committees: the Executive Committee, the Audit Committee, the Compensation Committee, the Nominating/Corporate Governance Committee and the Technology Committee. Each of the Audit, Compensation and Nominating/Corporate Governance Committees has adopted a charter that complies with current NYSE rules relating to corporate governance. Copies of these committee charters are available at http://investor.aam.com.

The Board ~~approval, retain outside advisors and/or consultants who report directly~~approved the rotation of certain directors' committee memberships effective January 2019. The Board believes that periodic rotation of committee membership is generally desirable to ensure that committees regularly benefit from diverse views.

With respect to the Audit Committee, the Board appointed Mr. Parker and Ms. Pierce as new members based on each of their professional experience and expertise. Based on Mr. Parker's prior experience as a chief financial officer, the Board determined that Mr. Parker is a financial expert according to SEC rules. In addition, the Board considered Mr. Parker's concurrent service on the audit committees of three other public companies since his retirement from Harman International Industries, Inc. in March 2017. The Board concluded that, as a retiree, Mr. Parker's simultaneous service on the other audit committees would not impair his ability to effectively serve on AAM's Audit Committee. Mr. Parker has adequate time to fulfill his responsibilities as a member of the Audit Committee and our Board.

Committee membership as of March 21, 2019, the number of meetings held during 2018, and each committee's primary responsibilities are summarized below. Every committee other than the Executive Committee regularly reports on its activities to the full ~~Board on matters of interest to the full~~ Board.



Table of Contents	Corporate Governance



Audit Committee

2018 Meetings: 4 Members: William P. Miller II (Chair) * Herbert K. Parker* Sandra E. Pierce John F. Smith* Samuel Valenti III *Financial Expert	– Oversees the independent auditors' qualifications, independence and performance
	– Oversees the quality and integrity of our financial statements
	– Oversees the performance of our internal audit function
	– Discusses with management the Company's risk assessment and risk management framework
	– Approves audit and non-audit services provided by the independent auditors
	– Oversees the Company's hedging and derivatives practices
*Financial Expert	– Provides oversight of the Company's ethics and compliance programs
	– Oversees our cybersecurity risk management program and receives quarterly reports by our Chief Information Officer



Compensation Committee

2018 Meetings: 5 Members: James A. McCaslin (Chair) William L. Kozyra Peter D. Lyons Sandra E. Pierce Samuel Valenti III	– Recommends the CEO's compensation to the Board and establishes the compensation of other executive officers
	– Recommends incentive compensation and equity-based plans to the Board
	– Approves executive officer compensation to ensure that is designed to support achievement of the Company's business strategy and objectives while considering competitive market practices and shareholder interests
	– Recommends non-employee director compensation to the Board
	– Oversees management's risk assessment of the Company's policies and practices regarding compensation of executive officers and other associates
	– Evaluates and approves corporate goals and objectives for executive officer compensation and evaluates performance in light of these criteria
	– Oversees the preparation of the Compensation Discussion and Analysis (CD&A) and produces a Committee report for inclusion in our annual proxy statement



Nominating/Corporate Governance Committee

2018 Meetings: 4 Members: Elizabeth A. Chappell (Chair) William L. Kozyra Peter D. Lyons James A. McCaslin Herbert K. Parker Samuel Valenti III	– Identifies qualified individuals to serve on the Board and committees
	– Reviews our Corporate Governance Guidelines and Code of Business Conduct and recommends changes as appropriate
	– Oversees succession planning for executive officers and other key executive positions and supports the Board's succession/contingency planning process for the CEO
	– Oversees evaluation of the Board and its committees
	– Reviews committee charters and recommends any changes to the Board
	– Oversees our sustainability program policies, strategies and performance and reviews sustainability/corporate responsibility matters with management



Table of Contents	Corporate Governance



Technology Committee

2018 Meetings: 3 Members: John F. Smith (Chair) Elizabeth A. Chappell William L. Kozyra James A. McCaslin William P. Miller II	– Advises the Board and management on the Company's strategy for innovation and technology
	– Maintains awareness of market demands for technology advancements relative to product, processes and systems
	– Oversees and advises management regarding product, process and systems technologies
	– Reviews technology opportunities as potential ways to increase productivity, efficiency, quality and warranty performance and to support the Company's goals and objectives
	– Conducts strategy discussions with the full Board



Executive Committee

2018 Meetings: 1 Members: David C. Dauch (Chair) James A. McCaslin Samuel Valenti III	– Acts on matters requiring Board action between meetings of the full Board
	– Has authority to act on certain significant matters, limited by our by-laws
	– All members other than Mr. Dauch are independent

Board Oversight of Risk Management

The Board ~~directly~~believes that strong and ~~through its committees, is responsible for overseeing the management of potential risks affecting the Company. In connection with our overall~~effective internal controls and risk management ~~process,~~processes are essential for achieving shareholder value. The Board has oversight for risk management with a focus on the ~~Board regularly reviews information provided by senior management about~~most significant risks facing the ~~Company’s~~Company, including strategic, operational, financial and compliance risks. ~~In addition, the chairs of the Audit, Compensation, Nominating/Corporate Governance~~The Board's risk oversight process builds upon management's risk assessment and ~~Strategy &~~mitigation processes, which include an enterprise risk management program, regular internal management disclosure and compliance committee meetings, a global ethics and compliance program and comprehensive internal audit processes.

~~Table of Contents~~

~~Technology Committees~~The Board implements its risk oversight function both as a full Board and through delegation to Board committees, which regularly report to the full Board. The Board has delegated the oversight of specific risks to Board committees that align with their functional responsibilities, as summarized in the table below.



Table of Contents	Corporate Governance



Responsible Party		Primary Areas of Risk Oversight

Full Board		Oversees overall risk management function and regularly receives reports from the chairs of individual Board committees on risk-related matters falling within each committee's oversight responsibilities. Also receives reports from management on particular risks facing the Company, including through the review of AAM's strategic plan.

Audit Committee		Monitors financial, operational, and compliance risks by regularly reviewing reports and presentations given by management, Internal Audit, Company advisors and the independent auditors. Regularly reviews risk management practices and risk-related policies (for example, AAM's risk management process and cybersecurity strategy) and evaluates potential risks related to internal controls over financial reporting. Oversees cybersecurity risk management and risk controls. Receives quarterly reports from our Chief Information Officer on AAM's cybersecurity program, including AAM's monitoring, auditing, implementation and communication processes, controls and procedures. Monitors financial risks, including capital structure and liquidity risks, and reviews the policies and strategies for managing financial exposure and contingent liabilities.

Compensation Committee		Monitors potential risks related to the design and administration of our compensation plans, policies and programs, including our performance-based compensation programs, to promote appropriate incentives that do not encourage executive officers to take unnecessary and/or excessive risks.

Nominating / Corporate Governance Committee		Monitors potential risks related to our governance practices by, among other things, reviewing succession plans and performance evaluations of the Board and CEO and monitoring legal developments and trends regarding corporate governance practices.

Technology Committee		Monitors risks associated with the Company's product portfolio and our innovation and technology plans.

Identifying and Evaluating Director Candidates

Our Board believes that the most effective oversight comes from a Board that represents a diverse range of experience and perspectives that provide the collective skills, qualifications and attributes necessary to provide sound governance. To carry out its responsibilities and set the appropriate tone at the top, our Board is focused on the ~~activities~~character, integrity and qualifications of ~~their respective committees, including matters related to risk.~~

~~The Audit Committee oversees management of financial risks~~its members, and ~~receives regular reports from management~~ on the ~~Company’s overall risk management~~Board's leadership structure and ~~processes.~~ composition.

The Nominating/Corporate Governance Committee ~~manages risks associated~~reviews with ~~corporate~~the Board the experience and attributes desired for effective governance in our changing industry and ~~management succession planning.~~ evaluates the current Board composition in light of these criteria. Although specific qualifications may vary from time to time, desired qualities and characteristics include:


–	high ethical character and shared values with AAM;


–	high-level leadership experience and achievement at a policy-making level in business, educational or professional activities;


–	breadth of knowledge of issues affecting AAM;


–	special competencies, such as financial, technical, international business or other expertise, or industry knowledge;


–	awareness of a director's vital role in AAM's good corporate citizenship and corporate image; and


–	sufficient time and availability to effectively carry out a director's duties.

The ~~Compensation~~Board as a whole should reflect a balance of knowledge, experience, skills, expertise and diversity that, when taken together, will enhance the quality of the Board’s deliberations and decisions.

The Board believes that diversity is an essential element of Board effectiveness. Consistent with this philosophy, the Board is committed to including in each search qualified candidates who reflect diverse backgrounds, including



Table of Contents	Corporate Governance

diversity of gender and race. The Board formalized this commitment to diversity by amending its Corporate Governance Guidelines in February 2019.

Based on shareholder feedback and the Board's focus on Board diversity and refreshment, the Board enhanced the experience, leadership and diversity of the Board with the appointments of Herbert K. Parker and Sandra E. Pierce in November 2018. These appointments were the result of active recruitment of women and minority candidates. Ms. Pierce was identified as a candidate by Mr. Dauch and Mr. Parker was identified by another Board member.

In addition, for incumbent directors, the Nominating/Corporate Governance Committee ~~oversees risks related to AAM’s compensation programs. The Strategy & Technology Committee oversees risks related~~and the full Board consider attendance, past performance on the Board and contributions to the ~~Company's strategic plan~~Board and ~~AAM’s product, process~~applicable committees. These factors also were taken into consideration in nominating Ms. Chappell, Mr. Parker and ~~systems technology. Additional review or reporting~~Mr. Smith for re-election as Class II directors, each with a term expiring on the date of ~~specific risks is conducted~~the 2022 annual meeting of stockholders.

Our current Board, comprised of 10 directors, reflects the Board's commitment to identify, evaluate and nominate candidates who possess personal qualities, qualifications, skills, and diversity of backgrounds, and provide a mix of tenures that, when taken together, best serve our company and our shareholders. Diversity in tenure creates a good mix of perspectives. Longer-tenured directors bring a deep understanding of the Company and continuity as ~~appropriate or~~new directors join the Board. Newer members bring new perspectives, expertise and diversity as ~~requested by~~ the Board ~~or a committee.~~is refreshed to address changes in the business over time.

