Freddie Mac 2010 Annual Report Download - page 333

approximately $860,000. The aggregate amount actually paid may be either higher or lower based on Ally’s value.
Payments are scheduled to be made in cash semi-monthly and will continue through March 2015.
• Mr. Renzi also had outstanding RSUs when he left his employment. The RSUs vested on December 31, 2010 with a
value at vesting of approximately $46,478. The vesting of the RSUs was based solely on the passage of time and was
not related to any performance metric relating to Mr. Renzi, Freddie Mac or Ally.
In order to eliminate any potential conflict of interest, Mr. Renzi, in his capacity as an employee of Freddie Mac, has
been, and will continue to be, recused from any transactions with or decisions relating to Ally or its affiliates through such
time that he has received his last payment from Ally and its affiliates. Specifically, Mr. Renzi has been recused from serving
as the final decision-maker, and from influencing final decisions, relating to: (a) any and all aspects of Freddie Mac’s
relationship with Ally or its affiliates pertaining to both performing and non-performing loan servicing; (b) any other
business transactions with Ally or its affiliates or their status as a counterparty with us; or (c) reviews of Ally or its affiliates
by our MHA — Compliance function under the Financial Agency Agreement with Treasury.
Mr. Renzi’s relationship with Ally and its affiliates was not required to be reviewed, approved or ratified under our
Related Person Transactions Policy because Mr. Renzi, in his capacity as an employee, is recused from any involvement in
transactions with or decisions relating to Ally and its affiliates for the period that he is receiving payments on unpaid stock
units. For this reason, Mr. Renzi does not have a material interest in our relationship with Ally or its affiliates.
Conservatorship Agreements
Treasury, FHFA, and the Board of Governors of the Federal Reserve System have taken a number of actions to support
us during conservatorship, including entering into the Purchase Agreement, described in this Form 10-K. See “NOTE 3:
CONSERVATORSHIP AND RELATED MATTERS — Purchase Agreement” and “NOTE 3: CONSERVATORSHIP AND
RELATED MATTERS — Government Support for our Business,” “NOTE 3: CONSERVATORSHIP AND RELATED
MATTERS — Related Parties as a Result of Conservatorship.”
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Description of Fees
The following is a description of fees billed to us by PricewaterhouseCoopers LLP, our independent public accountants,
during 2010 and 2009.
Table 89 — Auditor Fees
(1)
2010 2009
Audit Fees
(2)
...................................................................... $29,484,646 $42,913,079
Audit-Related Fees
(3)
................................................................. 18,000 18,000
Tax Fees
(4)
........................................................................ 3,050,000 4,295,000
All Other Fees
(5)
.................................................................... 148,805 —
Total . . . . . . . . . . . ................................................................. $32,701,451 $47,226,079
(1) These fees represent amounts billed within the designated year and include reimbursable expenses of $436,051 and $1,295,736 for 2010 and 2009,
respectively.
(2) Audit fees include fees and expenses billed by PricewaterhouseCoopers in connection with the SAS 100 quarterly reviews of our interim financial
information and the audit of our annual consolidated financial statements. The audit fees billed during 2010 include fees and expenses related to the
2009 ($8,839,260) and 2010 ($20,645,386) audits. In addition to the amounts shown above, approximately $8.1 million of fees and reimbursable
expenses will be billed in 2011 for the 2010 audit. The audit fees billed during 2009 include fees and expenses related to the 2008 ($14,318,278) and
2009 ($28,594,801) audits. Audit fees of $95,542 and $81,300 in 2010 and 2009, respectively, related to the Freddie Mac Foundation are excluded
because these fees are incurred and paid separately by the Freddie Mac Foundation.
(3) The 2010 and 2009 audit-related fees resulted from our Comperio subscription ($18,000) renewals.
(4) Tax fees in 2010 include fees for providing non-audit tax compliance services relating to the preparation of 2009 tax returns, preparation of quarterly
estimated tax calculations and other services relating to improving Freddie Mac’s annual tax compliance process ($3,000,000), as well as process
documentation services and tax accounting method change services ($50,000). The tax fees billed in 2009 covered services related to the preparation of
2008 tax returns, preparation of quarterly estimated tax calculations and other services related to improving Freddie Mac’s annual tax compliance
process ($3,500,000), as well as process documentation services and tax accounting method change services ($295,000). Additionally, $500,000 of the
2010 tax fees were billed in 2009 upon execution of the non-audit tax compliance services engagement letter.
(5) All other fees for 2010 ($148,805) resulted from fees and expenses billed by PricewaterhouseCoopers for the performance of advisory services related to
management’s reorganization of our Finance Division.
Approval of Independent Auditor Services and Fees
As provided in its charter, the Audit Committee appoints, subject to FHFA approval, our independent public accounting
firm and reviews the scope of the annual audit and pre-approves, subject (as required) to FHFA approval, all audit and non-
audit services permitted under applicable law to be performed by the independent public accounting firm.
The Sarbanes-Oxley Act and related rules adopted by the SEC require that all services provided to companies subject to
the reporting requirements of the Exchange Act by their independent auditors be pre-approved by their audit committee or by
authorized members of the committee, with certain exceptions. The Audit Committee’s charter requires that the Audit
330 Freddie Mac