Fannie Mae 2013 Annual Report Download - page 194

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• Allstate Corporation • Fifth Third Bancorp • Prudential Financial, Inc.
• Ally Financial Inc. • Freddie Mac • Regions Financial Corporation
• American International Group Inc. • Hartford Financial Services Group, Inc. • State Street Corporation
• Bank of New York Mellon Corporation • Metlife, Inc. • SunTrust Banks, Inc.
• BB&T Corporation • Northern Trust Corporation • U.S. Bancorp
• Capital One Financial Corporation • PNC Financial Services Group, Inc.
The Compensation Committee follows a bifurcated approach to benchmarking senior executive positions. Under this
approach, while the comparator group noted above is the primary group of companies used for benchmarking senior
management pay levels, for certain senior management roles that are more comparable in function and/or scope to roles at
firms outside this comparator group, the company benchmarks pay levels against a broader group of companies. The
company believes this more comprehensive approach results in more relevant and better aligned market data.
The current named executives’ compensation was benchmarked as follows:
• The compensation of our Chief Executive Officer (Mr. Mayopoulos) and Chief Financial Officer (Mr. Benson) was
benchmarked against our primary comparator group identified above;
• The compensation of our Executive Vice President and Chief Risk Officer (Mr. Nichols) and our Executive Vice
President, General Counsel and Corporate Secretary (Mr. Lerman) was benchmarked against both the primary
comparator group and a group of large banks consisting of Bank of America Corporation, Citigroup Inc., JPMorgan
Chase & Co. and Wells Fargo & Company; and
• The compensation of our Executive Vice President and Chief Operating Officer (Mr. Edwards) was benchmarked
against the group of large banks previously described, multifamily specialty firms, Freddie Mac and Ally Financial
Inc.
In November 2013, McLagan provided the Compensation Committee with updated benchmarking data for the current named
executives and the Compensation Committee discussed this data at its November 2013 meeting. In each case, the data
compared the named executives’ total target direct compensation for 2013 with the market median of 2012 direct
compensation for comparable positions in the applicable comparator group of companies based on McLagan’s proprietary
database and as disclosed in the comparator companies’ annual reports, proxy statements and SEC filings. Each current
named executive’s total target direct compensation for 2013 was more than 30% below the market median for comparable
firms and, in the case of our Chief Executive Officer, was more than 90% below the market median.
Compensation Recoupment Policy
Beginning with compensation for the 2009 performance year, our executive officers’ compensation (other than executive
officers serving on an interim basis) is subject to the following forfeiture and repayment provisions, also known as
“clawback” provisions:
• Materially Inaccurate Information. If an executive officer has been granted deferred salary (defined in the
compensation recoupment policy as both the awards made under the deferred pay program established in 2009 and
deferred salary under our executive compensation program first established in 2012) or incentive payments (including
long-term incentive awards) based on materially inaccurate financial statements or any other materially inaccurate
performance metric criteria, he or she will forfeit or must repay amounts granted in excess of the amounts the Board of
Directors determines would likely have been granted using accurate metrics.
• Termination for Cause. If we terminate an executive officer’s employment for cause, he or she will immediately forfeit
all deferred salary, long-term incentive awards and any other incentive payments that have not yet been paid. We may
terminate an executive officer’s employment for cause if we determine that the officer has: (a) materially harmed the
company by, in connection with the officer’s performance of his or her duties for the company, engaging in gross
misconduct or performing his or her duties in a grossly negligent manner, or (b) been convicted of, or pleaded nolo
contendere with respect to, a felony.
• Subsequent Determination of Cause. If an executive officer’s employment was not terminated for cause, but the Board
of Directors later determines, within a specified period of time, that he or she could have been terminated for cause and