Fannie Mae 2006 Annual Report Download - page 192

Employee Benefits.
Our employee benefits are a fundamental part of our compensation program and serve as an important tool in
recruiting and retaining executives.
•Pension Benefits. Our named executives participate in our Executive Pension Plan. This plan is a non-
qualified, defined benefit plan that supplements the pension benefits payable to the named executive under
our tax-qualified pension plan, which is the “Retirement Plan” discussed below under “Pension
Benefits—Fannie Mae Retirement Plan.” The annual pension benefit (when combined with our Retirement
Plan) for our executive vice presidents equals 40%, and for our chief executive officer equals 50%, of the
executive’s highest average covered compensation earned during any 36 consecutive months within the
last 120 months of employment. Covered compensation under the plan is limited to 150% of base salary
for our executive vice presidents and 200% of base salary for our chief executive officer.
A named executive is not entitled to receive a pension benefit under the Executive Pension Plan until the
executive has completed five years of service as a plan participant, at which point the pension benefit
becomes 50% vested and continues vesting at the rate of 10% per year during the next five years. We
consider the Executive Pension Plan an important component of our executives’ total compensation and
believe requiring ten years of service as a participant before full vesting serves as a significant retention
tool. Our Executive Pension Plan is discussed in more detail below under “Pension Benefits.”
•Other Employee Benefits and Plans. In general, named executives are eligible for the employee benefits
available to our employee population as a whole, including our medical insurance plans, our 401(k) plan,
and our matching gifts program. Named executives also are eligible to participate in programs we make
available only to management employees at varying levels, including our elective deferred compensation
plan.
•Severance benefits. Our chief executive officer and our chief business officer are entitled to receive
severance benefits under agreements we entered into with them. During 2006, our named executives other
than Mr. Mudd were eligible to receive severance benefits under certain circumstances pursuant to a
severance program no longer available to them. See “Potential Payments Upon Termination or
Change-in-Control.”
Perquisites.
In 2006, we provided our named executives relatively limited perquisites not available to our general
employee population, based primarily on business needs. We also provided perquisites to the extent
appropriate and reasonable for retaining and attracting executives. These perquisites, and recent changes we
have made to eliminate or require reimbursement of certain perquisites, are discussed below under “How and
why have we changed our policy on perquisites?”
How do we look at total compensation for 2006?
The following chart shows information about the salary, bonuses, and long-term incentive awards that were
paid or granted for 2006.
Compensation Paid or Granted for 2006
Named Executive
(1)
Base Salary as
of 12/31/06
2006 Bonus
(Paid in 2007)
2006 Long-Term
Incentive Award
(Granted in 2007)
(2)
Total of Base Salary,
Bonus, Long-Term
Incentive Award
Daniel Mudd . . . . . . . . . . . . . . . . . . . . . . $950,000 $3,500,000 $9,999,947 $14,449,947
Robert Blakely . . . . . . . . . . . . . . . . . . . . . 650,000 1,290,575 3,299,361 5,239,936
Robert Levin . . . . . . . . . . . . . . . . . . . . . . 750,000 2,087,250 6,667,104 9,504,354
Peter Niculescu . . . . . . . . . . . . . . . . . . . . . 539,977 1,029,060 2,839,945 4,408,982
Beth Wilkinson . . . . . . . . . . . . . . . . . . . . . 575,000 1,947,988
(3)
2,770,316 5,293,304
Michael Williams . . . . . . . . . . . . . . . . . . . 650,000 1,630,200 5,247,443 7,527,643
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