Freddie Mac 2015 Annual Report Download - page 374

Executive Compensation Compensation and Risk
Freddie Mac 2015 Form 10-K 372
COMPENSATION AND RISK
Our management conducted an assessment of our compensation policies and practices that were in
place during 2015 and that were applicable to employees at all levels, including those participating in the
2015 EMCP. The purpose of the assessment was to determine whether any elements of the overall
compensation program encourage inappropriate or excessive risk taking by employees in the
achievement of stated corporate objectives or pursuit of individual compensation targets. The assessment
was conducted by members of our ERM and human resources teams.
The review included an evaluation of:
• The types of compensation offered (including fixed, variable, and deferred);
• Eligibility for participation in compensation programs;
• Minimum and maximum payout levels;
• Corporate performance objectives;
• The process for establishing corporate performance objectives and for evaluating performance
against those objectives; and
• Processes and program approvals for our compensation programs.
The assessment was discussed with the Compensation Committee in December 2015. Management’s
conclusion, with which the Compensation Committee concurred, is that Freddie Mac has taken
appropriate and reasonable efforts to help ensure that our compensation policies and practices do not
encourage employees to take unnecessary and excessive risks to meet our corporate objectives, and our
current compensation policies and practices are not reasonably likely to have a material adverse effect on
us.