PART 1230—EXECUTIVE COMPENSATION Authority: 12 U.S.C. 1427, 1431(l)(5), 1452(h), 4502(6), 4502(12), 4513, 4514, 4517, 4518, 4518a, 4526, 4631, 4632, 4636, and 1723a(d). Source: 79 FR 4393, Jan. 28, 2014, unless otherwise noted. § 1230.1 Purpose. The purpose of this part is to implement requirements relating to the supervisory authority of FHFA under the Safety and Soundness Act with respect to compensation provided by the regulated entities and the Office of Finance to their executive officers. This part also establishes a structured process for submission of relevant information by the regulated entities and the Office of Finance, in order to facilitate and enhance the efficiency of FHFA's oversight of executive compensation. § 1230.2 Definitions. The following definitions apply to the terms used in this part: Charter acts Compensation Enterprise Executive officer (1) With respect to an Enterprise: (i) The chairman of the board of directors, chief executive officer, chief financial officer, chief operating officer, president, vice chairman, any executive vice president, any senior vice president, any individual in charge of a principal business unit, division, or function, and any individual who performs functions similar to such positions whether or not the individual has an official title; and (ii) Any other officer as identified by the Director; (2) With respect to a Bank: (i) The president, the chief financial officer, and the three other most highly compensated officers; and (ii) Any other officer as identified by the Director. (3) With respect to the Office of Finance: (i) The chief executive officer, chief financial officer, and chief operating officer; and (ii) Any other officer identified by the Director. Reasonable and comparable (1) Reasonable (i) The duties and responsibilities of the position; (ii) Compensation factors that indicate added or diminished risks, constraints, or aids in carrying out the responsibilities of the position; and (iii) Performance of the regulated entity, the specific employee, or one of the entity's significant components with respect to achievement of goals, consistency with supervisory guidance and internal rules of the entity, and compliance with applicable law and regulation. (2) Comparable Regulated entity § 1230.3 Prohibition and withholding of executive compensation. (a) In general. (b) Factors to be taken into account. (c) Prohibition on setting compensation by Director. (d) Advance notice to Director of certain compensation actions. (2) A regulated entity or the Office of Finance shall not, without providing the Director at least 30 days' advance written notice, enter into any written arrangement that: (i) Provides an executive officer a term of employment for a term of six months or more; or (ii) In the case of a Bank or the Office of Finance, provides compensation to any executive officer in connection with the termination of employment, or establishes a policy of compensation in connection with the termination of employment. (3) A regulated entity or the Office of Finance shall not, without providing the Director at least 30 days' advance written notice, pay, disburse, or transfer to any executive officer, annual compensation (where the annual amount has changed); pay for performance or other incentive pay; any amounts under a severance plan, change-in-control agreement, or other separation agreement; any compensation that would qualify as direct compensation for purposes of securities filings; or any other element of compensation identified by the Director prior to the notice period. (4) Notwithstanding the foregoing review periods, a regulated entity or the Office of Finance shall provide five business days' advance written notice to the Director before committing to pay compensation of any amount or type to an executive officer who is being newly hired. (5) The Director reserves the right to extend any of the foregoing review periods, and may do so in the Director's discretion, upon notice to the regulated entity or the Office of Finance. Any such notice shall set forth the number of business or calendar days by which the review period is being extended. (e) Withholding, escrow, prohibition. § 1230.4 Prior approval of termination agreements of Enterprises. (a) In general. (b) Covered agreements or contracts. 1 1 (c) Factors to be taken into account. (1) Whether the benefits provided under the agreement or contract are comparable to benefits provided under such agreements or contracts for officers of other public or private entities involved in financial services and housing interests who have comparable duties and responsibilities; (2) The factors set forth in § 1230.3(b); and (3) Such other information as deemed appropriate by the Director. (d) Exception to prior approval. (e) Effect of prior approval of an agreement or contract. (f) Form of approval. § 1230.5 Submission of supporting information. In support of the reviews and decisions provided for in this part, the Director may issue guidance, orders, or notices on the subject of information submissions by the regulated entities and the Office of Finance.