~~Stockholder Engagement~~The current mix of top skills and qualifications of our Board members and key features of the Board's composition are depicted below.

Director Qualifications, Skills and Experience

Board Composition




Independence	Tenure	Age	Diversity
90%	7	64	30%
Independent	Average Years of Service	Average Age	Women or Minority



Table of Contents	Corporate Governance

Communicating with the Board

Our Board and management team value the opinions and feedback of our ~~stockholders,~~shareholders, and we engage with stockholders throughout the year on a variety of issues, including our executive compensation program and corporate governance. ~~Stockholders~~Shareholders and other interested parties who wish to communicate with us on these or other matters may contact our Investor Relations Department by email at investorrelations@aam.com or by mail at One Dauch Drive, Detroit, Michigan 48211-1198 (corporate address).

~~Stockholders~~Shareholders or other interested parties may communicate with the Board through the Secretary of AAM by e-mail at AAMBoardofDirectors@aam.com or by mail at the corporate address above. The Board has instructed the Secretary to review all such communications and to exercise his discretion not to forward correspondence to the Board that is inappropriate, such as advertising and business solicitations, routine business matters and personal grievances. However, any director may ~~at any time request~~instruct the Secretary to forward any communication received by the Secretary on behalf of the Board.

~~Code of Business Conduct~~Corporate Governance and ESG Policies

~~AAM~~Because we believe corporate governance is integral to creating long-term shareholder value, our Board has adopted ~~a Code~~company-wide corporate governance policies, which are periodically reviewed and revised as appropriate to ensure that they reflect the Board's corporate governance objectives.

Please visit the Governance section of ~~Business Conduct that is designed~~our website (http://investor.aam.com/governance) to ~~assist AAM associates, executive officers~~learn more about our corporate governance practices and ~~members~~to access the following materials:


–	Corporate Governance Guidelines


–	Code of Ethics for the CEO, CFO and other Senior Financial Executives (Code of Ethics)


–	Charters of our Board Committees


–	Code of Business Conduct

A written copy of ~~the Board in conducting AAM’s business with the highest standards of ethics and integrity. AAM has also adopted a Code of Ethics applicable to~~ our ~~CEO, CFO and other Senior Financial Executives (Code of Ethics). The Board annually reviews the Code of Business Conduct and makes updates as appropriate. AAM’s~~ Code of Business Conduct and Code of Ethics ~~are available on our website at~~ ~~http://investor.aam.com.~~ ~~A written copy~~ also may be obtained by any stockholder without charge upon request to the AAM Investor Relations Department by email at investorrelations@aam.com or by mail at our corporate address above.

We recently published our first Sustainability Review, a baseline-setting document, which describes key focus areas of our ESG program. For more information on AAM's ESG program and policies, please visit www.aam.com/Sustainability.



Table of Contents	Compensation of Directors

Compensation of Directors

The Compensation Committee has authority to develop and recommend to the full Board the compensation policies and programs for non-employee directors. The Committee retains Meridian Compensation Partners LLC (Meridian) to advise when setting non-employee director compensation to ensure it is market-based, aligned with shareholder interests and consistent with our compensation principles.

AAM's compensation program for our non-employee directors is designed to meet the following objectives:


–	recognize the significant investment of time and expertise required of directors;


–	align the directors' interests with the long-term interests of our shareholders; and


–	ensure that the compensation of directors is well perceived by our shareholders.

2018 Annual Retainer and Committee Chair Retainers



Annual retainer	$	110,000
Committee chair annual retainer:
Audit Committee chair	20,000
Compensation Committee chair	15,000
Other committee chair	10,000
Lead director annual retainer	30,000

Non-employee director compensation for 2018 remained unchanged from 2017.

Annual Equity Grant

Non-employee directors serving on the Board on the date of the 2018 annual meeting received a grant of 8,711 restricted stock units (RSUs) with a grant date value of $125,000. The RSUs are payable in stock and vest in one year, unless vesting is accelerated upon death, disability or a change in control. Non-employee directors may elect to defer settlement of the RSUs until after termination of service from the Board.

Director Stock Ownership Guidelines

Our non-employee director stock ownership guidelines provide that each non-employee director should own shares with a value equal to at least five times the director annual cash retainer. Non-employee directors are expected to meet the guidelines within five years from the date of election to the Board or February 2017, whichever is later. For purposes of meeting these guidelines, shares owned directly, deferred RSUs and unvested RSUs are counted. Each non-employee director has met, or is on track to meet, these ownership guidelines. Current stock ownership of non-employee directors is shown in the Beneficial Stock Ownership table.

Anti-hedging and Anti-pledging policy

Non-employee directors are prohibited from entering into transactions that may result in a financial benefit if our stock price declines, or any hedging transaction involving our stock, including the use of financial derivatives, short sales or any similar transactions. Pledging of AAM stock is also prohibited.



Table of Contents	Compensation of Directors

Director Compensation Table

Total 2018 compensation of our non-employee directors is shown below.



Name	Fees Earned or Paid in Cash⁽¹⁾ ($)	Stock Awards⁽²⁾ ($)	All Other Compensation⁽³⁾ ($)	Total ($)
Elizabeth A. Chappell	120,000	125,003	700	245,703
William L. Kozyra	110,000	125,003	700	235,703
Peter D. Lyons	110,000	125,003	800	235,803
James A. McCaslin	125,000	125,003	600	250,603
William P. Miller II	130,000	125,003	700	255,703
Herbert K. Parker⁽⁴⁾	18,333	—	—	18,333
Sandra E. Pierce⁽⁴⁾	9,167	—	—	9,167
John F. Smith	120,000	125,003	700	245,703
George Thanopoulos⁽⁵⁾	36,667	—	—	36,667
Samuel Valenti III	140,000	125,003	1,400	266,403


(1)	Fees earned in 2018 for services whether paid currently in cash or deferred. Non-employee directors may elect to defer, on a pre-tax basis, a portion of their retainer and meeting fees and receive tax-deferred earnings (or losses) on the deferrals under AAM’s Executive Deferred Compensation Plan.

(2)

Reflects the full grant date fair value of RSUs granted on May 3, 2018 calculated in accordance with FASB ASC 718 (without any reduction for risk of forfeiture) as determined by applying the assumptions used in our financial statements. The grant date fair value of equity awards was calculated using the closing market price of AAM common stock on the grant date ($14.35). See Note 10 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2018 for assumptions underlying the valuation of equity awards.

(3)

The Company reimburses non-employee directors for travel and related out-of-pocket expenses in connection with attending Board, committee and stockholder meetings. From time to time, the Company invites spouses of non-employee directors to attend Company events associated with these meetings. The Company pays for spousal travel and certain other expenses and reimburses non-employee directors for taxes attributable to the income associated with this benefit. Amounts reflect reimbursement of taxes on this income.


(4)	Mr. Parker joined the Board on November 1, 2018 and Ms. Pierce joined the Board on November 23, 2018.


(5)	Mr. Thanopoulos resigned from the Board on May 7, 2018.

As of December 31, 2018, each incumbent non-employee director had the number of outstanding RSUs (including those deferred) shown below. No options were outstanding as of December 31, 2018.



Name	Restricted Stock Units Outstanding (#)
Elizabeth A. Chappell	60,157
William L. Kozyra	23,573
Peter D. Lyons	27,585
James A. McCaslin	49,057
William P. Miller II	63,407
Herbert K. Parker ⁽¹⁾	—
Sandra E. Pierce ⁽¹⁾	—
John F. Smith	49,057
Samuel Valenti III	33,044

(1) Mr. Parker and Ms. Pierce did not receive a grant of RSUs.



Table of Contents	Beneficial Stock Ownership

Beneficial Stock Ownership

The following tables show the number of shares of AAM common stock beneficially owned by:


–	each person known to us who beneficially owns more than 5% of AAM common stock;


–	each of our non-employee directors and nominees as of March 5, 2019;


–	each of the named executive officers shown in the Summary Compensation Table; and


–	all directors, nominees and executive officers as a group as of March 5, 2019.

A beneficial owner of stock is a person who has voting power (the power to control voting decisions) or investment power (the power to cause the sale of the stock). All individuals listed below have sole voting and investment power over the shares (unless otherwise noted). The beneficial ownership calculation includes 111,742,180 shares of AAM common stock outstanding on March 5, 2019 (record date).



	Shares Beneficially Owned	Percent of Shares Outstanding
Greater Than 5% Owners
Blackrock, Inc.⁽¹⁾	16,410,999	14.70
55 East 52nd Street
New York, NY 10055
The Vanguard Group⁽²⁾	11,599,669	10.38
100 Vanguard Blvd.
Malvern, PA 19355
Dimensional Fund Advisors LP⁽³⁾	9,386,258	8.40
6300 Bee Cave Road
Austin, TX 78746
Barrow, Hanley, Mewhinney & Strauss, LLC⁽⁴⁾	6,146,108	5.50
6300 Bee Cave Road
Austin, TX 78746


Non-Employee Directors ⁽⁵⁾
Elizabeth A. Chappell	66,133	*
William L. Kozyra	27,585	*
Peter D. Lyons	32,585	*
James A. McCaslin	57,557	*
William P. Miller II	74,607	*
Herbert K. Parker	—	—
Sandra E. Pierce	—	—
John F. Smith	54,057	*
Samuel Valenti III	43,044	*

Named Executive Officers
David C. Dauch⁽⁶⁾	645,703	*
Christopher J. May	38,668	*
Michael K. Simonte	170,349	*
Alberto L. Satine	34,733	*
Norman Willemse	62,452	*
All Directors and Executive Officers as a Group (22 persons)	1,425,508	1.3

(*) Less than 1% of the outstanding shares of AAM common stock.


(1)	Based on the Schedule 13G filed on January 24, 2019 by Blackrock, Inc., reporting sole voting power over 16,130,452 shares and sole investment power over 16,410,999 shares.


(2)	Based on the Schedule 13G filed on February 11, 2019 by The Vanguard Group, reporting sole voting power over 111,941 shares, sole investment power over 11,487,466, shared voting power over 13,600 shares and shared investment power over 112,203 shares.


