Fannie Mae 2008 Annual Report Download - page 260

No amounts are included for a furnished apartment we leased near our corporate offices in Washington, DC for use by
Mr. Ashley, the former non-executive Chairman of our Board, when he was in town on company business. Provided
that he reimbursed us, Mr. Ashley was permitted to use the apartment up to twelve nights per year when he was in
town but not on company business.
Post-Conservatorship Compensation Arrangements for our Non-Management Directors
From October 1 to December 18, 2008, our directors were not paid for their services. As discussed above in
“Corporate Governance — Conservatorship and Delegation of Authority to Board of Directors,” from the time
the conservatorship commenced until December 19, 2008, our directors had no power or duty to manage,
direct or oversee the business and affairs of Fannie Mae. Since December 19, 2008, our non-management
directors have been paid a retainer at an annual rate of $160,000, with no meeting fees. Committee chairs and
Audit Committee members receive an additional retainer at an annual rate of $25,000 for the Audit Committee
chair, $15,000 for the Risk Policy and Capital Committee chair and $10,000 for all other committee chairs and
each member of the Audit Committee. All payments are in cash, not stock. In recognition of the substantial
amount of time and effort necessary to fulfill the duties of non-executive Chairman of the Board, the annual
retainer for our non-executive Chairman, Mr. Laskawy, is $290,000.
Pre-Conservatorship Compensation Arrangements for our Non-Management Directors
Cash Compensation. During the first nine months of 2008, our non-management directors, with the
exception of the non-executive Chairman of our Board, were paid a retainer at an annual rate of $100,000,
with no meeting fees. Committee chairs received an additional retainer at an annual rate of $25,000 for the
Audit Committee chair and $15,000 for all other committee chairs. The annual retainer for our non-executive
Chairman of the Board, Mr. Ashley, was $500,000.
Restricted Stock Awards. Under the Fannie Mae Stock Compensation Plan of 2003, each non-management
director received an annual grant of restricted stock units immediately following the annual meeting of
shareholders in 2008. The aggregate fair market value on the date of grant in 2008 equaled $135,000. A non-
management director who was newly appointed or elected after an annual meeting of shareholders was to
receive a pro-rated grant of restricted stock units. Restricted stock units, which received dividend equivalent
payments to the same extent as our common stock, generally may not be sold, transferred or encumbered. The
restricted stock units were scheduled to vest in full on the day before the next annual meeting of shareholders,
but in no event later than one year after the grant. Unvested restricted stock units are subject to forfeiture if a
director ceases to be a director for any reason other than death or disability. As discussed above, all future
director compensation is to be in cash.
One-Time Supplemental Cash Retainer. In January 2008, the Board awarded our non-management directors,
including Mr. Ashley, a one-time supplemental cash retainer in the amount of $56,250 in consideration of the
transition to our new director compensation program for the period from January to May 2008. The amount of
the one-time supplemental cash retainer was meant to be equivalent to the pro rata value of restricted stock
units that would have vested under the new compensation program between January 2008 and May 2008 if an
equity grant had been made under the program in January 2008. The Board’s independent compensation
consultant concurred that the award was reasonable and appropriate.
Deferred Compensation. Prior to the recent changes to our director compensation arrangements, non-
management directors could irrevocably elect to defer up to 100% of their annual retainer and all fees payable
to them in their capacity as a member of the Board in any calendar year into our deferred compensation plan.
Plan participants receive an investment return on the deferred funds as if the funds were invested in a
hypothetical portfolio chosen by the participant from among the available investment options, which are
described in more detail above under “Nonqualified Deferred Compensation — Elective Deferred
Compensation Plans.” Plan participants elected to receive the deferred funds either (1) in a lump sum, (2) in
approximately equal annual installments or (3) in an initial payment followed by approximately equal annual
installments, with a maximum of 15 installments. Deferral elections generally must have been made prior to
the year in which the compensation otherwise would have been paid, and payments will be made as specified
in the deferral election. Participants in the plan are unsecured creditors and are paid from our general assets.
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