Freddie Mac 2012 Annual Report Download - page 340

Performance Measures for the Performance-Based Elements of Compensation
The performance measures for At-Risk Deferred Salary and the second installment of the 2011 TO grant, together with
a description of the assessment of actual performance against such measures, are presented below in “Determination of
Actual 2012 Compensation —At-Risk Deferred Salary Based on Corporate Performance,” “—At-Risk Deferred Salary
Based on Individual Performance,” and “— Second Installment of the 2011 Target Opportunity.” These performance
measures were chosen because they reflect our priorities during conservatorship. They also generally require the participation
and support of employees throughout the company.
Executive Compensation Best Practices
We employ the following executive compensation best practices:
• No tax “gross-ups”;
• Limited executive perquisites;
• Clawback provisions that result in a significant portion of the compensation earned under the Executive
Compensation Program being subject to recapture and/or forfeiture;
• No right to severance for senior executives, even in the event of an involuntary, without cause termination;
• No agreements that guarantee any amount of compensation for a specified term of employment; and
• No change in control provisions in any of our compensation or benefit programs.
Determination of 2012 Target TDC for NEOs
Role of Compensation Consultants
As part of the annual process to determine the Target TDC for each of the NEOs other than Mr. Layton, whose
compensation is fixed as described in “— Chief Executive Officer Compensation,” the Compensation Committee receives
guidance from Meridian Compensation Partners, LLC (Meridian), its independent compensation consultant. In addition to
the annual process to determine the Target TDC, Meridian provides guidance to the Compensation Committee during the
course of the year on other executive compensation matters.
Meridian has not provided the Compensation Committee with any non-executive compensation services, nor has the
firm provided any consulting services to our management.
2012 Comparator Group Companies
The Compensation Committee annually evaluates each senior executive’s Target TDC in relation to the compensation
of executives in comparable positions at companies that are either in a similar line of business or are otherwise comparable
for purposes of recruiting and retaining individuals with the requisite skills and capabilities. We refer to this group of
companies as the Comparator Group. The Comparator Group included the following companies for purposes of establishing
Target TDC for the NEOs for 2012:
Allstate The Hartford Prudential
American Express JPMorgan Chase* State Street
Bank of America* MasterCard SunTrust
Bank of New York Mellon MetLife U.S. Bancorp
Capital One Northern Trust Visa
Citigroup* PNC Wells Fargo*
Fannie Mae
* Only mortgage or real estate division-level compensation data from these diversified banking firms may be utilized where available and
appropriate for the position being benchmarked.
If there is either no reasonable match or insufficient data from the Comparator Group for a position, or if Meridian
believes that additional data sources would strengthen the analysis of competitive market compensation levels, the
Compensation Committee uses alternative survey data.
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