(3)	Based on the Schedule 13G filed on February 8, 2019 by Dimensional Fund Advisors LP, reporting sole voting power over 9,009,327 shares and sole investment power over 9,386,258 shares.



Table of Contents	Beneficial Stock Ownership


(4)	Based on the Schedule 13G filed on February 12, 2019 by Barrow, Hanley, Mewhinney & Strauss, LLC, reporting sole voting power over 4,286,382 shares and shared voting power over 1,859,726 shares and sole investment power over 6,146,108 shares.


(5)	Includes vested RSUs awarded to non-employee directors that have been deferred. For the number of RSUs held by each non-employee director, see table included in Compensation of Directors.


(6)	Includes 548 shares held in trusts for the benefit of Mr. Dauch’s children.

Related Person Transactions Policy

The Board has adopted a written policy and procedure for the review, approval and ratification of transactions involving AAM and any “related person” as defined in the policy. This policy supplements AAM’s other conflict of interest policies in our Code of Business Conduct. The Audit Committee is responsible for reviewing, approving and ratifying all related person ~~transactions in accordance with the policy and the Audit Committee's charter.~~transactions.

For purposes of this policy, a related person transaction includes any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships in which AAM is or is expected to be a participant, the amount involved exceeds $120,000, and a related person has or will have a material interest. A related person includes directors and executive officers and their immediate family members, stockholders owning more than five percent of the Company's outstanding common stock as of the last completed fiscal year, and any entity owned or controlled by any one of these persons.

The Audit Committee makes a determination whether a related person's interest in a transaction is material based on a review of the facts and circumstances. In deciding whether to approve or ratify a related person transaction, the Audit Committee will take into account, among other factors it deems appropriate, (1) whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and (2) the significance of the related person's interest in the transaction.

A member of the Audit Committee may not participate in the review or vote concerning any related person transaction in which the Audit Committee member or his or her immediate family member is involved.

The policy also provides that certain types of transactions are deemed to be pre-approved by the Audit Committee and do not require separate approval or ratification. During fiscal year ~~2015~~2018 and as of the date of this proxy statement, the Company has not engaged in any reportable related person transactions.

~~Table of Contents~~

~~Board and Committee Meetings~~

Directors are expected to attend all Board meetings, meetings of committees on which they serve, and stockholder meetings. Directors are expected to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. During 2015, the Board held four regularly scheduled meetings and one special meeting. All continuing directors attended 100% of the Board and applicable committee meetings during 2015, except two continuing directors each missed one committee meeting. No director attended less than 75% of required meetings. Overall attendance at such meetings was approximately 99%. All incumbent directors and nominees attended the 2015 annual meeting of stockholders.

~~The following table shows committee membership as of March 24, 2016 and the number of committee meetings held during 2015.~~

~~COMMITTEE MEMBERSHIP AS OF MARCH 24, 2016~~

Name of Director
Audit
Committee
Compensation
Committee
Nominating/
Corporate
Governance
Committee
Executive
Committee
Strategy & Technology
Committee ⁽¹⁾
David C. Dauch Chair X
Elizabeth A. Chappell Chair X X
Steven B. Hantler X X
William. L. Kozyra X X X
Peter D. Lyons X X X
James A. McCaslin X Chair X X
William P. Miller II Chair X
John F. Smith X Chair
Samuel Valenti III X X X X X
No. of Meetings in 2015 5 6 4 — 6

Section 16(a) Beneficial Ownership Reporting Compliance

~~(1) The Strategy & Technology Committee was created effective July 30, 2015 as a result~~Section 16(a) of the ~~Board's consolidation~~Securities Exchange Act of ~~the Strategy Committee~~1934 requires our directors and ~~Technology Committee. The number~~executive officers, and persons who own more than 10% of meetings held by each of these committees during 2015 is as follows: Strategy Committee, 3 meetings; Technology Committee, 2 meetings; and Strategy & Technology Committee, 1 meeting. This change in committee structure is discussed in the ~~Strategy & Technology Committee~~ ~~section below.~~

~~Audit Committee~~

~~The Audit Committee assists the Board in fulfilling its oversight responsibility with respect to:~~

~~the quality and integrity~~a registered class of our ~~financial statements;~~

~~our compliance~~equity securities, to file with ~~legal and regulatory requirements;~~

~~our independent auditors’ qualifications and independence; and~~

~~the performance of our internal audit function and independent auditors.~~

~~The Audit Committee's responsibilities are more fully described in its written charter, which is available on AAM’s website at~~ ~~http://investor.aam.com.~~

All members of the Audit Committee are independent and financially literate under NYSE listing standards and independent under our Director Independence Guidelines. The Board has also determined that Mr. Miller and Mr. Smith are "audit committee financial experts" as defined by the Securities and Exchange Commission (SEC).

~~Compensation Committee~~

~~The Compensation Committee's responsibilities include the following:~~

~~establishing~~ initial reports of ownership and ~~reviewing AAM’s compensation philosophy and programs for executive officers;~~

~~approving executive officer compensation that is designed to support achievement~~reports of ~~AAM’s business strategy and objectives while considering competitive market practices and stockholder interests;~~

~~approving corporate goals and objectives for executive officer compensation and evaluating executive officer performance~~changes in ~~light~~ownership of our common stock. Based solely on our review of these ~~criteria;~~reports, and written representations from such reporting persons, we believe that the Section 16(a) filing requirements for such reporting persons were met during 2018.



Table of Contents	Advisory Vote on Executive Compensation

Proposal 2: Advisory vote on Executive Compensation

AAM is seeking a non-binding advisory vote from our stockholders to approve the compensation of ~~Contents~~

~~Table of Contents~~

The CEO provides the Compensation Committee with his evaluation of the performance of the Company’s executive officers, including the other named executive officers (NEOs). The CEO and Vice President, Human Resources make compensation recommendations for executive officers, including base salary levels and the amount and mix of incentive awards.

~~The CEO, Vice President & CFO and the Vice President, Human Resources develop and recommend performance objectives and targets for AAM’s incentive compensation programs.~~



Table of Contents	Compensation Discussion and Analysis

~~The Vice President, Human Resources assists the Chair of the Compensation Committee in developing meeting agendas and oversees the preparation of meeting materials on the matters to be considered.~~

The CEO, President, Vice President & CFO, the Vice President, Human Resources and the General Counsel, Secretary & Chief Compliance Officer regularly attend Compensation Committee meetings. Management does not attend the executive session of the Compensation Committee.

~~Role of Compensation Consultant~~

The Compensation Committee has retained Meridian as its independent compensation consultant. Meridian provides the Compensation Committee with independent advice and ongoing recommendations on compensation matters related to our executive officers and non-employee directors. Meridian also provides the Compensation Committee with competitive market data, peer group analyses and updates on compensation trends and regulatory developments.

In the course of fulfilling its responsibilities, Meridian may communicate directly with the Chair of the Compensation Committee. Meridian also meets with management to gather information, prepare materials, and review proposals to be made to the Compensation Committee. Meridian provides no other services to the Company other than those described above has no other direct or indirect business relationships with the Company or any of its subsidiaries or affiliates.

The Compensation Committee determined that Meridian is independent of management and that the services provided by Meridian to the Compensation Committee do not give rise to any conflicts of interest. In written correspondence to the Compensation Committee, Meridian provided detailed information addressing each of the six independence factors set forth in NYSE listing standards. In this correspondence and in communications with the Compensation Committee, Meridian affirmed its independence and that of its partners, consultants and employees who service the Compensation Committee on executive compensation matters.

~~Nominating/Corporate Governance Committee~~

~~The Nominating/Corporate Governance Committee’s primary responsibilities are to:~~

~~identify qualified individuals to serve on the Board and committees;~~

~~review our Corporate Governance Guidelines and Code of Business Conduct and recommend changes as appropriate; and~~

~~oversee and approve the process for succession planning for the CEO and other executive officers.~~

~~The Nominating/Corporate Governance Committee's responsibilities are more fully described in its written charter, which is available on our website at~~ ~~http://investor.aam.com.~~ ~~All members of the Nominating/Corporate Governance Committee are independent under NYSE listing standards and our Director Independence Guidelines.~~

~~Selection Process for Director Nominees.~~ In consultation with the Chairman & CEO, the Nominating/Corporate Governance Committee identifies, evaluates and recommends potential candidates for membership on the Board. This committee conducts inquiries into the backgrounds and qualifications of the candidates and considers questions of independence and possible conflicts of interest. Based on the committee’s evaluation, candidates who meet the Board’s criteria may receive further consideration, which may include interviews with the committee and other directors. The committee then submits its recommendations for nominees to the Board for approval.

Before the Board nominates an incumbent director for re-election by our stockholders, the incumbent director is evaluated by the Nominating/Corporate Governance Committee and/or the Board. This evaluation is based on, among other things, each incumbent director’s contributions to the activities of the Board. After consideration of each incumbent Class II director's qualifications and independence, the committee recommended that the Board nominate Ms. Chappell and Mr. Smith for re-election as Class II directors, each with a term expiring on the date of the 2019 annual meeting of stockholders. Upon review, the Board decided to recommend Ms. Chappell and Mr. Smith for re-election at the 2016 annual meeting of stockholders.

~~Table of Contents~~

Pursuant to AAM's by-laws, the Board may establish the size of the board by resolution, provided there is a minimum of three members. In February 2016, the Board determined that the Board shall consist of eight directors as of the date of the 2016 annual meeting.

~~Director Qualifications.~~ AAM’s Corporate Governance Guidelines provide the qualifications for Board membership. Candidates for director nominees to the Board are reviewed in consideration of the current composition of the Board, the operating requirements of the Company and the interests of stockholders. Although specific qualifications may vary from time to time, desired qualities and characteristics include:

~~high ethical character and shared values with AAM;~~

~~high-level leadership experience and achievement at a policy-making level in business, educational or professional activities;~~

~~breadth of knowledge of issues affecting AAM;~~

~~the ability to contribute special competencies to Board activities, such as financial, technical, international business or other expertise, or industry knowledge;~~

~~awareness of a director's vital role in AAM's good corporate citizenship and corporate image; and~~

~~sufficient time and availability to effectively carry out a director's duties.~~

The Board as a whole should reflect the appropriate balance of knowledge, experience, skills, expertise and diversity that, when taken together, will enhance the quality of the Board’s deliberations and decisions. Although the Board has no formal policy regarding diversity, the Board believes that diversity is an essential element of Board effectiveness. In this context, diversity is defined broadly to include differences in background, skills, education, experience, gender, race, national origin and culture.

