Fannie Mae 2005 Annual Report Download - page 222

Share Program and participation in our elective deferred compensation plan. For the three-year performance
cycle completed in 2003, it was determined in January 2004 that she was entitled to receive 5,730 shares, of
which she received 2,865 shares in accordance with the program, with the balance scheduled to be received in
January 2005. Our Board of Directors and Compensation Committee determined in February 2007 not to pay
any unpaid performance shares for the performance share cycles completed in 2003 and 2004, as a result of
which the balance of these shares will not be issued to Ms. Senhauser. The Housing and Community
Development division does not report, nor has it ever reported, to Mr. Senhauser. Mr. and Ms. Senhauser
recuse themselves from any matters that may directly and significantly affect the other, including matters that
may affect each other’s compensation and evaluation.
Charitable Contributions
We encourage our employees to volunteer their time to charitable organizations and actively support these
volunteer activities. Our charitable activities generally focus on creating affordable homeownership and
housing opportunities nationally and improving the quality of life for people of our hometown, Washing-
ton, D.C., through partnerships and initiatives and by funding and promoting research and education on
housing-related issues. In February 2007, we announced the consolidation of our philanthropic initiatives into
a new Office of Community and Charitable Giving.
In connection with our creation of the Office of Community and Charitable Giving, the Fannie Mae
Foundation ceased its day-to-day operations in April 2007. We have been the sole provider of support for the
Fannie Mae Foundation. In 2006, we made a contribution to the Foundation of $26.5 million. We have also
agreed to provide funding if necessary to cover certain expenses relating to the winding down of the
Foundation’s operations, as well as other forms of support, including the services of Fannie Mae employees, to
support the Foundation’s orderly wind-down and termination and to support certain Foundation programs after
April 2007. Our President and CEO, Daniel Mudd, is the Chairman of the Board of the Foundation. In
addition, the Board of Directors of the Foundation includes four additional members who are current officers
of Fannie Mae and two members who are former officers of Fannie Mae. Directors of the Foundation who are
current Fannie Mae employees do not receive any additional compensation for serving on the Foundation’s
Board of Directors.
Under its Matching Gifts Program, the Fannie Mae Foundation matches gifts made by employees to 501(c)(3)
public charities, up to an aggregate total of $10,000 per employee in any calendar year, including up to $500
which may be matched on a 2-for-1 basis. Directors and executive officers are eligible to participate in this
matching program on the same terms as our other employees. This program will continue through 2007.
Fannie Mae may undertake a matching gift program in 2008.
The Fannie Mae Foundation made charitable contributions to the University of Pennsylvania of $91,667 in
2005 and $20,000 in 2007 to support training for mid-career professionals in real estate financing and to
support research on housing and housing policy. Mr. Gerrity, a former director of Fannie Mae, is a professor at
the University of Pennsylvania. Mr. Gerrity had no involvement in the Foundation’s grant-making decision.
Item 14. Principal Accounting Fees and Services
The Audit Committee of our Board of Directors is directly responsible for the appointment, oversight and
evaluation of our independent registered public accounting firm. In accordance with the Audit Committee’s charter,
it must approve, in advance of the service, all audit and permissible non-audit services to be provided by our
independent registered public accounting firm and establish policies and procedures for the engagement of the
outside auditor to provide audit and permissible non-audit services. Our independent registered public accounting
firm may not be retained to perform non-audit services specified in Section 10A(g) of the Exchange Act.
The Audit Committee appointed Deloitte & Touche LLP as our independent registered public accounting firm in
January 2005. The Audit Committee dismissed KPMG LLP as our independent registered public accounting firm
in December 2004, after concluding that Fannie Mae’s previously filed interim and audited financial statements
and the independent auditor’s reports thereon for the periods from January 2001 through the second quarter of
2004 should no longer be relied upon because such financial statements were prepared applying accounting
practices that did not comply with generally accepted accounting principles. Accordingly, we were required to
217