Fannie Mae 2012 Annual Report Download - page 196

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second installment of the 2011 long-term incentive awards for executive officers would be funded at 95% of target. The
Board of Directors and FHFA approved the Compensation Committee’s determination.
The table below presents our 2012 corporate performance goals and related metrics for purposes of determining the second
installment of the 2011 long-term incentive award, and management’s assessment of our achievement against these goals and
metrics. A summary of the Compensation Committee’s assessment of the company’s performance against these goals and
metrics is provided following the table.
Goals Metrics Performance Against Goal/Metric
Goal 1: Achieve cost savings
consistent with the financial
plan.
Limit core administrative expenses for 2012
to no more than $1.8 billion. Achieved this goal, with 2012 core administrative expenses of $1.8 billion.
(Core administrative expenses exclude $607
million in costs relating to the credit
organization, Treasury’s Making Home
Affordable program and extraordinary
expenses that are included in administrative
expenses in our statement of operations for
2012.)
Goal 2: Achieve 2012 credit
expense target. Limit total credit-related expenses for 2012 to no more than $15.9 billion. Achieved this goal, with total credit-related income of $1.1 billion in 2012.
Goal 3: Resolve specified risk
and control matters identified by
FHFA.
Complete all remediation activity for risk
and control matters identified by FHFA
within mutually agreed timeframes.
Submit remediation plans for all new risk
and control matters identified by FHFA
within FHFA-mandated timeframes.
Achieved this goal. Completed remediation
activity for all FHFA-identified risk and
control matters within agreed-upon
timeframes. Submitted remediation plans for
all new FHFA-identified risk and control
matters within mandated timeframes.
Goal 4: Achieve 2012
milestones of the operational
risk plan.
Implement all planned risk controls self-
assessments for 2012, and provide all
deliverables established by the Board within
agreed-upon timeframes.
Implement remediation plans for all high-
priority business unit operational risk issues
by specified dates.
Achieved this goal. Implemented the 2012
risk controls self-assessment plan and
completed all planned risk controls self-
assessments for 2012. Implemented the high-
priority business unit operational risk
remediation plans scheduled for 2012.
Goal 5: Meet 2012 targets for
Operating Plan. Achieve approved Operating Plan deliverables for 2012 and manage to overall
budget.
In March 2012, the Board of Directors
modified this metric to add that achievement
of the 2012 milestones should be considered
in light of the goals of the conservatorship
set forth in the 2012 conservatorship
scorecard.
Substantially achieved this goal. Completed
substantially all 2012 deliverables under the
Operating Plan. Some 2012 deliverables
were delayed to 2013, in most cases because
the final implementation of certain projects
was postponed to early 2013 in order to
minimize the operational risk associated with
implementing multiple new initiatives at the
same time. In addition, four Operating Plan
projects have been postponed indefinitely
due to the prioritization of conservatorship
scorecard objectives. Costs under the
Operating Plan during 2012 exceeded the
budget due primarily to the achievement and
implementation of some 2012 deliverables
ahead of schedule.
The Compensation Committee determined that the company substantially achieved all of the 2012 performance goals and
related metrics relating to the second installment of the 2011 long-term incentive award. Specifically, the Compensation
Committee determined that the company met expectations with respect to the cost savings goal, exceeded expectations with
respect to the credit expense goal, resolved all of the risk and control matters identified by FHFA within the agreed-upon
timeframes, achieved all 2012 milestones of the operational risk plan, and substantially achieved the 2012 targets for the
Operating Plan. In arriving at its funding determination, the Compensation Committee considered the full scope of
management’s performance, including management’s performance of the 2012 conservatorship scorecard and the additional
accomplishments described above under “Assessment of Corporate Performance on 2012 Conservatorship Scorecard.” The
Compensation Committee also considered the company’s prior performance against its 2011 performance goals. In evaluating
the company’s performance against these goals, the Compensation Committee did not assign specific weightings to any goal
or metric.