The Nominating/Corporate Governance Committee considers recommendations of potential candidates from members of our Board, our Chairman & CEO and our stockholders. For director candidates recommended by stockholders, the Nominating/Corporate Governance Committee follows the procedures described below in ~~Other Matters, Stockholder Proposals for 2017 Annual Meeting~~. The committee will evaluate candidates recommended by stockholders using substantially the same criteria that are considered in evaluating director candidates recommended by our Board members or Chairman & CEO.

~~Succession Planning.~~ The Nominating/Corporate Governance Committee is responsible for overseeing the Company’s succession planning process for executive officers and other key executive positions at AAM. In performing this role, this committee monitors and approves management’s succession planning process and actions and, with respect to the CEO, makes recommendations to the full Board for approval. The Board has primary responsibility for CEO succession planning and develops both long-term and contingency plans for CEO succession. The Company’s long-term and ongoing succession planning program is designed to support effective senior leadership development and succession in a manner that positions AAM to achieve its strategic, operating and financial performance goals, and enhance stockholder value.

~~Strategy & Technology Committee~~

In July 2015, the Board made a key change to its committee structure. By consolidating the Technology Committee and Strategy Committee, the Board created a new Strategy & Technology Committee and appointed all Board members to serve on this committee. This structural change reflects the Board's focus on product, process and systems technologies as an integral part of AAM's business growth strategy.

Effective July 30, 2015, the Strategy & Technology Committee assumed responsibility for the combined duties of the previously separate Technology Committee (formed in 2004) and Strategy Committee (formed in 2012). Accordingly, the Strategy & Technology Committee oversees the development and implementation of AAM’s strategic plan and provides advice to management regarding specific strategic opportunities. This committee also provides oversight and advice to management regarding product, process and systems technologies. Coordination of AAM's strategic plan with the development and acquisition of new technologies is a primary objective of this new committee. In addition, the committee conducts an interactive strategic planning process with management, which includes the committee's approval of strategic goals and objectives and review of potential corporate acquisitions, divestitures, joint ventures and strategic alliances.

~~Executive Committee~~

~~The Executive Committee exercises the authority of the Board during the intervals between Board meetings and does not meet on a regular basis.~~

~~Table of Contents~~

~~COMPENSATION OF EXECUTIVE OFFICERS~~

~~Compensation Discussion and Analysis~~

~~Executive Summary~~

Compensation Discussion and Analysis

Our executive compensation program reflects an externally competitive compensation structure based on a market study of executive compensation programs in AAM's comparative peer group. In addition to attracting and retaining key executives, our program is designed to ~~drive Company~~attract, motivate and ~~individual performance while aligning~~retain high quality leaders that are necessary to manage a company of AAM's size and complexity. In designing our executive compensation program, the Compensation Committee (Committee) strives to align the incentives of our named executive officers (NEOs) with the interests of our ~~executives with those~~shareholders by using performance metrics and challenging goals that tie directly to our business strategy. We believe consistent execution of our ~~stockholders. In order to ensure that~~strategy will drive long-term value creation.

Named Executive Officers

The Compensation Discussion and Analysis (CD&A) provides a description of our executive compensation ~~program drives~~programs, including the Committee's underlying philosophy and decision-making process, components of compensation, and the relationship between AAM's performance and the compensation earned by our NEOs in ~~support of our strategic principles and cultural values, we regularly compare our compensation practices and governance against market best practices and consider stockholder feedback.~~

~~Named Executive Officers~~

2018. Our NEOs for the fiscal year ending December 31, ~~2015 are:~~

~~David C. Dauch, Chairman & Chief Executive Officer;~~

~~Christopher J. May, Vice President & Chief Financial Officer;~~

~~Michael K. Simonte, President;~~

~~Alberto L. Satine, President Driveline;~~

~~Norman Willemse, President Metal Formed Products; and~~

~~Terry J. Woychowski,~~ ~~Former~~ ~~Senior Vice President, Advanced Engineering.~~

~~Mr. Woychowski's employment with the Company ended effective December 9, 2015. Mr. Woychowski is included as an NEO pursuant to SEC rules. The terms of Mr. Woychowski's separation from the Company~~2018 are ~~described below in the~~ ~~Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table~~.

~~2015 Highlights~~

~~Senior Leadership~~

During 2015, the Board made executive officer appointments that enhance AAM's senior leadership team and reflect our ongoing commitment to succession planning. These key appointments were made effective August 1, 2015.shown below.

~~Mr. Simonte~~: Mr. Simonte, who was promoted to President, has been with AAM for 17 years, most recently serving as Executive Vice President & Chief Financial Officer since 2009. Mr. Simonte served as the Company's Chief Financial Officer since 2006. Mr. Simonte reports to Mr. Dauch.

Named Executive Officers

David C. Dauch

Chairman & Chief Executive Officer

Christopher J. May

Vice President & Chief Financial Officer

Michael K. Simonte

President

Alberto L. Satine

President Electrification (title at 12/31/18)

Norman Willemse

President Metal Forming

~~Mr. May~~: Mr. May, who was promoted to Vice President & Chief Financial Officer, has been with AAM for over 21 years, most recently serving as Treasurer since 2011. Mr. May has held positions of increasing responsibility in corporate finance, internal audit and treasury during his career with AAM. Mr. May reports to Mr. Dauch.

~~Mr. Satine and Mr. Willemse~~: The senior leadership team was also strengthened with the advancements of Mr. Satine, who was promoted to President, Driveline (most recently serving as Senior Vice President, Driveline Business Unit) and Mr. Willemse, who was promoted to President, Metal Formed Products (most recently serving as Vice President, Metal Formed Products Business Unit). Both Mr. Satine and Mr. Willemse joined AAM in 2001 and have served in leadership positions of increasing responsibility over AAM's global operations. Mr. Satine and Mr. Willemse each report to Mr. Simonte.

The Board believes these enhancements to AAM's leadership team further position AAM to meet its strategic business objectives and reinforce AAM's commitment to quality, technology leadership and operational excellence.

~~Performance and Pay~~

AAM had an outstanding year in 2015, achieving record sales and gross profit for the year. Strong sales growth, which outpaced the industry for the three-year period ending 2015, and solid operational performance resulted in increased profitability and cash flow. AAM also made measurable progress in diversifying our business. For the three-year period ending 2015, AAM's compound annual growth rate was nearly 20% for non-General Motors sales.

As discussed in more detail below, improvements in the Company's performance in 2015 resulted in higher incentive payouts as compared to 2014 payouts. The 2015 incentive payouts reflect an overall pay-for-

~~Table of Contents~~

~~performance alignment. This result supports AAM's compensation objectives of rewarding performance and aligning the interests of our executive officers with those of our stockholders.~~

~~Changes to Executive Compensation Program~~

~~In 2015, we made the following key changes to our executive compensation program:~~

Adopted a change in control (CIC) Plan for executive officers. The CIC Plan provides eligible executive officers with severance benefits only if a qualifying termination of employment occurs within two years of a CIC (double-trigger). Severance benefits under the CIC Plan include, among other things, a cash severance payment equal to a multiple of two times base salary and annual bonus. We adopted this arrangement to reflect the competitive market practice, aid in retention and enable our executive officers to objectively consider corporate transactions that could impact their employment status. Mr. Dauch and Mr. Simonte are entitled to similar CIC severance benefits under each of their employment agreements.

Entered into an amended and restated employment agreement with Mr. Dauch that increased cash severance benefits from two times to three times his annual salary and bonus that would be payable upon a qualifying termination of employment that occurs within two years following a CIC. Mr. Dauch's cash severance benefits were increased to reflect competitive market practice.

~~Entered into an employment agreement with Mr. Simonte on August 1, 2015 in connection with his appointment as President.~~

~~Adopted double-trigger vesting of all equity-based long-term incentive awards in connection with a CIC to reflect best practice.~~

Amended and restated our 2012 Omnibus Incentive Plan to add 2.1 million shares (approved by our stockholders for issuance under the plan), which will permit us to continue to grant equity compensation to our directors, executive officers and other key executives while maintaining dilution levels within industry practice.

Amended our annual incentive plan to include operating income margin as an additional performance metric for determining payouts to executive officers beginning in 2016. Operating income margin is a key metric that reflects our overall business results. We believe investors consider operating income margin as a factor in evaluating Company performance.

~~Results of 2015 Say-on-Pay Vote~~

At our 2015 annual meeting, over 98% of the votes cast were in favor of the Company's say-on-pay proposal. The Compensation Committee (Committee) and the Board considered this favorable outcome as a reflection of our stockholders' strong support of the overall executive compensation program for our NEOs.

~~What we do...~~.

~~Emphasize performance-based compensation~~

~~A substantial majority of total direct compensation is variable and at risk~~

~~Mix of annual and long-term incentives balances the focus between achievement of short-term results and long-term share appreciation~~

~~Annual incentive payouts are directly linked to achievement of short-term financial measures~~

~~Long-term incentive compensation is 66% performance based~~

~~Long-term incentives are designed to drive the Company's long-term success, profitability and growth~~

~~Use an independent compensation consultant and peer group analysis~~

~~Independent compensation consultant annually performs market study of pay and best practices~~

~~Compensation consultant provides independent advice to the Compensation Committee~~



• Table of Contents	Compensation Discussion and Analysis

Executive Summary

2018 Financial and Performance Highlights

By the end of 2018, we reached a record $7.27 billion in sales on the strength in our core markets and key product segments. We also generated $1.18 billion in Adjusted EBITDA and achieved a record-setting $772 million in cash from operations.

