Edgar Filing: FIRSTFED FINANCIAL CORP

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

FIRSTFED FINANCIAL CORP.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

Reg. (S) 240.14a-101.

SEC 1913 (3-99)

FIRSTFED FINANCIAL CORP.
401 Wilshire Boulevard
Santa Monica, CA 90401-1490

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

April 24, 2002

NOTICE IS HEREBY GIVEN that an annual meeting of stockholders (the "Annual
Meeting") of FirstFed Financial Corp. ("FFC" or the "Company") will be held in
the Pacific Room of the Doubletree Guest Suites at 1707 Fourth Street, Santa
Monica, California 90401 on April 24, 2002 at 11:00 A.M., local time, for the
following purposes:

(1) To elect three Directors to hold office for a three-year term and until
their successors are duly elected and qualified.

(2) To ratify the appointment of KPMG LLP as independent auditors of the
Company for 2002.

(3) To approve an amendment to the Certificate of Incorporation of the
Company to require a two-thirds vote of directors to amend the
retirement age for directors of the Company.

(4) To transact such other business as may properly be brought before the
Annual Meeting or any adjournment or adjournments thereof.

Your Board of Directors urges stockholders to vote FOR Items 1, 2, and 3.

These items of business are more fully described in the Proxy Statement
accompanying this Notice. Only stockholders of record at the close of business
on March 4, 2002 are entitled to vote at the Annual Meeting or any adjournments
thereof.

If you receive more than one proxy in separate mailings, it is an
indication that your shares are registered differently in more than one account.
All proxy cards received by you should be signed and mailed to ensure that all
of your shares are voted.

By order of the Board of Directors

Ann E. Lederer
Corporate Secretary
Santa Monica, California
March 15, 2002

IMPORTANT

Whether or not you expect to attend in person, we urge you to vote your
proxy at your earliest convenience by mail using the enclosed postage-paid reply
envelope. This will ensure the presence of a quorum at the Annual Meeting and
will save the Company the expense of additional solicitation. Sending in your
proxy will not prevent you from voting your shares at the Annual Meeting if you
desire to do so. You may revoke your proxy at any time before it is exercised
by filing a written revocation or a duly executed proxy bearing a later date
with the Secretary of the Company. If your shares are held in the name of a
brokerage firm or nominee, you will need additional documentation from your
record holder in order to vote personally at the Annual Meeting.

FIRSTFED FINANCIAL CORP.
401 Wilshire Boulevard
Santa Monica, California 90401-1409

___________________

PROXY STATEMENT

For 2002 Annual Meeting of Stockholders
To Be Held on April 24, 2002

___________________

INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING.

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of FirstFed Financial Corp. ["FFC", and
collectively with its subsidiary, First Federal Bank of California ("Bank"), the
"Company"] for use at the Annual Meeting of Stockholders to be held on April 24,
2002, and at any adjournment thereof. The approximate date of mailing of the
Notice, Proxy Statement and form of proxy for the Meeting is March 15, 2002.

Only those stockholders of record at the close of business on March 4, 2002
will be entitled to vote at the Annual Meeting. The Company had a total of
17,259,271 shares of common stock ("Company Stock") outstanding at that date.
Stockholders will be entitled to one vote for each share of Company Stock held
by them of record at the close of business on the record date on any matter that
may be presented for consideration and action by the stockholders at the Annual
Meeting.

All valid proxies received in response to this solicitation will be voted
in accordance with the instructions indicated thereon by the stockholders giving
such proxies. If no contrary instructions are given, proxies received will be
voted in favor of the election of the three director nominees named in this
Proxy Statement and in favor of the other proposals described herein.
Abstentions and broker non-votes are counted for purposes of determining whether
a quorum of stockholders is present at the Annual Meeting but are not considered
as having voted for purposes of determining the outcome of a vote. Proxies
solicited hereby may be voted for adjournment of the Annual Meeting (whether or
not a quorum is present for the transaction of business) in order to permit
further solicitation of proxies if the Board of Directors of the Company
determines that such adjournment would be advisable in order to obtain
sufficient votes for approval of the matters to be voted upon at the Annual
Meeting.

