Freddie Mac 2015 Annual Report Download - page 365

Executive Compensation Compensation Discussion and Analysis
Freddie Mac 2015 Form 10-K 363
The Board has adopted Corporate Scorecard goals for 2016 that are substantially similar to the 2015
goals.
The table below presents the Corporate Scorecard goals and the Compensation Committee’s
assessment of our achievement against those goals.
Corporate Scorecard Goal Assessment of Performance
People All elements of this goal were achieved or exceeded. We continued to build
our desired culture, as indicated by employee survey results. We exceeded
the target for retention of high-performing employees and continued to take
steps to improve leadership diversity.
Maximize the contributions of our people
Our Customers All elements of this goal were achieved or exceeded. In our single-family
business, we increased our share of the GSE market, with a large share of
new business being provided by a more diversified customer base. In our
multifamily business, we exceeded the targeted increase in the number of
small balance loan sellers. In addition, the quality of our service has
improved, as indicated by both our single-family and multifamily customer
satisfaction scores.
Strive to achieve industry-leading customer
experience levels
Mission At this time, based on preliminary information, we believe we met three of our
single-family goals and our three multifamily goals for 2015, but believe we
failed to meet the FHFA benchmark level for the other single-family goals.
We also achieved or exceeded the elements of this goal that included
establishing a new function focused on single-family affordable housing and
access to credit, developing one or more new offerings to better serve the
multifamily renovation, rehabilitation and repositioning markets, and achieving
a measure of the efficiency of our single-family loan modifications and
repayment plans.
Help people own, rent and stay in their homes
Financial Performance We exceeded the objectives for the elements of this goal related to single-
family new book earnings, single-family credit risk transfer, developing
additional types of multifamily risk transfer transactions, and actively
managing the assets in the retained portfolio. However, for two elements of
this goal - multifamily operating earnings and core operating expenses - we
fell short of our objectives. Widening K-Deal spreads caused multifamily
operating earnings to be less than planned and increased investments in
business technology caused operating expenses to be higher than
anticipated.
Improve our capital and expense efficiency as
well as our core financial performance
Risk Management We achieved or exceeded the elements of this goal related to establishing
and reinforcing ownership for various risks, making informed risk-reward
decisions and reducing exposure to legacy assets. With respect to the
element related to maintaining an effective control environment, we achieved
one of the two goals, but did not achieve the desired increase in internal audit
findings identified by management.
Risk management will be at best-practice levels
Technology & Infrastructure We achieved or exceeded all elements of this goal by:
Utilize technology and infrastructure to prepare
for a future competitive market Delivering most key technology initiatives on or ahead of schedule and
on or below budget and realizing the intended quantitative benefits from
most discretionary projects;
Continuing to improve our information security as measured by an
industry rating standard and by completing the encryption, retirement, or
removal of protected personal information in 23 legacy systems; and
Ensuring the availability of key applications.
Execution While we exceeded the desired improvement in managerial spans of control
and stakeholder feedback on the company’s level of innovation, we fell short
of achieving two elements of this goal; one related to reducing the number of
senior staff without managerial responsibilities and another on employee
survey feedback on the company’s efforts to be more efficient.
Do everything better, faster, and more efficiently
The Compensation Committee also assessed the individual performance of each NEO. In making its
assessments, the Committee received input from the full Board on Mr. Layton’s performance, and took
into consideration the company’s performance against the Corporate Scorecard. For the other NEOs, the
Committee received input from Mr. Layton. In each case, the Compensation Committee’s determination
was consistent with Mr. Layton’s recommendation. FHFA reviewed and approved these determinations.
Each NEO’s individual performance is discussed below.