2018 Achievements



þ	Delivered on our key strategic objectives of profitable growth, diversification, outstanding financial performance, and technology leadership.	þ	Strong cash flow generation and over $200 million in senior debt payments

þ	Formed joint venture with Liuzhou Wuling in China	þ	Recognized as a Fortune 500 Company

þ	~~Total direct compensation targeted at 50~~QUANTUM^TMtechnology wins Altair and SAA Lightweighting Awards	þ	Met key integration milestones, including synergy attainment from recent acquisitions

þ	5^th~~percentile~~new business award for our EcoTrac^®disconnecting all-wheel-drive technology	þ	Named GM Supplier of ~~pay among our peer group~~the Year for 2^ndconsecutive year

þ	Continued to fund significant capital and R&D investments in order to drive organic growth to meet our strategic goals	þ	Sold Aftermarket division of our Powertrain Business Unit for $50 million

~~Mitigate undue risk in compensation programs~~

~~All incentive award payouts are capped~~

~~A risk assessment of compensation programs is performed annually~~



Table of Contents	Compensation Discussion and Analysis

~~Clawback policy ensures accountability~~

~~Enforce stock ownership requirements for executive officers~~

~~CEO stock ownership requirements are 5 times annual base salary~~

~~Other NEO stock ownership requirements are 2 to 3 times annual base salary~~

~~Table of Contents~~

~~Utilize double-trigger change-in-control plan~~

~~Severance payments and vesting of equity awards require both a change in control and a qualifying termination of employment~~

~~What we don't do....~~

~~No hedging or pledging of Company stock~~

~~No excise tax gross-ups~~

~~No excessive perquisites~~

~~No excessive change-in-control or executive severance provisions~~

Executive Compensation ~~Philosophy and~~Highlights

Compensation Program Metrics Link to Strategic Business Objectives

The Committee determines the overall compensation philosophy of the Company. The Committee believes that the compensation paid to executives should be structured to provide AAM executives with meaningful rewards, while maintaining alignment with stockholder interests, our cultural values and strategic principles. Accordingly, AAM’s executive compensation program consists of a mix of base salary, annual incentive compensationutilizes both short- and long-term incentive compensation, with limited perquisites and other personal benefits. A significant portion of total direct compensation is performance-based and contingent upon the achievement of stated Company performance goals.

~~Compensation Objectives.~~ ~~The following objectives are considered in determining compensation programs and pay levels for our NEOs.~~

~~Compensation and benefit programs should attract, motivate and retain experienced executives who are vital~~financial metrics relative to our ~~short-term and long-term success, profitability and growth.~~ AAM makes an effort to remain competitive by targeting pay levels of our comparative peer group while considering industry conditions and other market influences. Our compensation programs should encourage high-achieving, marketable executives to remain motivated and committed to AAM for long and productive careers.

~~Compensation and benefit programs should reward Company and individual performance.~~ Our compensation programs strive to deliver competitive compensation for exceptional individual and Company performance as compared to companies in our comparative peer group. As executives progress to higher level leadership positions, a greater portion of their compensation is linked to Company performance measured against financial and operationalbusiness objectives, ~~and to stockholder returns.~~

~~Compensation and benefit programs should foster the long-term focus required to deliver value to our stockholders.~~ Our long-term incentive compensation program motivates executive officers to achieve our strategic objectives and deliver long-term value creation to our stockholders. Executive officers who influence long-term results have a greater proportion of their compensation tied to long-term performance.

~~Total compensation opportunities~~ ~~should reflect~~ ~~each executive’s level of responsibility and contribution to AAM.~~ While the overall structure of compensation and benefit programs should be broadly similar across the Company, individual pay levels and benefit packages will reflect differences in job responsibilities, geography and marketplace considerations.

~~Stock ownership requirements for executive officers should align their interests with those of our stockholders.~~ Our stock ownership requirements align our executive officers’ interests with those of stockholders and reinforce the importance of making sound long-term decisions. AAM’s executive officers are required to maintain a certain level of stock ownership based on their position.

~~Table of Contents~~

~~Peer Group and Compensation Benchmarking~~

~~Determination of Comparative Peer Group~~

The Committee uses a comparative peer group in determining competitive pay levels and compensation structure, setting incentive pay opportunities and assessing Company performance relative to its peers in support of AAM's executive compensation philosophy and objectives. The Committee annually reviews the composition of the comparative peer group and makes adjustments to reflect changes in the Company's business as well as ~~industry and market conditions.~~relative total shareholder return (TSR) as a long-term incentive (LTI) metric. The following chart demonstrates how our incentive compensation metrics correlate to our strategic business objectives.

~~Our current comparative peer group consists of the following companies:~~



~~A. O. Smith Corporation~~Strategic Business Objective	~~Flowserve Corporation~~Alignment	~~Tower International Inc.~~
~~BorgWarner Inc.~~ ^*	~~Kennametal Inc.~~	~~Trinity Industries, Inc.~~
~~Briggs & Stratton~~	~~Lear Corporation~~ ^*	~~USG Corporation~~
~~Cooper-Standard Holdings, Inc.~~	~~Meritor Inc.~~ ^*	~~Valmont Industries, Inc.~~
~~Dana Holding Corporation~~ ^*	~~Regal-Beloit Corporation~~	~~Visteon Corporation~~ ^*
~~Donaldson Company, Inc.~~	~~Tenneco Automotive Inc.~~ ^*	~~Woodward Inc.~~
~~Federal-Mogul Corporation~~	~~Terex Corporation~~	Incentive Metric

* Included in our competitor peer group as disclosed in our 2015 annual reportContinue to ~~shareholders.~~strengthen the balance sheet; provide funding for organic growth, research and development, and other capital priorities		Free Cash Flow - 2018 LTI Performance Shares (50% metric of performance-based LTI)
~~Our competitor peer group also includes Autoliv Inc.~~
Develop innovative technology, including electrification. Reinvest in research and ~~Magna International Inc.~~development.		Relative TSR - 2018 LTI Performance Shares (50% metric of performance-based LTI)

Create sustainable value for shareholders

Achieve profitable growth, along with the ability to be flexible as the market changes, and reduce leverage		EBITDA - 2018 Annual Incentive Program (100% metric)

Deliver integration synergies from recent acquisitions

Goal Rigor

The Committee annually reviews performance metrics, targets and payouts to ensure that they are challenging, stretch goals that are aligned with our strategy and long-range plan and are also designed to mitigate risk.

The incentive metrics selected by the Committee in 2018 focused on the importance of EBITDA performance for the annual incentive and free cash flow and relative TSR, weighted equally, for the LTI awards.

Significantly, the Committee increased the rigor of our annual and long-term compensation targets for awards granted in 2018. The impact of this ~~peer group~~goal rigor is reflected in the 2018 annual incentive award payout. Although AAM achieved record-setting adjusted EBITDA performance in 2018, our NEOs received a below-target payout based on ~~guidance from~~ the ~~Committee's independent~~stretch goals set by the Committee.

2018 Changes to Executive Compensation Programs

AAM is committed to engaging in constructive and meaningful communications with our shareholders. We received a favorable vote of 97% for our say-on-pay proposal in 2018. We believe this outcome reflects our responsiveness to shareholder feedback relating to executive compensation. More recently, our shareholders continued to express support of our overall executive compensation ~~consultant, Meridian Compensation Partners, LLC (Meridian). Our comparative peer group includes companies in automotive~~program and ~~related industries~~the alignment of our incentive compensation goals with ~~comparable (1) revenues (between one-third and three times our revenues), (2) complexity of global~~the Company's overall business and operations and (3) market capitalization. This group also includes companies that compete with AAM for executive talent and companies included in the proxy advisory firms' peer groups. AAM's projected revenues are at approximately the medianstrategy. In consideration of the ~~comparative peer group's projected revenues.~~feedback we continued to receive from our shareholders and prevailing market practices among our peers, we continued to refine our programs.


–	We increased the rigor of our annual and LTI compensation targets for awards granted in 2018 and continued this practice to drive management performance at the highest levels.

~~Compensation Benchmarking~~



Table of Contents	Compensation Discussion and Analysis

~~The Committee targets total direct compensation at approximately the 50~~^thpercentile of our comparative peer group. The Committee believes that this approach reflects a generally accepted benchmark of external competitiveness and supports our ability to attract and retain key executives.

–

In April 2018, AAM amended the Supplemental Executive Retirement Plan (SERP) and the Executive Deferred Compensation Plan to freeze further benefit accruals and freeze the plans to new participants. At the same time, and to further align our benefit programs with prevailing market practices, AAM adopted the Executive Retirement Savings Plan (ERSP) to become effective January 1, 2019. The ERSP, a deferred compensation plan, reduces executive retirement benefits and provides cost savings to the Company as compared to the legacy SERP, a defined benefit plan.

–

In April 2018, AAM adopted the Executive Officer Severance Plan (Severance Plan) in order to provide severance other than in a change in control to executive officers with the purpose of retaining our executives and allowing them to focus on our business strategy. In addition, AAM amended its employment agreements with Mr. Dauch and Mr. Simonte to align severance payable under their employment agreements with the Severance Plan.

Pay for Performance Alignment

Total direct compensation consists of base salary plus target annual and long-term incentive compensation. Total direct compensation for each NEO may be above or below the 50^thpercentile of our comparative peer group based on various factors, including an individual's level of responsibility, demonstrated skills and experience, significance of position, contribution to Company performance, time in position, potential for advancement and internal pay equity considerations. The Committee generally sets performance objectives for annual and long-term incentive compensation so that targeted total direct compensation levels can be achieved only when target performance objectives are met. Consequently, actual pay may vary from targeted levels based on achieved performance against pre-established performance objectives.

~~Tally Sheets~~

Annually, the Committee reviews compensation tally sheets for each executive officer, including the NEOs. The tally sheets, which are prepared by management, provide a summary of the current amounts of each component of pay and a history of prior long-term incentive grants. The tally sheets also show estimates of potential payments and benefits that could be realized under various hypothetical termination scenarios. The tally sheets consist of information that is substantially similar to the information shown for each NEO in ~~Potential Payments Upon Termination or Change in Control~~ ~~below. The Committee did not change the NEOs’ compensation based on its review of this information in 2015.~~

~~Table of Contents~~

~~Total NEO Total Direct Compensation Pay Mix~~

The following chart illustrates the allocation of ~~2015~~2018 total direct compensation components at target for our CEO and for our other NEOs (average) as a group as of December 31, ~~2015.~~2018. This analysis highlights the Company's emphasis on long-term and at-risk compensation.