If you are a participant in the First Federal Bank of California Employee
Stock Ownership Plan and Trust, you may direct the trustee or plan administrator
how to vote the number of shares allocated to your account. The enclosed proxy
indicates any Company Stock allocated to your account.

The Board of Directors does not know of any other business to be presented
for action at the Annual Meeting. If any other business is properly presented at
the Annual Meeting and may properly be voted upon, the proxies solicited hereby
will be voted on such matters in accordance with the best judgment of the proxy
holders named in such proxies. A stockholder's proxy may be revoked at any time
before it is voted at the Annual Meeting by giving written notice of such
revocation to the Secretary of the Company (which notice may be given by the
filing of a duly executed proxy bearing a later date) or by attending the Annual
Meeting and voting in person.

The costs of this proxy solicitation will be paid by the Company. The
Company has retained Georgeson Shareholder Communications Inc. to assist in the
solicitation of proxies for a fee of $7,500 and reimbursement of reasonable out-
of-pocket expenses. To the extent necessary, proxies may also be solicited by
officers and other employees of the Company in person, by telephone, or through
other forms of communication. Company personnel who participate in this
solicitation will not receive any additional compensation for such solicitation.
The Company will request record holders of shares beneficially owned by others
to forward this Proxy Statement and related materials to the beneficial owners
of such shares and will reimburse such record holders for their reasonable out-
of-pocket expenses incurred in doing so.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The information set forth below is based upon filings as of February 14,
2002 made by the listed entity with the Securities and Exchange Commission
("SEC"). Except as set forth below, no person is known to the Company to own
beneficially more than 5% of the outstanding shares of Common Stock:

Amount and
Nature of
Beneficial Percent of
Name and Address of Beneficial Owner Ownership Class
------------------------------------ --------- ----------

Barclays Global Investors, N.A........... 961,292/(1)/ 5.56%
Barclays Global Fund Advisors
45 Fremont Street
San Francisco, CA 94105

Dimensional Fund Advisors, Inc........... 1,213,700/(2)/ 7.0189%
1299 Ocean Avenue, 11/th/ Floor
Santa Monica, CA 90401

_____________

(1) According to a filing on Schedule 13G with the SEC dated February 14,
2002, Barclays Global Investors, N.A. has sole and dispositive voting
power over 809,858 shares, and Barclays Global Fund Advisors has sole
voting and dispositive power over 151,434 of these shares. According to
the filing, Barclays Global Investors, a bank as defined in Section
3(a)(6) of the Securities Exchange Act of 1934, is the parent holding
company of Barclays Global Fund Advisors, a bank as defined in Section
3(a)(6) of the Securities Exchange Act of 1934. The filer is deemed to be
the beneficial owner of the shares reported as a result of holding such
shares in trust accounts for the economic benefit of the beneficiaries of
those accounts.

(2) According to its filing on Schedule 13G with the SEC dated January 30,
2002, Dimensional Fund Advisors, Inc. ("Dimensional") has sole voting
power over all 1,213,700 of these shares, has no shared voting power over
any of these shares, and has sole dispositive power over all 1,213,700
shares reported.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of February 14, 2002, information
concerning the beneficial ownership of shares of Company Stock by (i) Directors,
(ii) the Company's Chief Executive Officer, (iii) the other executive officers
named in the executive compensation table set forth herein, and (iv) all current
directors and executive officers as a group. The following summary is based on
information furnished by the respective directors and officers. Unless
otherwise indicated, each person listed has sole investment and voting power
with respect to the shares indicated.

