Freddie Mac 2014 Annual Report Download - page 258

253 Freddie Mac
Bill rate in effect on the last business day immediately preceding the year in which the Deferred Salary is earned, and is paid at
the same time as the Deferred Salary to which it relates.
See “Other Executive Compensation Considerations — Effect of Termination of Employment” for information on the
effect of a termination of employment, including the timing and payment of any unpaid portion of Deferred Salary and related
interest.
Performance Measures for the Performance-Based Elements of Compensation
The performance measures for At-Risk Deferred Salary, together with a description of the assessment of actual
performance against such measures, are presented below in “Determination of Actual 2014 Compensation — At-Risk Deferred
Salary Based on Conservatorship Scorecard Performance” and “— At-Risk Deferred Salary Based on Corporate Scorecard
Goals and Individual Performance.” These performance measures were chosen because they reflected our 2014 priorities
during conservatorship.
Determination of 2014 Target TDC for NEOs
Role of Compensation Consultants
As part of the annual process to determine the Target TDC for each of the NEOs, other than Mr. Layton, whose
compensation is fixed as described in “— Chief Executive Officer Compensation,” the Compensation Committee receives
guidance from Meridian Compensation Partners, LLC (Meridian), its independent compensation consultant. In addition to the
annual process to determine Target TDC, Meridian provides guidance to the Compensation Committee during the course of the
year on other executive compensation matters.
Meridian has not provided the Compensation Committee with any non-executive compensation services, nor has the firm
provided any consulting services to our management. During 2014, the Compensation Committee reviewed Meridian's
independence based on the factors outlined in Rule 10C-1(b)(4) under the Exchange Act and determined that Meridian
continues to be independent.
2014 Comparator Group Companies
The Compensation Committee annually evaluates each NEO’s Target TDC in relation to the compensation of executives
in comparable positions at companies that are either in a similar line of business or are otherwise comparable for purposes of
recruiting and retaining individuals with the requisite skills and capabilities. We refer to this group of companies as the
Comparator Group.
When there is either no reasonable match or insufficient data from the Comparator Group for a position, or if Meridian
believes that additional data sources would strengthen the analysis of competitive market compensation levels, the
Compensation Committee may use alternative survey sources.
At FHFA's recommendation, Freddie Mac and Fannie Mae have aligned their Comparator Groups so that consistent
compensation data is used by both companies for the same or similar senior officer positions.
The Comparator Group used to determine compensation for 2014 consisted of the following companies:
Allstate Fannie Mae PNC
Ally Financial Fifth Third Bancorp Prudential
AIG Freddie Mac Regions Financial
Bank of America* The Hartford State Street
Bank of New York Mellon JPMorgan Chase* SunTrust
BB&T MetLife U.S. Bancorp
Capital One Northern Trust Wells Fargo*
Citigroup*
* Only mortgage or real estate division-level compensation data from these diversified banking firms may be utilized where available and appropriate for
the position being benchmarked.
The Compensation Committee has determined, in consultation with FHFA and Fannie Mae, that these same companies,
with one exception, will comprise the Comparator Group used to determine compensation for 2015. To avoid benchmarking
our NEOs' compensation against our own data, Freddie Mac has been removed from the 2015 Comparator Group.
Establishing Target TDC
The Compensation Committee developed its 2014 Target TDC recommendations for the NEOs other than Mr. Layton by
reviewing data from the Comparator Group and, as appropriate, alternative survey sources. For Messrs. Lowman, Mackey and
McDavid, the Compensation Committee reviewed competitive market data solely from the Comparator Group. For Mr. Weiss,
our EVP-Chief Administrative Officer, no reasonable match was available in either the Comparator Group or one of the
alternative survey sources due to the unique nature of his responsibilities. As a result, the compensation level for his role was
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