Board of Directors Compensation Policy
June 28, 2012

Policy Information

     
Document Title:
  Board of Directors Compensation Policy
Content Owner:
  Director of Human Resources and
Administration
Certification of Compliance Contact:
  N/A
Policy Category:
  FHLBank Policy
FHLBank-Level Approver:
  Policy Oversight Group
Board-Level Approver:
  Full Board (Compensation)
Review Frequency:
  Annually
Initial Effective Date:
  01/01/2010
Last Review Date:
  12/15/2011
Next Review Date:
  12/2012

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Introduction

This FHLBank Policy, governed by the board of directors (board), governs the
compensation of individuals serving as directors of the Federal Home Loan Bank
of Topeka (FHLBank). Section 7(i) of the Federal Home Loan Bank Act and 12
U.S.C. §1261.22 require the board annually to adopt a written compensation
policy to provide for the payment of reasonable compensation and expenses to the
directors for the time required of them in performing their duties as directors.

Purpose

Directors should be reasonably compensated for the time and effort exerted in
the performance of their duties as a director of FHLBank. This policy
establishes reasonable compensation for the activities and functions for which
director attendance or participation is necessary and provides compensation
reflecting the amount of time a director has spent on official FHLBank business.
Differentials in meeting attendance fees for the chair, vice chair and the
various committee chairs shall reflect the additional responsibility assumed by
these directors.

Scope

Directors shall be compensated based on attendance at board meetings and the
director’s performance of official FHLBank business.

Policy

1. Compensation. Individuals serving as directors of FHLBank shall be paid a
meeting fee for each day in physical attendance at a regular meeting of the
board and shall receive no other compensation from FHLBank other than
reimbursement of expenses. The following table illustrates the maximum annual
compensation to be paid to various board member positions. The daily meeting fee
shall be the maximum in the table below divided by six.

         
Position
  Maximum Annual Compensation
 
       
Director
  $ 75,000  
 
       
Vice Chair of Board
  $ 85,000  
 
       
Chair of Board
  $ 100,000  
 
       
Audit Committee Chair
  $ 85,000  
 
       
Compensation Committee Chair
  $ 85,000  
 
       
Operations Committee Chair
  $ 85,000  
 
       
Housing and Governance Committee Chair
  $ 85,000  
 
       
Risk Oversight Chair
  $ 85,000  
 
       

The maximum annual compensation amounts are based on an evaluation of McLagan
market research data, a fee comparison among the FHLBanks and the board’s
assessment of appropriate and comparable pay that will allow the FHLBank to
recruit and retain highly qualified directors.

2. Adjustments in Compensation. Only fees that reflect performance of official
FHLBank business shall be paid to a director. This Policy is structured to allow
decreases in compensation to reflect lesser attendance or performance at board
or committee meetings during a given year.

In addition to the compensation structure and potential reductions from the
maximum annual compensation as set forth in paragraph 1, the Chair of the
Compensation Committee shall have the authority, in his or her sole discretion,
to recommend that the board reduce the compensation of any director to reflect
lesser attendance or performance at board or committee meetings during a given
year. The Chair of the board shall have the authority, in his or her sole
discretion, to recommend that the board reduce the compensation of the Chair of
the Compensation Committee to reflect lesser attendance or performance at board
or committee meetings during a given year. If the Chair of the Compensation
Committee or the Chair of the board, as appropriate, determines that the
compensation paid to a director does not reflect the director’s performance of
official FHLBank business, the Chair of the Compensation Committee or the Chair
of the board, as appropriate, may recommend that the board authorize a clawback
of that director’s compensation in an amount to be determined by the board.

On a quarterly basis, the Chair of the Compensation Committee and the Chair of
the board shall review attendance records, as prepared by the corporate
secretary, and shall use those records, in addition to considering director
performance, when determining whether to recommend the board reduce or clawback
a director’s compensation.

3. Number of Meetings. The board shall hold at least six regular board meetings
per year. Special meetings of the board may be held as provided in the FHLBank’s
bylaws.

4. Reimbursement of Expenses. Directors shall be entitled to reimbursement for
all necessary and reasonable travel, subsistence and other related expenses
incurred in connection with the performance of their official duties as provided
in the Directors and Executive Officers Travel Policy, except that directors may
not be paid for gift or entertainment expenses.

Policy Review

This policy shall be reviewed annually and revised as needed by the Director of
Human Resources and Administration. Any such revisions shall be approved by the
Policy Oversight Group and submitted for review and approval by the Compensation
committee and the board.

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