Amount and Nature of
Beneficial Options Percentage
Name of Beneficial Owner Ownership (1) (2) Exercisable(3) of Class
------------------------ ----------------- -------------- --------

James P. Giraldin.......................................................... 28,519 58,550 *
Douglas J. Goddard ........................................................ 10,017 6,375 *
Scott Gray ................................................................ 5,672 6,375 *
Christopher M. Harding .................................................... 9,938 4,000 *
Babette E. Heimbuch ....................................................... 361,900 36,900 2.09%
James L. Hesburgh ......................................................... 58,560 24,000 *
Shannon Millard ........................................................... 14,838 20,535 *
William S. Mortensen ...................................................... 104,908 16,000 *
William G. Ouchi .......................................................... 20,000 24,000 *
William P. Rutledge ....................................................... 5,100 24,000 *
Charles F. Smith .......................................................... 30,000 24,000 *
Steven L. Soboroff ........................................................ 1,750 4,000 *
John R. Woodhull .......................................................... 12,000 24,000 *
663,202 272,735

All Directors and Executive Officers as a Group (15 persons) .............. 935,937 5.42%

______________

* Less than 1%

(1) The number of shares shown for each person includes shares, if any,
held beneficially or of record by the person's spouse; voting and
investment power of the shares indicated may also be shared by
spouses.

(2) Includes, with respect to the named executive officers and all
executive officers as a group, shares held through the First Federal
Bank of California Employee Stock Ownership Plan and Trust. Also
includes, with respect to Mr. Giraldin, shares of restricted stock
which are subject to divestiture.

(3) Includes shares of Company Stock subject to options which are
exercisable within 60 days of February 14, 2002. The percentage of
outstanding shares owned by holders of stock options was computed
based upon the number of shares which would have been outstanding if
such options had been exercised.

PROPOSAL 1

ELECTION OF DIRECTORS

The Certificate of Incorporation of the Company provides that the Board of
Directors shall consist of not less than seven and not more than fifteen
Directors unless a greater number is fixed by the Board of Directors, that the
Directors shall be divided into three staggered classes as nearly equal in
number as possible, that each class of Directors shall be elected for the term
of three years and that one class of Directors shall be elected annually. The
class of Directors scheduled to be elected at the Annual Meeting is composed of
three Directors who will be elected to serve a three year term until the annual
meeting of stockholders in 2005 or until their successors are duly elected and
qualified. The nominees receiving the highest number of votes, up to the number
of Directors to be elected, are elected.

Set forth below are the names of the persons nominated by the Board of
Directors for election as Directors at the Annual Meeting, as well as all other
Directors, together with their ages, principal occupations and business
experience during the last five years, present directorships and the year each
first became a Director of the Bank and of the Company. All of the nominees are
presently Directors. If any nominees should be unable to serve as a Director,
the person or persons voting the proxies solicited hereby will select another
nominee in his or her place. The Company has no reason to believe that any of
the nominees will be unable or unwilling to serve if elected.

First
Position Held Became Term to
Nominees for Election Age With Company Director (1) Expire (2)
--------------------- --- ------------ ------------ ----------

William G. Ouchi 58 Director 1995 2005
William P. Rutledge 60 Director 1995 2005
Charles F. Smith 69 Director 1989 2005

Continuing Directors

James P. Giraldin (3) 49 Director, Senior Executive Vice
President, Chief Operating Officer 2002(3) 2004(3)
Christopher M. Harding 49 Director 1984 2003
James L. Hesburgh 68 Director 1975 2003
Babette E. Heimbuch 54 Director, Chairman of the Board(4),
President, Chief Executive Officer 1986 2004
Steven L. Soboroff 53 Director 1991 2003
John R. Woodhull 67 Director 1988 2004

_____________

(1) The date given is the earlier of the date such Director became a director
of First Federal Bank of California or a Director of the Company.

(2) Term of service if re-elected as a Director of the Company at the Annual
Meeting.

(3) On January 25, 2002, Mr. Giraldin was elected by the Board of Directors to
fill the vacancy on the Board that will be left by the retirement of
William S. Mortensen as Director of the Company, effective April 24, 2002.
The term of office for the class of directors to which Mr. Giraldin has
been elected expires in 2004.

