Fannie Mae 2014 Annual Report Download - page 176

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Elements of 2014 Executive Compensation Program
Direct Compensation
The table below summarizes the principal elements, objectives and key features of our 2014 executive compensation program
for our named executives other than our Chief Executive Officer, whose direct compensation for 2014 consisted solely of
$600,000 in base salary. All elements of our named executives’ direct compensation are paid in cash.
Compensation
Element Form
Primary
Compensation
Objectives Key Features
Base Salary Fixed cash payments, which
are paid during the year on a
bi-weekly basis.
Attract and retain
named executives by
providing a fixed level
of current cash
compensation.
Base salary reflects each named executive’s
level of responsibility and experience, as
well as individual performance over time.
Base salary is capped at $500,000 for all of
our executive officers other than our Chief
Executive Officer and Chief Financial
Officer.
Deferred Salary Deferred salary is earned in bi-
weekly installments over the
course of the performance year,
and is paid in quarterly
installments in March, June,
September and December of
the following year. Interest
accrues on deferred salary at
one-half of the one-year
Treasury Bill rate in effect on
the last business day
immediately preceding the year
in which the deferred salary is
earned.
There are two elements of
deferred salary:
• a fixed portion that is subject
to reduction if an executive
leaves the company within
one year following the end of
the performance year; and
• an at-risk portion that is
subject to reduction based on
corporate and individual
performance.
Fixed Deferred Salary
Retain named
executives. Earned but unpaid fixed deferred salary is subject to reduction if a named executive
leaves the company within one year
following the end of the performance year.
The amount of earned but unpaid fixed
deferred salary received by the named
executive will be reduced by 2% for each
full or partial month by which the
executive’s separation date precedes
January 31 of the second year following the
performance year.
At-Risk Deferred Salary
Retain named
executives and
encourage them to
achieve corporate and
individual performance
objectives.
Equal to 30% of each named executive’s
total target direct compensation. Half of at-
risk deferred salary is subject to reduction
based on corporate performance against the
2014 conservatorship scorecard as
determined by FHFA. The remaining half of
at-risk deferred salary is subject to
reduction based on individual performance
as determined by the Board of Directors,
with FHFA’s review, taking into account
corporate performance against the 2014
Board of Directors’ goals.
There is no potential for at-risk deferred
salary to be paid out at greater than 100% of
target; at-risk deferred salary is subject only
to reduction.