Freddie Mac 2012 Annual Report Download - page 367

In determining the independence of each Board member, the non-employee members of the Board reviewed the
following categories or types of relationships, in addition to those specifically addressed by the standards contained in
Section 5 of our Guidelines, to determine whether those relationships, either individually or when aggregated with other
relationships, would constitute a material relationship between the Director and us that would impair a Director’s judgment
as a member of the Board or create the perception or appearance of such an impairment:
•Board Memberships With For-Profit Business Partners. During 2012 Ms. Bammann and Messrs. Glauber and Rose
served, and, also in 2012 and currently, Ms. Byrd and Messrs. Lynch, Retsinas, and Shanks serve, as directors of
other companies that engage or have engaged in business with us resulting in payments between us and such
companies during the past three fiscal years. After considering the nature and extent of the specific relationship
between each of those companies and us, and the fact that these Board members are directors of these other
companies rather than employees, the non-employee members of the Board concluded that those business
relationships did not constitute material relationships between any of the Directors and us that would impair their
independence as our Directors.
•Board Memberships With Charitable Organizations To Which We Have Made Contributions. Mr. Retsinas serves as a
board member of a charitable organization that has received monetary contributions from us or the Freddie Mac
Foundation. The total annual amount contributed was below the applicable threshold in our Guidelines that would
require a specific determination that Mr. Retsinas is independent in spite of the contributions. The non-employee
members of the Board considered the contributions and the nature of the organization and concluded that the
relationship with the charitable organization did not constitute a material relationship between Mr. Retsinas and us
that would impair his independence as our Director.
•Board Members Who Are Executive Officers Or Employees Of Business Partners. Mr. Retsinas is employed by
Harvard University (“Harvard”) as a senior lecturer at the Harvard Business School and a lecturer at the Graduate
School of Design and in 2012 the Harvard Business School received a charitable contribution of less than $100,000
from one of our executive officers. Under our Guidelines, no specific independence determination is required with
respect to this contribution because it does not exceed the greater of $100,000 or 2% of Harvard’s consolidated gross
revenues for 2012, the year in which the charitable contribution was made.
Mr. Williams was appointed as Executive Director of the Government Practice at The Corporate Executive Board
Company, or CEB, in January 2010 and served in that role during 2011. From January 2012 until June 2012,
Mr. Williams served as a Senior Fellow of CEB. As of June 2012 he left his positions with CEB. 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 included contributing
to and authoring literature; advising on the development of CEB’s state and local government service strategy; and
promoting future CEB services. In 2010, 2011, 2012, and 2013 year-to-date we paid CEB $515,700, $447,500,
$650,200, and $500,400, respectively, for memberships in certain of CEB’s subject-matter interest groups and related
training and development. Currently, we are a member of 17 groups and in 2010, 2011, and 2012, we were a member
of 12, 13, and 17 groups, respectively. The annual amounts of our payments to CEB in 2010 and 2011 were
substantially below 2% of CEB’s annual revenues for the applicable years and the 2012 and 2013 payments are
substantially less than 2% of CEB’s 2011 revenues (the latest year for which CEB revenue is publicly available).
Therefore, under our Guidelines, those annual payments do not preclude the non-employee members of the Board
from concluding that Mr. Williams is independent. The non-employee members of the Board considered those
payments and the nature and extent of the relationship between us and CEB and concluded that this business
relationship did not constitute a material relationship between Mr. Williams and us that would impair Mr. Williams’
independence as our Director.
•Financial Relationships with For-Profit Business Partners. Since 2005, Ms. Bammann has owned stock of JPMorgan
Chase. In the aggregate, this stock represents a material portion of her net worth. JPMorgan Chase conducts
significant business with Freddie Mac, including, among other things, as a single-family and multifamily seller/
servicer, as an underwriter of our debt and mortgage securities and as a capital markets counterparty. In order to
eliminate any potential conflict of interest that might arise as a result of this stock ownership, Ms. Bammann has
agreed to recuse herself from discussing and acting upon any matters that are to be considered by the full Board or
any of the committees of which she is a member (including the Business and Risk Committee, which she chairs), and
that relate directly to JPMorgan Chase. The Audit Committee Chairman, in consultation with the Non-Executive
362 Freddie Mac