Fannie Mae 2013 Annual Report Download - page 192

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to representation and warranty and PLS matters. Because Mr. Mayopoulos’ total target direct compensation consists solely of
base salary, with no performance-based compensation, the Board of Directors’ assessment of his performance in 2013 did not
affect his compensation.
David Benson, Executive Vice President and Chief Financial Officer. In recommending and determining Mr. Benson’s
individual performance-based at-risk deferred salary, the Chief Executive Officer, the Compensation Committee and the
Board of Directors considered Mr. Benson’s many achievements and his expanded leadership role in 2013. Taking on the role
of Chief Financial Officer, Mr. Benson made significant improvements to our finance function in 2013, addressing
organizational, personnel and process issues, while continuing to provide strong intellectual contributions and strategic
direction to the company as a whole. Mr. Benson supported the company’s achievement of the 2013 Board of Directors goals,
including by managing the risk of the retained portfolio within risk limits established by the Board of Directors, ensuring core
administrative expenses remained within plan and managing our efforts in connection with FHFA’s Advisory Bulletin
Regarding Framework for Adversely Classifying Loans. Mr. Benson also provided leadership in the company’s interactions
with FHFA and other government agencies and maintained relationships with our international debt and Fannie Mae MBS
investors.
Susan McFarland, Former Executive Vice President and Chief Financial Officer. In recommending and determining Ms.
McFarland’s individual performance-based at-risk deferred salary, the Chief Executive Officer, the Compensation Committee
and the Board of Directors considered Ms. McFarland’s achievements and her transition of leadership of the Finance
organization in 2013 to Mr. Benson. The Board determined that the individual performance-based portion of Ms.
McFarland’s 2013 at-risk deferred salary would equal her target of $216,000, which was prorated to reflect what she earned
prior to her departure on June 30, 2013.
Terence Edwards, Executive Vice President and Chief Operating Officer. In recommending and determining Mr. Edwards’
individual performance-based at-risk deferred salary, the Chief Executive Officer, the Compensation Committee and the
Board of Directors considered Mr. Edwards’ many achievements in 2013 as well as his continued outstanding leadership of
the credit portfolio management division and his assumption of responsibility, as Chief Operating Officer, for execution of
our strategic initiatives. Mr. Edwards successfully led our efforts on a number of objectives in the 2013 conservatorship
scorecard, including supporting the development of the CSP and making appropriate modifications to or enhancements of our
loss mitigation efforts, completing our representation and warranty demands for pre-conservatorship loan activity. Under Mr.
Edwards’ leadership, Fannie Mae resolved the substantial majority of outstanding single-family repurchase requests to
mortgage seller and servicer counterparties in 2013. Mr. Edwards’ work also contributed to the company’s achievement of
2013 Board of Directors’ goals, including his work redesigning the short sales process and reducing our seriously delinquent
single-family loan count by 157,754 loans to a new total of only 418,837 loans as of December 31, 2013.
Bradley Lerman, Executive Vice President, General Counsel and Corporate Secretary. In recommending and determining Mr.
Lerman’s individual performance-based at-risk deferred salary, the Chief Executive Officer, the Compensation Committee
and the Board of Directors considered Mr. Lerman’s many achievements in 2013 and his leadership of the Legal and
Government and Industry Relations divisions. Under Mr. Lerman’s leadership, the company successfully resolved significant
litigation matters in 2013, including settling a consolidated class action lawsuit regarding securities law claims that was
initially filed in 2004 and working with FHFA to settle lawsuits FHFA filed on our behalf and reaching other settlements
relating to private-label mortgage-related securities sold to us. The Legal division under Mr. Lerman’s leadership also
provided critical support in connection with the company’s achievement of a number of objectives in the 2013
conservatorship scorecard such as establishing the initial ownership and governance structure for the CSP, demonstrating the
viability of single-family risk transfer transactions, addressing our repurchase demands for claims relating to representation
and warranty issues and developing and implementing a streamlined modification initiative to enhance our loss mitigation
efforts. The Compensation Committee and the Board of Directors also considered Mr. Lerman’s contributions to corporate
leadership and culture.
John Nichols, Executive Vice President and Chief Risk Officer. In recommending and determining Mr. Nichols’ individual
performance-based at-risk deferred salary, the Chief Executive Officer, the Compensation Committee and the Board of
Directors considered Mr. Nichols’ many achievements in 2013 and his leadership of the Enterprise Risk Management
organization. Mr. Nichols was responsible for the company’s achieving the 2013 Enterprise Risk Management goals included
in the 2013 Board of Directors goals. Mr. Nichols rechartered the company’s Model Oversight Committee, Capital
Committee and Credit Expense Forecast and Allowance Committee in 2013, and he created the Enterprise Risk Committee to
provide more active enterprise risk management ownership. He also established counterparty limits for all Fannie Mae
counterparties, tightened market risk and liquidity limits governing the capital markets legacy portfolio, continued
development of portfolio-level stress testing and board reporting and established a front-end quality control function as part
of single-family risk management.