Fannie Mae 2009 Annual Report Download - page 216

data used consisted of publically available proxy data relating to the comparator group identified below.
Management and the Compensation Committee considered these benchmark data, the criticality of positions
within the company and the key skills required for each role to make recommendations on the compensation
levels for each named executive to FHFA. FHFA, in consultation with Treasury, reviewed the recommended
compensation levels and gave direction to management and the Compensation Committee on the final target
total compensation levels for each named executive.
Benchmark data from the comparator group identified below was not used in developing the overall structure
of our 2009 executive compensation program, in terms of the elements of compensation and the relative
distribution of compensation among the various elements. As discussed above, the structure of our
compensation program was developed based on elements of the compensation structure approved by
Treasury’s Special Master for TARP Executive Compensation for companies receiving exceptional TARP
assistance.
What comparator group did we use for benchmarking and how did we select this group?
In 2009, the Compensation Committee selected a new comparator group of 18 companies for benchmarking
named executive compensation. The companies in the comparator group are:
• Allstate Corporation • Fifth Third Bancorp • Principal Financial Group
• American International Group • Genworth Financial, Inc. • Prudential Financial, Inc.
• Bank of New York Mellon
Corporation
• GMAC LLC • Regions Financial Corporation
• BB&T Corporation • Hartford Financial Services Group • State Street Corporation
• Capital One Financial Corporation • Lincoln National Corporation • SunTrust Banks Inc.
• Freddie Mac • Metlife, Inc. • US Bancorp.
Management requested that McLagan review our existing comparator group and recommend appropriate
changes. Based on its review and with input from management, McLagan recommended the new comparator
group identified above. The Compensation Committee, with input from FW Cook, then reviewed and approved
the composition of the new comparator group. Factors relevant to the selection of this comparator group
included their status as U.S. public companies, the industry in which they operate (each is a commercial bank,
public insurance company or government-sponsored enterprise) and their size (in terms of total assets,
revenues and headcount) relative to the size of Fannie Mae. Because we are a government-sponsored
enterprise with a unique business, structure and mission, the only directly comparable firm to us is Freddie
Mac. Our total assets are substantially larger than the median of the comparator group and our net revenues
are also larger than the median of the comparator group; however, our headcount is substantially smaller than
the median of the comparator group and in many cases our operations are less diverse.
What elements of corporate performance and other factors did the Compensation Committee and the Board
consider in making compensation decisions relating to the 2009 long-term incentive awards and 2008
Retention Program awards?
The Compensation Committee and the Board of Directors evaluated the company’s performance against its
2009 corporate performance goals and related objectives to determine the funding of the pool for 2009 long-
term incentive awards for the named executives and the amounts of the final performance-based portion of the
2008 Retention Program awards for the applicable named executives.
Fannie Mae had three overall corporate performance goals for 2009, with related objectives designed to
achieve each of these overall goals. Management and the Board of Directors, in consultation with FHFA,
selected these corporate performance goals and objectives to carry out the company’s mission and current
business objectives. See “Business—Executive Summary” for a description of our mission and current
business objectives. The Compensation Committee did not give more weight to one goal than any other goal.
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