Freddie Mac 2015 Annual Report Download - page 348

Directors, Corporate Governance, and Executive Officers Corporate Governance
Freddie Mac 2015 Form 10-K 346
Our non-employee Board members concluded that all current members of our Audit Committee,
Compensation Committee, and Nominating and Governance Committee are independent within the
meaning of Sections 4 and 5 of our Guidelines and Section 303A.02 of the NYSE Listed Company
Manual. Our Board also determined that: i) all current members of our Audit Committee are independent
within the meaning of Exchange Act Rule 10A-3 and Section 303A.06 of the NYSE Listed Company
Manual; and ii) all current members of our Compensation Committee are independent within the meaning
of Exchange Act Rule 10C-1 and Section 303A.02(a)(ii) of the NYSE Listed Company Manual.
In determining the independence of each Board member, our non-employee Board members 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 in aggregate, 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 Business Partners. During 2015 and currently, Ms. Byrd and
Messrs. Bostic, Lynch, Retsinas, Shanks, and Williams have served 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, our non-employee Board members
concluded that those business relationships do 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 Payments. During 2015
and currently, Mr. Bostic has served as a board member of two charitable organizations that received
payments from us. Under the Guidelines, no specific independence determination is required with
respect to these payments because they do not exceed the greater of $1 million or 2% of the
organization’s consolidated gross revenues for each of the last three fiscal years. During 2015 and
currently, Mr. Retsinas has served as Director Emeritus of a charitable organization that received
payments from us. Because the total annual amount paid to the charitable organization did not
exceed the greater of $1 million or 2% of the organization’s consolidated gross revenues for each of
the last three fiscal years, no specific independence determination with respect to these payments is
required under our Guidelines; moreover, since Mr. Retsinas is neither a board member nor a trustee
of the charitable organization, the payments would not require an independence determination in any
event. The non-employee members of the Board considered the payments and the nature of the
organizations and concluded that the relationships with the charitable organizations do not constitute
a material relationship between Mr. Bostic or Mr. Retsinas and us that would impair their
independence as our directors.
• Financial Relationships with For-Profit Business Partners. Mr. Hartnack owns stock of US Bancorp. In
the aggregate, this stock represents a material portion of his net worth. US Bancorp conducts
significant business with Freddie Mac, including as a single-family seller/servicer and as trustee of
some of Freddie Mac’s securitization transactions. In order to eliminate any potential conflict of
interest that might arise as a result of this stock ownership, Mr. Hartnack has agreed to recuse
himself from discussing and acting upon any matters that are to be considered by the full Board or
any of the committees of which he is a member, and that relate directly to US Bancorp. The Audit