Freddie Mac 2011 Annual Report Download - page 345

discussed the additional considerations and determined that these should also be included in determining the appropriate
funding level for the second installment of the 2010 TO. The Compensation Committee then developed a preliminary
recommended funding level for the second installment of the 2010 TO, which was then submitted to FHFA for review.
Following FHFA’s review of our performance, it instructed the Compensation Committee to reduce its recommended
funding level in light of revisions to the affordable housing goal counting process discussed above and informed the
Compensation Committee of the maximum funding level that it would approve. In accordance with FHFA’s instruction,
the Compensation Committee, without concurring with FHFA’s determination, directed management to proceed using a
funding level for the 2010 TO second installment of 84%, the maximum level that FHFA indicated it would approve.
For both TO installments, a portion of the available funds has been allocated to provide a cash award to
approximately 500 employees in either administrative or professional staff roles who do not participate in our annual
short-term incentive program. This decision was made to recognize the contributions of these employees who provide
valuable core services to the company. In addition, these employees are generally in lower-paid roles with limited
advancement opportunities and are thus more adversely impacted by FHFA’s continuation of the directive to freeze
salaries and wage rates at 2010 levels. This allocation reduced the funding level available for distribution for the first
2011 TO installment and the second 2010 TO installment to approximately 78% and 83%, respectively.
For both the second 2010 and first 2011 TO installments, the Compensation Committee concurred with the CEO’s
recommendations regarding how the remaining available TO funds should be allocated among the Covered Officers under
the Executive Compensation Program, including the Named Executive Officers other than himself. The recommended
allocation was made after considering the factors listed below.
• Each officer’s performance against his/her individual 2011 performance objectives in terms of both business results
and leadership effectiveness;
• The relative contributions of each officer in relation to the contributions of the other officers;
• Each of the Named Executive Officers either achieved or exceeded his/her 2011 individual performance objectives.
The relatively narrow spread of the individual differentiation between the largest and smallest TO awards
(expressed as a percentage of each Named Executive Officer’s target) supports our continued emphasis of the need
for highly coordinated, cross-functional collaboration; and
• The entire senior officer team accomplished a great deal in an extraordinarily difficult operating environment
during 2011 and these accomplishments are especially significant considering the number of senior management
departures during the year.
Mr. Haldeman informed the Compensation Committee that the company’s best interests would be served if he was
not a participant in the February 2012 TO allocation process, which would result in him not receiving payment of either
TO installment. While the Committee felt that Mr. Haldeman’s performance during 2011 merited payment of the TO
installments, it also accepted his request that it should exclude him from the TO allocation process. After considering
these and other factors, the Compensation Committee determined that Mr. Haldeman should not receive either TO
installment. Mr. Haldeman will forfeit the remaining 2011 TO installment and any 2011 earned but unpaid Deferred Base
Salary upon his planned departure from the company later this year.
The following chart summarizes the TO applicable to performance during 2011 for each of the Named Executive
Officers and the amount that was approved by the Compensation Committee and FHFA and paid on February 16, 2012.
Table 82 — 2011 Target Opportunity
Named Executive Officer Target Actual Target Actual
2011 First Installment 2010 Second Installment
Mr. Haldeman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,000,000 $ — $1,000,000 $ —
Mr. Kari . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583,334 480,125 583,333 508,646
Mr. Renzi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414,773 308,416 176,136 138,807
Mr. Weiss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366,667 316,367 329,166 302,365
Ms. Wisdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291,667 251,656 253,181 232,567
The 2010 second installment amount for Mr. Renzi reflects a pro-ration of his annual TO based on his date of hire in
2010.
2011 Target TDC Compared to 2011 Actual TDC
The following table shows 2011 Target TDC compared to the approved 2011 actual TDC for each of the Named
Executive Officers. The amounts displayed in both the “Total Target” and “Total Actual” columns include the sum of
340 Freddie Mac