Freddie Mac 2015 Annual Report Download - page 359

Executive Compensation Compensation Discussion and Analysis
Freddie Mac 2015 Form 10-K 357
ELEMENTS OF TARGET TOTAL DIRECT COMPENSATION
Compensation under the 2015 EMCP consists of the following elements:
Base Salary
Deferred Salary
Fixed Deferred
Salary
At-Risk Deferred Salary
Conservatorship
Scorecard Corporate Scorecard/ Individual
Cannot exceed $500,000
without FHFA approval To encourage executive retention To encourage achievement of conservatorship, corporate, and individual performance goals
Earned and paid bi-weekly Equal to total Deferred
Salary less the At-Risk
portion
Subject to reduction based
on Conservatorship
Scorecard performance
Subject to reduction based
on performance against both
the Corporate Scorecard
and individual objectives
The amount earned in each quarter is paid on the last pay date of the corresponding quarter in
the following year, referred to as the Approved Payment Schedule
Interest accrues on Deferred Salary at one-half of the one-year Treasury Bill rate in effect on
the last business day immediately preceding the year in which the Deferred Salary is earned
and is paid at the same time as the Deferred Salary to which it relates.
The objectives against which 2015 corporate performance was measured, together with the assessment
of actual performance against those objectives, are described in “— Determination of 2015 At-Risk
Deferred Salary — At-Risk Deferred Salary Based on Conservatorship Scorecard Performance” and “—
Determination of 2015 At-Risk Deferred Salary — At-Risk Deferred Salary Based on Corporate Scorecard
Goals and Individual Performance.” These performance measures were chosen because they reflected
our 2015 priorities during conservatorship.
See “— Other Executive Compensation Considerations — Effect of Termination of Employment” for
information on the effect of a termination of employment, including the timing and payment of any unpaid
portion of Deferred Salary and related interest.
EXECUTIVE COMPENSATION BEST PRACTICES
What We Do What We Don't Do
Clawback provisions with a significant
portion of compensation subject to
recapture and/or forfeiture
No tax “gross-ups”
No agreements that guarantee a specific
amount of compensation for a specified
term of employment
Use of an independent compensation
consultant by the Board’s Compensation
Committee No golden parachute payments or other
similar change in control provisions
Annual compensation risk review
Provide a single executive perquisite,
reimbursement of tax, estate, and/or
personal financial planning expenses (up
to $4,500 annually, with an additional
$2,500 in the first year of use)
No hedging or pledging of company
securities
Evaluation of company performance
against multiple measures, including non-
financial measures