Company: AGM-PH
Filing Date: 2025-04-16
Form Type: DEF 14A
Source: 0000845877-25-000143
Chunk: 95

Company: FEDERAL AGRICULTURAL MORTGAGE CORP
Filing Date: 2025-04-16
Form: DEF 14A
Chunk 95
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 As described in more detail in the CD&A, non-GAAP Earnings is derived from GAAP net income attributable to common stockholders (which is GAAP net income less dividends paid on preferred stock and any losses on the retirement of preferred stock), and Farmer Mac uses Earnings as a financial metric to determine payouts in both its short-term and long-term incentive programs. The CAP for the PEO and the average CAP for the non-PEO NEOs were not completely aligned with Farmer Mac's consistently improving GAAP net income and non-GAAP Earnings during 2020-2024. Both of those financial metrics increased each year during the five-year period, particularly from 2021-2023. In contrast, the PEO's and other NEOs' CAP varied each year during that period, increasing significantly from 2020 to 2021 but then decreasing from 2021 to 2022, then increasing again from 2022 to 2023, and then decreasing in 2024 compared to 2023. This is due in large part to the significant emphasis that Farmer Mac places on equity-based incentive compensation, which is sensitive to changes in stock price as discussed in the section above. Each of net income and Earnings may or may not have an overall impact on CAP as calculated in accordance with applicable rules for a variety of reasons, including: (1) short-term incentive performance payments, while at risk and connected to performance, are only one component of CAP, and the other components of CAP can, in the aggregate, have a greater influence on the result than any one metric; and (2) a substantial amount of the variation in year-over-year executive CAP is tied to changes in Farmer Mac’s stock price. Although Farmer Mac's stock price is often positively correlated with the company's profitability and core performance, that is not always the case. As a result, above-target performance on the financial measures evaluated by Farmer Mac’s short- and long-term performance programs may be otherwise negated by a negative trend in the share price of Farmer Mac’s Class C Non-Voting Common Stock in the calculation of CAP. Many factors can affect Farmer Mac's stock price that may not be directly, indirectly, or related at all to Farmer Mac's profitability and performance, including trading volume, the individual decisions of investors, and general economic and market conditions, all of which Farmer Mac and the NEOs have no control over.

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