Freddie Mac 2010 Annual Report Download - page 301

ITEM 11. EXECUTIVE COMPENSATION
Executive Summary
Our critical role in providing liquidity and stability to the U.S. housing and mortgage markets while in conservatorship
requires us to attract, motivate and retain talented executives who can lead the company despite our uncertain future. To
assist us in achieving these priorities, in December 2009 our Board adopted (and FHFA approved, in consultation with
Treasury) a new executive compensation program.
The performance-based incentives under the program, which represent a significant amount of total compensation for
our executives, are funded primarily based on our performance against objectives that are established by the Board, reviewed
and approved by FHFA, and reflect our priorities during conservatorship. The funding level also takes into account other
relevant factors beyond performance against these objectives.
For 2010, the performance-based elements of compensation were determined by evaluating performance against a
balanced set of objectives in four areas: mission, financial execution, accounting and controls, and our business
infrastructure. The evaluation was initially conducted by management and then reviewed and approved by the Compensation
Committee. Following the evaluation of performance, the Compensation Committee then considered whether any other
relevant internal or external factors should be taken into account in establishing the funding level.
The following table shows the approved funding level for each component of performance-based compensation under
the program. A detailed discussion is contained in the “Compensation Discussion and Analysis” about the company’s
performance against the objectives applicable to each component of performance-based compensation as well as other factors
considered by the Compensation Committee in determining the performance-based compensation funding levels.
Table 70 — Assessment of 2010 Performance
2010 Deferred Base Salary
(Performance-Based Element) 2010 First Installment 2009 Second Installment
Target Incentive Opportunity
Funding Level Percent ................................ 88% 95% 95%
Compensation Discussion and Analysis
This section contains information regarding our compensation programs and policies applicable to the following
individuals, who were determined to be our Named Executive Officers for the year ended December 31, 2010 under SEC
rules.
• Charles E. Haldeman, Jr., Chief Executive Officer
• Ross J. Kari, Executive Vice President — Chief Financial Officer
• Robert E. Bostrom, Executive Vice President — General Counsel & Corporate Secretary
• Peter J. Federico, Executive Vice President — Investments & Capital Markets and Treasurer
• Donald J. Bisenius, Executive Vice President — Single Family Credit Guarantee
See “Other Information — Departure of Named Executive Officer” for information concerning Mr. Bisenius’ plan to leave
Freddie Mac, effective April 1, 2011.
Executive Management Compensation Program
Overview of Program Structure
The Executive Management Compensation Program covers the compensation of Freddie Mac executives in the
following positions, each a “Covered Officer”:
• Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer;
• All Executive Vice Presidents; and
• All Senior Vice Presidents.
Each Named Executive Officer is a Covered Officer.
Prior to its approval in December 2009, our senior management and Compensation Committee worked closely with
FHFA over the course of several months to develop and refine the Executive Compensation Program’s overall structure under
the terms of our conservatorship. The program is a result of collaboration and compromise with FHFA that reflects the
principles established by Treasury’s executive compensation guidelines for companies receiving federal assistance.
Specifically, the Executive Compensation Program was designed to align executive pay with achievement of our mission of
providing liquidity, stability, and affordability to a troubled mortgage market and with certain financial, infrastructure
development and other corporate performance objectives established annually by our Board and approved by FHFA. These
objectives reflect our responsibilities both under our charter and in conservatorship as determined by the Conservator. The
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