~~Total NEO~~



Table of Contents	Compensation Discussion and Analysis

Compensation of Executive Officers

Executive Compensation Philosophy

~~For 2015,~~AAM is committed to a compensation philosophy that supports our business strategy and performance, aligns with stockholder interests, and pays competitively.



Supports Business Strategy	Market Competitive	Aligned with Shareholder Interests

– 86% of CEO compensation is variable and at risk – Rigorous performance goals as key drivers of enterprise value creation such as EBITDA, relative TSR and cash flow – Programs utilize metrics that emphasize company performance and are aligned with business strategy	– Attract and retain executive talent – Benchmark pay against a peer group of similarly sized companies – Target direct compensation at the 50^th percentile – Ensure incentive plans reward for desired behaviors and pay outcomes align with results	– Mix of annual and long-term incentive programs balances focus between short-term results and long-term share appreciation – 66% of LTI is performance-based – Cap on payout of performance shares based on relative TSR if absolute TSR is negative – CEO stock ownership requirement of 6 times base salary

The foundation of our philosophy is a best practice approach to compensation governance that includes a clawback policy, an anti-hedging policy, an annual risk assessment of compensation programs and practices, double-trigger equity vesting and severance provisions, and the ~~Committee set total direct compensation for Mr. Dauch and Mr. Simonte at approximately the 50~~^th~~percentile~~exclusion of ~~the peer group. At the time of Mr. May's appointment as CFO, the Committee set his total direct compensation below the 50~~^thpercentile, subject to further review in 2016. The levels of total direct compensation for Mr. Satine and Mr. Willemse were determined in consideration of internal pay equity based on their positions. Accordingly, total direct compensation was set below the 50^th~~percentile of the peer group for Mr. Satine and above the 50~~^th~~percentile for Mr. Willemse.~~excise tax gross-ups.

~~Table of Contents~~

Components of ~~the AAM~~ Compensation Program

The primary components of AAM’s executive compensation program ~~for 2015~~ are summarized ~~below:~~below.



Component	~~Key~~ Purpose	Characteristics
~~Purpose~~
Base Salary	* PartBased on level of ~~competitive total compensation package~~ * Determined based on market comparative positions andresponsibility, experience, individual performance ~~experience, time in position, professional development, contributions to the Company~~ and internal pay equity ~~considerations~~	* Provides base level ofFixed cash ~~compensation for attracting and retaining executive talent~~component generally targeted at the peer group median

Annual Incentive Compensation	* Determined based on pre-established financialIncentive to drive short-term performance ~~factors, including:~~ ~~- Net income as a %~~aligned with strategic goals	Cash award that is at-risk subject to the attainment of ~~sales (50%) and~~ ~~- Net operating cash flow (50%)~~ performance targets
	* Provides an opportunity to earn a cash-based annual incentive award * Aligns with financial performance * Target awards vary based on position and other factors
Long-Term Incentive Compensation	Incentive to drive long-term financial and strategic growth that creates shareholder value and supports retention of executives
Awarded in a combination of Performance Shares (66%)	* Performance Shares tie a substantial portion of total compensation to the Company's future achievement of pre-established performance goals over a three-year performance period, including: ~~- EBITDA (33%~~ and RSUs (34%) ~~- Relative TSR (33%)~~	* Aligns the interests of executive officers with those of shareholders by providing a mix of equity compensation tied to financial and share performance * Combined with the Company's vesting and stock ownership requirements, as well as a clawback feature, equity-based awards balance the goals of encouraging that drive sustainable results ~~over time~~ and ~~reward those results with appropriate levels of actual compensation~~ * Total target awards vary based on position and other factorsshareholder value
~~Restricted Stock Units (34%)~~	* Restricted Stock Units align awards with stock price performance and encourage executive retention with vesting after a three-year period
Retirement ~~Benefits~~ and Deferred Compensation	* Includes qualifiedProvide income upon retirement	401(k) and nonqualified defined benefit and ~~defined contribution plans, as well as a nonqualified retirement plan and~~ deferred compensation ~~plan~~plans
	* Provides income upon retirement including tax-deferred methods for general savings
Perquisites	* Primarily consists of the use of a Company-provided vehicle with AAM content	* Provides a limitedLimited supplement to total direct compensation	Primary benefit is company-provided vehicles with AAM content



Table of Contents	Compensation Discussion and Analysis

Decision-Making Process

Comprised solely of ~~Contents~~

~~Base Salary.~~independent, non-employee directors, the Compensation Committee oversees the compensation and benefits programs for our executive officers, including the NEOs. In ~~the fourth quarter~~its oversight of ~~each year,~~our 2018 executive compensation program, the Committee ~~reviews base salaries for executive~~worked with its independent compensation consultant, and with the CEO, the President, the CFO, and the Vice President, Human Resources. The CEO and the other officers provided information and recommendations with respect to:


–	Company performance objectives and goals, which serve as a basis for incentive compensation;


–	attracting, retaining and motivating executive officers;


–	information regarding financial performance, budgets and forecasts as they pertain to compensation; and


–	industry and market conditions affecting AAM's business strategy.

Based on the recommendation of the Committee, the Board exercises its judgment to approve the compensation for the ~~following calendar year. In determining 2015 base salaries for~~CEO. For all other executive officers, the Committee ~~reviewed benchmark data comparing~~considers the CEO's recommendation for setting compensation levels. The compensation approved for the CEO and other executives is aligned with the Company's overall compensation philosophy. For 2018, the Committee made pay ~~levels~~decisions based on a market analysis, Company performance and specific factors about each NEO, including individual performance, experience, internal equity, scope and responsibility of position, retention and other factors described in more detail below.

Role of the Compensation Consultant

The Committee has retained Meridian Compensation Partners LLC (Meridian) as its independent compensation consultant. Meridian provides the Committee with independent advice and ongoing recommendations on compensation matters related to our executive officers and non-employee directors. Meridian provides the Committee with ~~those~~competitive market data, peer group analyses and updates on compensation trends and regulatory developments. Meridian also worked with the Company in evaluating its incentive programs and the selection of ~~executives holding similar positions at companies~~performance measures in response to shareholder feedback.

In the course of fulfilling its responsibilities, Meridian frequently communicates with the Chair of the Committee both prior to and following Committee meetings. Meridian also meets with management to gather information, prepare materials and review proposals to be made to the Committee. Meridian provides no other services to the Company and has no other direct or indirect business relationships with AAM or any of its subsidiaries or affiliates. Based on information provided by Meridian, the Committee assessed Meridian's independence pursuant to NYSE and SEC rules and concluded that no conflict of interest exists that prevents Meridian from independently advising the Committee.



Table of Contents	Compensation Discussion and Analysis

Peer Group and Market Analysis

The Committee annually reviews the composition of our comparative peer ~~group.~~ group and makes adjustments to reflect changes in our business, as well as industry and market conditions. The overall purpose of this peer group is to provide a market frame of reference for evaluating our compensation arrangements, understanding compensation trends among comparable companies and reviewing other compensation and governance-related topics. The companies are selected primarily based on the following criteria:


–	total revenue and market capitalization;


–	competitors in industry segment;


–	complexity of global business and operations; and


–	competition for talent and investor capital.

The Committee ~~considered~~changed the ~~recommendations~~comparative peer group to benchmark executive 2018 and 2019 compensation. AAM's revenues are at approximately the median of ~~Mr. Dauch~~the comparative peer revenues. The comparative peer group from 2017 to 2019 is shown below.



2017 Peers		2017 to 2018 Changes		2018 Peers		2018 to 2019 Changes

Ametek Inc. Aptiv PLC BorgWarner Inc. Cooper-Standard Holdings Inc. Cummins Inc. Dana Incorporated Dover Corporation Federal-Mogul Corporation Flowserve Corporation Fluor Corp. Goodyear Tire & Rubber Company Lear Corporation Meritor, Inc. Illinois Tool Works Inc. Navistar International Corporation PACCAR Inc Parker-Hannifin Corporation Rockwell Automation Tenneco Inc. Terex Corporation Trinity Industries, Inc. Visteon Corporation		ADDITIONS		Ametek Inc. Aptiv PLC BorgWarner Inc. Cooper-Standard Holdings Inc. Cummins Inc. Dana Incorporated Dover Corporation Flowserve Corporation Fluor Corp. Goodyear Tire & Rubber Company Lear Corporation Meritor, Inc. Navistar International Corporation PACCAR Inc Parker-Hannifin Corporation Rockwell Automation Tenneco Inc. Terex Corporation Trinity Industries, Inc. Visteon Corporation		ADDITIONS
						More closely aligned with the size and complexity of our business, our industry and competition for talent Adient plc Cooper Tire & Rubber Company Delphi Technologies Oshkosh Corporation


	À	No additions for 2018	u		À
	À		u		À






		REMOVAL				REMOVAL
		Federal-Mogul Corporation - Acquired by Tenneco Illinois Tool Works Inc. - Removed due to size				No longer aligned with our size and business operations Ametek Inc. Cummins Inc. Dover Corporation Fluor Corp. PACCAR Inc.


	-		u		-
	-		u		-



Table of Contents	Compensation Discussion and Analysis

Direct Compensation Elements

Base Salary

In determining salary levels for each of our NEOs, the Committee considers factors such as financial and operational performance, leadership, development, time in ~~determining other NEO base salaries.~~position, internal equity and potential. The Committee ~~approved 2015~~also considers each NEO's current base salary as compared to the salary range and median salary practices of our peer group.

The Committee determined that base salaries for the CEO and the NEOs (other than Mr. May) would remain unchanged for 2018. The Committee decided to increase Mr. May's 2018 base salary in consideration of his pay level relative to the market median. NEO base salaries as ~~follows:~~of December 31, 2018 and 2017 are shown below.

