Fannie Mae 2014 Annual Report Download - page 185

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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 2014, including his oversight of our safety and soundness
initiatives to replace our securities accounting and capital markets infrastructure and to transform the management of our
data, his oversight of our initiative to prepare our multifamily business and infrastructure for the future and his work in
connection with the common securitization platform, as well as his leadership of the credit portfolio management division.
Mr. Edwards’ efforts contributed to our success in meeting a number of objectives in the 2014 conservatorship scorecard,
including developing additional plans for loss mitigation strategies. Mr. Edwards also contributed to the company’s
achievement of the 2014 Board of Directors’ goals, including our efforts to meet program administrator obligations to
Treasury in support of the Making Home Affordable program.
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 2014 and his leadership of the Enterprise Risk Management
organization. Mr. Nichols led the company’s achievement of the 2014 Enterprise Risk Management goals included in the
2014 Board of Directors’ goals. He implemented an economic capital framework for measuring the company’s business
activities, including modeling, reporting, policies and governance; developed a framework for assessing our corporate risk
appetite and a comprehensive set of risk limits; launched a significant modeling effort; and strengthened his team.
Other Executive Compensation Considerations
Role of Compensation Consultants
The Compensation Committee’s independent compensation consultant is Frederic W. Cook & Co., Inc. (“FW Cook”).
Management’s outside compensation consultant is McLagan.
For 2014, McLagan advised management and the Compensation Committee on various compensation and human resources
matters, including:
• providing guidance and feedback on the company’s 2014 executive compensation program;
• advising on market trends, competitive pay levels and various compensation proposals for new hires and
promotions; and
• providing market compensation data for senior management positions, including the named executives’ positions.
For 2014, FW Cook advised the Compensation Committee and the Board on various executive compensation matters,
including:
• assisting the Compensation Committee in its discussions with FHFA on the company’s 2014 executive
compensation program;
• preparing an analysis of compensation for executives in positions comparable to Fannie Mae executive positions at
companies in our primary comparator group, based on information in proxy statements filed by those companies;
• reviewing McLagan’s analysis of market compensation data for select senior management positions;
• reviewing various management proposals relating to compensation structures and levels, and for new hires and
promotions;
• reviewing the company’s risk assessment of its 2014 compensation program;
• assisting the Compensation Committee in its evaluation of the company’s performance against the 2014
conservatorship scorecard and communicating its views to FHFA;
• assisting the Compensation Committee in its evaluation of the company’s performance against the 2014 Board of
Directors’ goals;
• facilitating the Compensation Committee’s evaluation of the Company’s CEO performance in 2014;
• informing the Compensation Committee of regulatory updates and market trends in compensation and benefits; and
• assisting with the preparation of executive compensation disclosure in this Annual Report on Form 10-K.