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Board Compensation
The key components of compensation for our outside directors are cash fees and stock awards that tie a majority of director compensation to the long-term value of Freddie Mac. Each director may defer receipt of cash fees and stock awards, as well as elect to convert cash fees into common stock under the Directors' Deferred Compensation Plan and the Directors' Stock Compensation Plan. We do not have any pension or retirement plans for our outside directors. Employee directors do not receive any additional compensation for their Board service.
The following table shows the cash and equity compensation levels for 2007 and 2008:
Outside Director Compensation
|
Board Service |
For 2007 |
For 2008 |
|
Cash Compensation |
| |
|
Annual Retainer |
$ 60,000 | $ 60,000 |
|
Annual Supplemental Retainer for Lead Director |
100,000 | 100,000 |
|
Per Meeting Fee |
1,500 | 1,500 |
|
Equity Compensation (1) |
| |
|
Stock Options |
$ 0 |
$ 0 |
|
Restricted Stock Units |
120,000 |
120,000 |
|
Committee Service (Cash) |
| |
|
Annual Retainer for Committee Chair (other than Audit) |
$ 10,000 | $ 10,000 |
|
Annual Retainer for Audit Committee Chair |
30,000 |
30,000 |
|
Per Meeting Fee (other than Audit) |
1,500 | 1,500 |
|
Per Meeting Fee for Audit Committee Members |
3,000 |
3,000 |
| Per Interview Fee for Director Recruiting |
1,500 | 1,500 |
|
Per Interview Fee for Litigation-related Interviews (2) |
1,500 | 1,500 |
Supplemental Payments to Working Group,
Effective September 7, 2007 |
| |
|
Annual Retainer for Current Working Group (3) |
$ 40,000 |
$ 40,000 |
Newly elected and newly appointed outside directors during their first term receive initial grants of restricted stock units worth a fair market value of approximately $120,000 on the date of the first Board meeting following the Director’s election or appointment. On February 2, 2006, the Board approved payments of $1,500, effective as of October 1, 2005, to directors sitting on the Special Derivative Litigation Committee ("SDLC") for each interview in which he or she participates that is conducted in connection with the business and affairs of the SDLC.
On January 31, 2008, the Board approved payments of $1,500 to directors sitting on the Special Litigation Committee ("SLC") for each interview in which he or she participates that is conducted in connection with the business and affairs of the SLC. On September 7, 2007, the Board approved the payment of an annual retainer of $40,000 to each member of the working group that was formed in May 2007 to lead the Board's efforts on management succession planning matters (the "Current Working Group"). The retainer will be paid in equal quarterly installments, beginning with the fourth quarter of 2007. On September 7, 2007, the Board also approved a supplemental payment of $20,000 to each member of the Current Working Group in recognition of the Current Working Group's services from May to September 2007 and a supplemental payment of $20,000 to each member of a prior working group (the "Original Working Group") in recognition of the Original Working Group's services from December 2006 to April 2007 on succession planning for the Chief Executive Officer.
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