Base Salary
2015 2014
David C. Dauch $ 1,150,000
$ 1,100,000
Christopher J. May (effective August 1, 2015) $ 350,000
NA
Michael K. Simonte (effective August 1, 2015) $ 640,000
$ 560,100
Alberto L. Satine (effective August 1, 2015) $ 510,000
$ 450,000
Norman Willemse (effective August 1, 2015) $ 450,000
$ 385,000
Terry J. Woychowski (through December 9, 2015) $ 463,500
$ 463,500



	2018		2017		% Change
David C. Dauch	$	1,150,000	$	1,150,000	—	%
Christopher J. May	$	550,000	$	500,000	10	%
Michael K. Simonte	$	750,000	$	750,000	—	%
Alberto L. Satine	$	610,000	$	610,000	—	%
Norman Willemse	$	530,000	$	530,000	—	%

The Committee determined that base salaries for the CEO and the NEOs (other than Mr. ~~Dauch's~~Willemse) will also remain unchanged for 2019. The Committee decided to increase Mr. Willemse's 2019 base salary ~~was adjusted~~ to ~~$1,150,000~~$575,000 effective January ~~1, 2015. The Committee approved this increase of 4.5%~~16, 2019 in consideration of the growth of the Metal Forming business unit as a result of the realignment of the Company's ~~financial performance and Mr. Dauch's leadership in strengthening AAM's management team and advancing product technology and innovation.~~

~~For Mr. May, the Committee determined his base salary upon his appointment as CFO on August 1, 2015. The Committee initially set Mr. May's salary below the 50~~^th percentile based on Mr. May being new to the CFO position. The Committee made this determination subject to further review in 2016. In connection with their new appointments, other NEOs received base salary increases as follows: Mr. Simonte, 11%; Mr. Satine, 10%; and Mr. Willemse, 10%. Mr. Simonte and Mr. Satine also received an annual merit increase of 3%, which is consistent with the budgeted amount for the merit program for U.S. salaried associates. Mr. Willemse also received a 6.5% increase, which reflects the annual merit increase and an adjustment for internal pay equity as discussed above.business units. The Summary Compensation Table shows the base salary earned in ~~2015~~2018 for each NEO.

Incentive Compensation

Annual Incentive Compensation.

Each NEO's annual incentive compensation is based on achieved results against ~~pre-established~~ financial targets approved by the Committee ~~and established~~ under ~~AAM’s~~the AAM Incentive Compensation ~~Plan~~Program for Executive Officers. Payment of annual cash incentive awards ~~are~~is permitted to the extent the Company meets or exceeds threshold performance ~~levels and reports positive net income.~~levels.

During shareholder outreach, shareholders expressed support of the Committee's efforts to align performance measures with our business strategy. The Committee ~~may make discretionary adjustments if it determines~~considered this feedback in selecting absolute EBITDA dollars as the sole metric for determining 2018 annual incentive payouts. Strong EBITDA performance positions AAM to generate cash, reduce debt and provide funding for profitable growth and other capital priorities. The selection of EBITDA dollars as the sole performance measure emphasizes its importance to our business strategy.

The Committee set the 2018 annual incentive EBITDA target at a level that drives management to continue to perform at a high level, achieve integration synergies, implement productivity improvements and successfully launch new product programs. Recognizing the ~~achievement~~importance of strong EBITDA performance, ~~targets for a plan year do not reflect~~ the ~~true performance~~Committee increased the rigor of the ~~Company due~~threshold, target and maximum performance levels. The performance levels for 2018 annual incentive awards reflect stretch goals that are designed to ~~unanticipated circumstances specified in the plan.~~reward growth and sustain profitability.


–	2018 target performance was set at a level significantly higher than 2017 actual adjusted EBITDA performance.


–	Achievement of target performance would result in the highest adjusted EBITDA performance in AAM history.


–	Target performance is higher than the performance of a majority of our competitor peer group companies.



Table of Contents	Compensation Discussion and Analysis

The ~~2015~~following table describes the performance levels and results for 2018.



	Weighting		Threshold (Payout 50%)	Target (Payout 100%)	Maximum (Payout 200%)	2018 Actual Performance	2018 Actual Payout %
Adjusted EBITDA	100	%	$956 million	$1,275 million	$1,466 million	$1,190.7⁽¹⁾	87%

(1) Excludes the impact of restructuring and acquisition-related net activity of $47.8 million, debt refinancing and redemption costs of $19.4 million and goodwill impairment of $485.5. AAM sold the Powertrain aftermarket business in April 2018. Previously, in February 2018, performance goals for our annual incentive ~~targets~~plan were established. As a result of this timing, full-year EBITDA associated with this business was included in the 2018 annual incentive target. An adjustment of $6.8 million has been included to reflect the portion of the year that has been excluded from actual EBITDA results. Considering the impact of this adjustment, actual adjusted EBITDA reflects EBITDA of this business through the closing date of April 4, 2018. Accordingly, adjusted EBITDA reported in our annual report on Form 10-K for ~~Mr. May, Mr. Simonte, Mr. Satine and Mr. Willemse were increased~~ the year ended December 31, 2018 was adjusted by this amount for purposes of calculating performance achievements under the annual incentive plan. See Non-GAAP Reconciliation in ~~connection with their appointments to new positions.~~ Appendix A.

Although 2018 actual adjusted EBITDA performance was a record-setting achievement for AAM, the stretch target previously set by the Committee was not achieved. As a result of this goal rigor, our NEOs received a below-target payout of 87%. In addition, the Committee made no discretionary increases in 2018 annual incentive payouts for any NEO. The amounts paid are shown in the Summary Compensation Table.

Target Annual Incentive Award Opportunities

The table below shows the ~~2015~~2018 target annual incentive opportunities for our NEOs, stated as a percentage of base ~~salary:~~

Target Annual Incentive Opportunity
2015 2014
David C. Dauch 125% 125%
Christopher J. May 54% NA
Michael K. Simonte 88% 80%
Alberto L. Satine 68% 60%
Norman Willemse 68% 60%
Terry J. Woychowski 60% 60%

~~Effective August 1, 2015,~~salary. In October 2017, the Committee determined that the annual incentive target ~~opportunity~~opportunities for ~~certain NEOs was increased as follows: Mr. May, from 50% to 60%; Mr. Simonte, from 80% to 100%; Mr. Satine and Mr. Willemse;~~ each ~~from 60% to 80%.~~

~~Table of Contents~~

~~2015 Annual Incentive Performance~~

In support of the Company’s 2015 goals and objectives, the Committee approved the use of net operating cash flow and net income as a percentage of sales (NIPS), each with equal weighting, as the performance metricsNEO would remain unchanged for ~~determining 2015 annual cash incentives. These performance metrics were selected for the following reasons:~~

~~net operating cash flow is an important financial metric for AAM due to its impact on liquidity, debt reduction and stockholder value creation;~~

~~increasing net operating cash flow is key to achieving credit rating upgrades, which has a favorable impact on the Company’s cost of future financing; and~~

~~net income is a key indicator of financial and operational performance.~~

Net operating cash flow is defined as net cash provided by or used in operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and from government grants.

In the fourth quarter of 2014, in conjunction with a review of the Board-approved annual budget, the Committee set 2015 performance targets for the net operating cash flow and NIPS performance metrics as follows:

2018.

Net Operating
Cash Flow

Net Income as a
Percentage of Sales
Performance Payout Performance Payout
Threshold $50 million 25% 1.5% 25%
Target $175 million 100% 4% 100%
Maximum $275 million 200% 6% 200%



	Target Annual Incentive Opportunity
	2018		2017
David C. Dauch	135	%	135	%
Christopher J. May	80	%	80	%
Michael K. Simonte	100	%	100	%
Alberto L. Satine	80	%	80	%
Norman Willemse	80	%	80	%

Budgeted net operating cash flow for 2015 was $175 million. Generating positive cash flow was a critical objective for 2015. Accordingly, the threshold performance level was set at $50 million. The target performance level for net operating cash flow was based on achieving the budget and the maximum performance level was based on outperforming budgeted cash flow by $100 million. The target and threshold performance levels for NIPS were determined based on our performance relative to our competitor peer group. The target performance level for NIPS, or 4%, was set at a level to meet the performance of the median net income of our competitor peer group for the three most recent fiscal years. The maximum award opportunity for NIPS was set at a level to meet the performance in the top one-third of our competitor peer group. Target performance levels are intended to be aggressive but achievable based on industry conditions.

The Company’s 2015 net operating cash flow was $189.5 million. Accordingly, the net operating cash flow metric resulted in the achievement of 114% of target payout. The Company’s 2015 NIPS was 6.05%, excluding the impact of debt redemption costs, net of tax, of approximately $0.5 million. Accordingly, the NIPS performance metric resulted in an achievement of 200% of target.

Based on the weighting of each performance metric, the 2015 annual incentive awards resulted in a payout of 157% of target. No discretionary adjustments were made to 2015 annual incentive payouts for any NEO. The annual incentive awards paid are shown in the ~~Summary Compensation Table~~.

~~2016 Amendment & Restatement of Annual Incentive Plan~~

In February 2016, the Committee approved the use of operating income margin as an additional performance measure for annual incentives awarded under the Annual Incentive Plan for Executive Officers. The Committee selected this additional performance measure based on a market analysis performed by Meridian that compared the performance metrics used by AAM under our annual incentive plan to the performance metrics used by companies in our comparative peer group and among a broader industry group. As a result, the Committee decided to maintain the existing performance measures and add operating income margin, a pre-tax earnings measure under the plan. Accordingly, the Second Amended & Restated AAM Annual Incentive Plan for Executive Officers was adopted effective January 1, 2016 and filed as Exhibit 10.38 to our annual report on Form 10-K for the fiscal year ended December 31, 2015.

~~Table of Contents~~

~~Long-Term Incentive Compensation.The table below shows the 2015 target long-term incentive opportunities for our NEOs:~~



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Meeting Information			Voting Information

Time and ~~Place~~	Date	8:00 a.m., local time, on Thursday, May ~~5, 2016~~2, 2019		Please vote your shares as soon as possible, even if you plan to attend the annual meeting.

Attend in Person	AAM World Headquarters Auditorium		Your broker will not be able to vote your shares on the election of directors and most of the other matters presented at the meeting unless you give your broker specific instructions to do so. We strongly encourage you to vote.
	One Dauch Drive
	Detroit, MI 48211
		~~AAM World Headquarters Auditorium, One Dauch Drive, Detroit, Michigan~~
Record Date	March 5, 2019		You may vote via the internet, by telephone, or by mail.

