NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/

CFC’s success in providing industry expertise and responsive service to meet the needs of our members across the U.S. is dependent on the quality of service provided by our employees and their relationships with our members. We therefore strive to align our human capital management strategy with our member-focused mission and core values of service, integrity and excellence. Our objectives are (i) to attract, develop and retain a highly qualified workforce with backgrounds and experience in multiple areas whose skills and strengths are consistent with CFC’s mission, and (ii) to create an engaged and collaborative work culture, which we believe is critical to deliver exceptional service to our members.

Governance of Human Capital

CFC’s executive leadership team and board of directors work together to provide oversight on most human capital matters. The compensation committee of the board of directors meets quarterly to review updates to our compensation programs, including our salary structure, incentive plans and executive compensation. Our board is provided with periodic updates on succession planning efforts, current human capital management risks and mitigation efforts in addition to any other matters that affect our ability to attract, develop and maintain the talent needed to execute on our corporate objectives.

Recruiting and Retaining Talent

As a financial services organization, our recruitment goal is to attract and retain a highly skilled workforce in a highly competitive talent market. We strive to provide both external candidates and internal employees with meaningful career opportunities ranging from entry-level to expert-level professional, management and executive positions.

We use a variety of methods to attract talent, including outreach to local universities, recruitment job boards, a referral bonus program and targeted industry-related job posting sites. When appropriate, we engage with recruiting firms to ensure that we have surveyed a broad scope of active and passive candidates for certain critical positions. We strive to ensure that CFC’s employment value proposition reflects a mission-driven cooperative so that we can attract individuals who are highly engaged with our vision to be our members’ most trusted financial resource. One of our talent and culture strategic initiatives in fiscal year 2025 focused on assessing and updating our employment branding to ensure it remains relevant and engaging to potential candidates for employment.

Because many of our business operations involve significant member-facing interaction with a relatively stable base of long-standing member-borrowers, we place a priority on the retention of high-performing employees who have extensive, in-depth experience serving the needs of our members. Our turnover rate for fiscal year 2025 was 9.5%. Our average employee tenure was eight years with more than a quarter of our workforce having 10 or more years of service with CFC. Given the ongoing challenges of the professional talent market, we feel that CFC’s employee pool represents a balanced mix of long-term and new staff to serve our members. We welcomed 59 new hires this fiscal year and employed 317 staff members as of May 31, 2025, all of which are located in the U.S. The majority of our workforce is headquartered in Dulles, Virginia.

Employee Engagement and Development

In fiscal year 2025, CFC continued talent and culture initiatives with a focus on instilling a positive organizational culture characterized by high levels of employee satisfaction and engagement. We also conducted an employee engagement survey soliciting feedback on drivers of employee satisfaction and leadership contribution; 83% of our staff participated in the survey. Results were analyzed and reported at the corporate and group levels to collaborate on ways to promote employee engagement throughout CFC. As part of our efforts to promote an engaged and collaborative workplace culture, we encourage employees to expand their capabilities and enhance their skills through employer-funded onsite training, external training, tuition assistance and professional events. In fiscal year 2025, CFC employees participated in our corporate development programs and took advantage of external professional training opportunities, such as professional certifications, industry seminars and workshops. We seek to create and tailor our training programs to meet the skill needs and employee interests, while also addressing key risks and compliance matters. We also continued our annual Leadership Development Program, designed for managers at all levels, by providing training opportunities aligned to CFC’s core leadership competencies. The program’s aim was to incorporate leadership competencies, such as business acumen, strategic agility, critical thinking skills and more, across a variety of programs, courses and levels to support and grow our leadership bench strength.

Additionally, CFC offered a variety of training opportunities to all staff to enhance their professional and technical skills such as presentation skills, performance management, project management, collaboration skills and more. This is incorporated in custom-made programs like CFC Learning Bites, which allows staff to engage in knowledge-transfer sessions on various technical skills from CFC’s subject matter experts.

CFC also completed a corporate-wide training program called E3: Engage, Enlighten, Excel, which is aligned with CFC’s Fiscal Year 2025 Corporate Scorecard goal “Employee Engagement.” E3’s purpose was to provide educational opportunities for employees to gain a greater overall understanding of CFC’s corporate governance, connect with the purpose and importance of CFC’s member meetings, recognize developments and challenges in the cooperative industry, and be aware of the risks and potential opportunities in the use of artificial intelligence. CFC also supports employee development through a company-sponsored Toastmasters chapter, guest speakers from cooperative partners and staff visits to local electric cooperatives to allow employees to learn first-hand how their efforts contribute to our members’ success.

Compensation and Benefits Packages

Attracting, developing, rewarding and retaining high-level talent is a key component of our human capital objectives, so we seek to provide a competitive Total Rewards package consisting of base pay, an annual incentive opportunity, and benefits packages. CFC’s compensation program includes a base salary range structure to provide flexibility in meeting labor market demands and the ability to differentiate pay based on experience and performance. The salary ranges are structured in zones aligned with median market pay for the positions in each zone. We continue to evaluate and make adjustments to our merit increase budget in order to retain and attract exceptional staff in a highly competitive talent market.

Our annual incentive plan is based on (i) attainment of our targeted corporate scorecard goals as established at the beginning of the fiscal year and (ii) individual performance ratings from our annual review process. Attainment of the annual scorecard goals requires the collective engagement and effort of employees across the company, which we believe incentivizes teamwork and fosters a collaborative working environment. The individual performance component enables the organization to differentiate a portion of the incentive compensation, which demonstrates the value of a high-performance culture on behalf of our members.

The employee benefits components of our Total Rewards package include the following: vacation and leave programs; health, dental, vision, life and disability insurance coverage; and flexible spending and health savings plans, most of which are funded in whole or in part by CFC. We make investments in the future financial security of our employees by offering retirement plans that consist of a 401(k) plan with a company match component and an employer-funded defined benefit retirement plan in which CFC makes an annual contribution in an amount that approximates 20% of each employee’s base salary, which we believe helps in our efforts to engage employees, retain high-performing employees and reduce turnover. We also offer programs and resources intended to promote work-life balance, assist in navigating life events and improve employee well-being, such as flexible work schedules, remote work options, parental leave, an employee assistance program, legal insurance and identity theft coverage services.

Open-Door Communications

CFC maintains a strong focus on our core value of integrity in pursuit of our mission. To promote open communication, we maintain an open-door policy and provide multiple avenues for employees to voice their concerns and offer suggestions. Employees are encouraged to report any issues to their manager, senior vice president, corporate compliance, Human Resources or our corporate ethics helpline. All new employees receive Code of Conduct & Business Ethics training, and all employees complete an annual Code of Conduct & Business Ethics training to foster a culture of integrity and accountability.