Freddie Mac 2011 Annual Report Download - page 368

attended the joint sessions. Copies of the Charters of the Audit Committee and the Business and Risk Committee are
available on our website at http://www.freddiemac.com/governance/bd committees.html.
The Chief Enterprise Risk Officer reports regularly to the joint meetings of the Business and Risk Committee and the
Audit Committee. The Chief Enterprise Risk Officer also reports to the full Board as appropriate.
For a discussion of the Compensation Committee’s conclusion that our compensation policies and practices do not
create risks that are reasonably likely to have a material adverse effect on us, see “Executive Compensation —
Compensation and Risk.”
Transactions with 5% Shareholders
As a result of our issuance to Treasury of the warrant to purchase shares of our common stock equal to 79.9% of the
total number of shares of our common stock outstanding, on a fully diluted basis, we are deemed a related party to the
U.S. government. Except for the transactions with Treasury discussed in “BUSINESS — Executive Summary —
Government Support for our Business,” “BUSINESS - Regulation and Supervision — Legislative and Regulatory
Developments — Legislated Increase to Guarantee Fees,” “NOTE 2: CONSERVATORSHIP AND RELATED
MATTERS — Related Parties as a Result of Conservatorship” as well as in “NOTE 8: DEBT SECURITIES AND
SUBORDINATED BORROWINGS,” and “NOTE 12: FREDDIE MAC STOCKHOLDERS’ EQUITY (DEFICIT),” no
transactions outside of normal business activities have occurred between us and the U.S. government since the beginning
of 2011.
FHFA, as conservator, approved the Purchase Agreement and our administrative role in the MHA Program and the
Memorandum of Understanding with Treasury, FHFA, and Fannie Mae (see “NOTE 2: CONSERVATORSHIP AND
RELATED MATTERS — Housing Finance Agency Initiative”). The remaining transactions described in the sections
referenced above did not require review and approval under any of our policies and procedures relating to transactions
with related persons.
In addition, we are deemed related parties with Fannie Mae as both we and Fannie Mae have the same relationships
with FHFA and Treasury. All transactions between us and Fannie Mae have occurred in the normal course of business.
Transactions with Institutions Related to Directors
In the ordinary course of business, we were a party during 2011, and expect to continue to be a party during 2012, to
certain business transactions with institutions affiliated with members of our Board. Management believes that the terms
and conditions of the transactions were no more and no less favorable to us than the terms of similar transactions with
unaffiliated institutions to which we are, or expect to be, a party. The only such transaction that is required to be disclosed
under SEC rules is described below.
Mr. Williams joined our Board in December 2008. In January of 2010, he was appointed Executive Director of the
Government Practice at CEB and since January 2012 he has served as a Senior Fellow. CEB provides best practices
research and analysis and executive education to corporations through memberships in various subject-matter interest
groups organized and managed by CEB. Mr. Williams’ responsibilities at CEB include contributing to and authoring
literature; advising on the development of CEB’s state and local government service strategy and its existing federal
government service offerings; and promoting future CEB services. We purchased memberships in certain membership
groups, and paid CEB approximately $447,500 and $492,400 for those memberships, in 2011 and 2012 year-to-date,
respectively.
This transaction was not required to be reviewed, approved or ratified under our Related Person Transactions Policy
because the Board concluded that our business relationship with CEB did not constitute a material relationship between
Mr. Williams and us that would impair Mr. Williams’ independence as our director.
Transactions with Institutions Related to Executive Officers
Mr. Renzi joined us in April 2010 and currently serves as our Executive Vice President — Single Family Business,
Operations and Technology. Prior to joining Freddie Mac, he served as the Chief Operating Officer of GMAC Residential
Capital and as President of GMAC Mortgage Corporation. That employment ended in March 2010.
GMAC Residential Capital, LLC, GMAC Mortgage Corporation, GMAC Mortgage, LLC, and Residential Funding
Company, LLC are all affiliated entities, and are now reorganized as subsidiaries of Ally Financial Inc., or Ally.
GMAC Mortgage, LLC, is a seller/servicer that sold mortgages to Freddie Mac with an aggregate unpaid principal
balance of approximately $15.8 billion in 2011, and mortgages with an aggregate unpaid principal balance of
approximately $1.2 billion through January 31, 2012.
363 Freddie Mac