	You may vote if you owned shares on the record date.		See "Voting and Meeting Information" beginning on page 72 of this proxy statement for more information.



Voting Matters and Board Recommendations:		Votes Required	Board Vote Recommendation	More Information

Proposal 1	Election of three members of the Board of Directors to serve until the Annual Meeting of Stockholders in 2022	Majority of votes cast	FOR each nominee	Page 14
	Each nominee brings a strong and diverse background and set of skills to the Board and has demonstrated sound judgment and integrity.
Proposal 2	Advisory vote on named executive officer compensation	Majority of votes cast	FOR	Page 34
	AAM's executive compensation program is market-based, performance driven and aligns with shareholder interests.
Proposal 3	Ratification of the appointment of Deloitte & Touche LLP as independent public accounting firm for the year ending December 31, ~~2016;~~2019	Majority of votes cast	FOR	Page 69
	All independence standards have been met and sound practices are employed to ensure independent financial governance.



2018 AAM Highlights


	Delivered on our key strategic objectives of profitable growth, diversification, outstanding financial performance and technology leadership.			Record Annual Sales – Over $7 Billion for the first time in AAM History

~~Record Date~~	Strong cash flow generation and Over $200 Million insenior debt payments		~~You may vote if you were an~~	AAM ~~stockholder at the close of business on~~ ~~March 8, 2016.~~recognized as Fortune 500 Company

~~Meeting Admission~~		~~Admission may be limited to AAM stockholders as of the record date and holders of valid proxies. Please be prepared to present identification for admittance. Stockholders holding stock~~
	Formed joint venture with Liuzhou Wuling in ~~brokerage accounts will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date. Cameras and recording devices will not be permitted.~~China			Met key Integration Milestones, including Synergy Attainment

~~Proxy Materials~~
	QUANTUM^TM technology wins Altair and SAA Lightweighting Awards			5^th New Business Award for our EcoTrac^® Disconnecting AWDTechnology

	Sold Aftermarket divisionof our Powertrain business unit for $50 million			Named GM Supplier of the Year for 2^nd consecutive year



SEC 1913 (02-02)		Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.



	David C. Dauch ~~One Dauch Drive~~Chairman of the Board and ~~Detroit, Michigan 48211-1198~~ ~~www.aam.com~~Chief Executive Officer


–	Launched our first e-AAM electric driveline system into regular production


–	Met key integration milestones including synergy attainment on recent acquisitions


–	Continued to reduce our leverage by prepaying $200 million of Senior Notes


–	Won several new business awards, including our 5^thglobal EcoTrac^® disconnecting all-wheel-drive program


–	Named Supplier of the Year by General Motors for the second year in a row


–	Enhanced the experience, leadership and diversity of our Board with the appointments of Herbert K. Parker and Sandra E. Pierce in November 2018. These appointments were the result of active recruitment of women and minority candidates.


–	Formalized our commitment to Board diversity by adopting a policy that requires director searches to include qualified women and minorities in future candidate pools for nomination to our Board.


–	Strengthened the governance of our sustainability program by assigning oversight responsibility to the Nominating/Corporate Governance Committee by amending its charter. This level of oversight reflects the importance of our sustainability program to AAM's overall business strategy.


–	Continued to align the metrics and rigor of our incentive plans to drive achievement of AAM's business strategy.



Proxy Summary			Ratification of Independent Registered Public Accounting Firm
2	Proxy Summary		69	Proposal 3 - Ratification of Independent Registered Public Accounting Firm
			70	Policy for Pre-Approval of Audit and Non-Audit Services
Election of Directors			70	Independent Registered Public Accounting Firm's Fees
14	Proposal 1 - Election of Directors		71	Report of the Audit Committee
22	Corporate Governance
30	Compensation of Directors		Additional Information
32	Beneficial Stock Ownership		72	Voting and Meeting Information
33	Related Person Transactions Policy		74	Annual Report
33	Section 16(a) Beneficial Ownership Reporting Compliance		74	Electronic Delivery of Proxy Materials
			74	2020 Stockholder Proposals and Nominations
Advisory Vote on Executive Compensation			75	Cost of Solicitation
34	Proposal 2 - Advisory Vote on Executive Compensation
35	Compensation Discussion and Analysis
		Named Executive Officers	Appendix
		Executive Summary	A-1	Appendix A - Non-GAAP Reconciliation
		Compensation of Executive Officers	B-1	Appendix B - Director Independence Standards
		Direct Compensation Elements
		Indirect Compensation Elements
		Other Compensation Matters
50	Compensation Committee Report
51	Executive Compensation Tables
68	CEO Pay Ratio



Why we engage

Provide transparency into our business strategy, corporate governance practices and executive compensation programs	Determine which issues are important to our shareholders and communicate each others' views on those topics	Identify emerging issues that may impact our business and influence our practices



How we engage

Investor Communication Program		We provide institutional investors with many opportunities to give feedback to senior management by participating in conferences, one-on-one and group meetings, investor visits to our manufacturing facilities and technical centers, and day-to-day interactions with individual investors throughout the year. In June 2018, AAM hosted an Investor Day at the New York Stock Exchange where our CEO and senior management gave an update on our business and strategic plans.

Proactive Shareholder Outreach Program		As part of our annual shareholder outreach program, we also engage with shareholders in conference calls or meetings outside the proxy season. These exchanges, which we initiate, cover our executive compensation program, risk management, ESG, strategic planning and corporate governance practices. Soliciting shareholder feedback is a key component of this program, which we do at least annually. As appropriate, we also engage with shareholders during proxy season. Our Board members, CFO and Investor Relations Director participate in these outreach meetings.

Board Involvement		The Chair of our Compensation Committee has participated in certain shareholder meetings. Our CFO conveys shareholders' feedback to the full Board and the Compensation Committee or Nominating/Corporate Governance Committee, depending on the subject of the feedback. The Board also receives any feedback we obtain from proxy advisory firms, such as ISS and Glass Lewis, as part of our outreach program. The Board gives management feedback on key aspects of AAM's investor relations communication plan and shareholder outreach program.



Shareholder Engagement Topics

þ	Sustainability program	þ	Incentive compensation metrics and goal rigor

þ	Board diversity	þ	Selection process for Board candidates

þ	Board evaluation process	þ	Board oversight of risk

þ	Board refreshment	þ	Separation of Chairman and CEO roles

þ	Shareholder rights	þ	Classified Board


–	Increased the transparency of our sustainability program by continuing to improve the disclosure of ESG matters in our annual report to shareholders, corporate website and proxy statement. These efforts will continue on a longer-term basis as part of the sustainability journey, which is integral to our overall business strategy.


–	Community Involvement: AAM and our associates have a long tradition of supporting the communities in which we live and work. We continued to have a positive impact during 2018 through a wide variety of corporate initiatives and individual activities.


–	In Mexico, the Richard E. Dauch Education and Development Institute opened next to AAM's Guanajuato Manufacturing Complex. A joint initiative between AAM and the local government, the Institute will train current and future AAM associates with the latest technology and manufacturing


–	We continued our work with charitable organizations committed to supporting local families, youth outreach, education, wellness and social equality, which include the Boy Scouts of America, the United Way, the Boys and Girls Clubs of Southeastern Michigan and St. Jude Children's Hospital.


–	Board and Committee Oversight: In 2019, the Charter of the Nominating/Corporate Governance Committee was expanded to include oversight of our sustainability policies, programs and reporting. This level of oversight reflects the importance of our sustainability program to AAM's long-term business strategy and objectives.


–	AAM's 2018 say-on-pay proposal received a favorable vote of 97% of votes cast. To gain this level of support, we engaged with our shareholders and implemented changes in response to their feedback.


–	We increased the ~~May 5, 2016 Stockholder Meeting: The~~rigor of our annual and long-term incentive compensation targets for awards granted in 2018 and continued this practice to drive management performance at the highest levels.



Strategic Business Objective	Alignment	Incentive Metric

Continue to strengthen the balance sheet; provide funding for organic growth, research and development, and other capital priorities	~~INTERNET AVAILABILITY OF PROXY MATERIALS~~	2Free Cash Flow - 2018 LTI Performance Shares (50% metric of performance-based LTI)

~~QUESTIONS AND ANSWERS ABOUT VOTING AND THE ANNUAL MEETING~~ Develop innovative technology, including electrification. Reinvest in research and development		2Relative TSR - 2018 LTI Performance Shares (50% metric of performance-based LTI)

Create sustainable value for shareholders

~~PROPOSAL 1: ELECTION OF DIRECTORS~~ Achieve profitable growth, along with the ability to be flexible as the market changes, and reduce leverage		4EBITDA - 2018 Annual Incentive Program (100% metric)

Deliver integration synergies from recent acquisitions


–	Target performance was set at a level significantly higher than 2017 actual adjusted EBITDA performance.


–	Free cash flow target performance for 2018 - 2020 was set at a level higher than the previous three years' performance.


–	Relative TSR payout is capped if absolute TSR is negative.


~~Corporate Governance~~	10
Governance Point
Payout capped if 3-year absolute TSR is negative.

~~COMPENSATION OF EXECUTIVE OFFICERS~~			16
~~Compensation Discussion and Analysis~~	16
~~Summary Compensation Table~~ Actual Performance	29
~~Grants of Plan-Based Awards~~ Average Adjusted EBITDA Performance from 2013 - 2015	31
~~Outstanding Equity Awards at December 31, 201~~5	34
~~Options Exercised and Stock Vested~~	35
~~Pension Benefits~~	36
~~Nonqualified Deferred Compensation~~	38
~~Potential Payments Upon Termination or Change of Control~~	40 13.9%

~~PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION~~Peer Average Adjusted EBITDA Performance from 2013 - 2015	46	10.7%



~~SECURITY OWNERSHIP~~Table of Contents	Election of Directors


~~Section 16(a) Beneficial Ownership Reporting Compliance~~	50

~~PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016~~	51

~~AUDIT COMMITTEE DISCLOSURE~~	51
~~Report~~Proposal 1: Election of ~~the Audit Committee~~	51
~~Policy for Pre-Approval of Audit and Non-Audit Services~~	52
~~Fees of Independent Public Accountants~~	52

~~OTHER MATTERS~~	53
	Directors

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