Freddie Mac 2012 Annual Report Download - page 348

• The company’s performance in responding to a series of FHFA-directed changes to HARP designed to attract more
eligible borrowers to that program; and
• The company’s overall internal control environment.
Based on the assessment of performance, including the additional considerations described above, the Compensation
Committee recommended a score of 95% for corporate performance. FHFA approved the Compensation Committee’s
recommendation. This score was then applied to the funding level for the long-term incentive awards made to vice presidents
and certain non-officers and the TO payments to eligible senior officers, including the NEOs.
The Compensation Committee and FHFA concurred with the CEO’s recommended allocation of the TO funds to the
NEOs. That allocation was based on the same assessment of performance and took into consideration the same additional
factors as for the portion of At-Risk Deferred Salary based on individual performance discussed in “– At-Risk Deferred
Salary Based on Individual Performance.”
Based on these factors and their individual performance, Mr. Layton recommended no reduction be taken for
Ms. Wisdom, a reduction of 5% for Messrs. Kari and Weiss and a reduction of 15% for Mr. Mullings. The Compensation
Committee concurred with Mr. Layton’s recommendations. The following chart summarizes the target TO applicable to
performance during 2012 for each of the NEOs other than Mr. Layton, and the allocation of the pool of funds to be
distributed to the NEOs.
Table 84 — 2011 Target Opportunity
2011 Second Installment
Named Executive Officer Target Actual
Mr. Kari .................................................................................. $ 583,333 $554,167
Mr. Haldeman(1) ............................................................................ 1,000,000 —
Mr. Mullings .............................................................................. 273,172 232,196
Mr. Weiss ................................................................................ 366,667 348,333
Ms. Wisdom ............................................................................... 291,667 291,667
(1) In accordance with the terms of the prior executive compensation program, Mr. Haldeman forfeited his 2011 TO when he voluntarily terminated his
employment, effective June 30, 2012.
Written Agreements Relating to Employment of CEO and CFO
As described below, we have entered into certain agreements with Mr. Layton (our CEO), Mr. Kari (our CFO), and
Mr. Haldeman (our former CEO), including a Memorandum Agreement with each when they joined the company.
We entered into a Memorandum Agreement with Mr. Layton in connection with his employment as our Chief Executive
Officer. A copy of the Memorandum Agreement with Mr. Layton was filed as Exhibit 10.1 to our Current Report on Form 8-
K filed on May 10, 2012. We also have entered into: (a) a Memorandum Agreement; and (b) a recapture agreement with each
of Messrs. Kari and Haldeman in connection with their employment as our executive officers. Copies of the Memorandum
Agreement and the recapture agreement regarding Messrs. Kari and Haldeman were filed as Exhibits 10.1 and 10.2,
respectively, to our Current Reports on Form 8-K filed on September 24 and July 21, 2009, respectively, with respect to each
executive’s employment with us.
The compensation provisions of each executive’s Memorandum Agreement are summarized separately below.
Additional information about the components of executive compensation is discussed above in “— Elements of Total Direct
Compensation (TDC).”
Mr. Layton’s compensation, as provided in his Memorandum Agreement, consists of an annual base salary of $600,000.
Mr. Layton’s Memorandum Agreement provides that he will be eligible to participate in all employee benefit plans offered to
our senior executive officers, including our SERP, pursuant to the terms of these plans.
Mr. Kari’s compensation, as provided in his Memorandum Agreement, is as follows:
• A Semi-Monthly Base Salary of no less than $675,000 per year;
• Deferred Base Salary of $1,658,333 for 2010, payable as described above;
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