(4) On January 25, 2002, Ms. Heimbuch was elected to serve as Chairman of the
Board effective upon Mr. Mortensen's retirement on April 24, 2002.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR NOMINEES
WILLIAM G. OUCHI, WILLIAM P. RUTLEDGE AND CHARLES F. SMITH

James P. Giraldin joined the Company in 1992 as Executive Vice
President/Chief Financial Officer. Prior to joining the Company, Mr. Giraldin
was Chief Executive Officer of Irvine City Bank for five years. He previously
served as Chief Financial Officer for two other savings and loan associations
and was a certified public accountant with KPMG LLP. Mr. Giraldin was appointed
Chief Operating Officer and Senior Executive Vice President of the Bank and FFC
in 1997. On January 25, 2002, Mr. Giraldin was elected by the Board of Directors
to fill the vacancy left by the retirement of Mr. Mortensen as a Director,
effective April 24, 2002. The term of office for the class of directors to which
Mr. Giraldin has been elected expires in 2004. Mr. Giraldin serves on the
Executive Board of the Santa Monica Boys and Girls Club.

Christopher M. Harding is a managing partner of the law firm of Harding,
Larmore, Kutcher & Kozal. He is active in numerous local civic groups, including
the Santa Monica Chamber of Commerce, YWCA, Santa Monica Boys & Girls Club, the
Santa Monica Youth Athletic Foundation and Upward Bound House. He has served as
a Director of the Bank since 1984, and of FFC since 1987.

Babette E. Heimbuch has been elected Chairman of the Board of Directors of
the Company and the Bank effective upon the retirement of William S. Mortensen
as a Director and as Chairman of the Board, to be effective April 24, 2002. Ms.
Heimbuch has served as Chief Executive Officer of the Bank and FFC since January
of 1997 and was Chief Operating Officer from 1989 to 1997. She joined the Bank
in 1982 as Senior Vice President, Chief Financial Officer. She was appointed
Executive Vice President in 1985, and was elected a Director of the Bank in
1986. In 1987 she was appointed Senior Executive Vice President of the Bank and
of FFC and was elected a Director of FFC. Prior to joining the Bank, Ms.
Heimbuch was employed by the accounting firm of KPMG LLP serving as the Audit
Manager assigned to the Bank. Ms. Heimbuch serves on the Board of Directors of
the Federal Home Loan Bank of San Francisco, America's Community Bankers and
Scope Industries. Ms. Heimbuch is on the Board of Advisors of the Santa Monica-
UCLA Medical Center.

James L. Hesburgh is President and Chief Executive Officer of James L.
Hesburgh International, Inc. Mr. Hesburgh is also a director of Roberts Sinto
Corporation, and Sinto America, Inc. He serves as a Trustee Emeritus of St.
John's Health Center in Santa Monica, California. Mr. Hesburgh also serves on
the Advisory Council of the Mendoza School of Business, University of Notre
Dame. He has served in senior management capacities with several major United
States corporations and specializes in international marketing and consulting.
Mr. Hesburgh has served as a Director of the Bank since 1975, and a Director of
FFC since 1987.

William G. Ouchi is the Sanford and Betty Sigoloff Professor in Corporate
Renewal for the John E. Anderson Graduate School of Management at the University
of California, Los Angeles. In 1993 Dr. Ouchi was appointed to serve as special
policy advisor to Los Angeles Mayor Richard J. Riordan, and from 1994 to 1995
was Mayor Riordan's Chief of Staff. Dr. Ouchi has written numerous books and
articles on business management and organization. Dr. Ouchi serves on the boards
of Williams College, KCET Public Television, LEARN and the Commission on
Presidential Debates. He is also a member of the Consumer Advisory Committee of
the United States Securities and Exchange Commission and of the Real Estate
Advisory Committee of the Trust Company of the West. Dr. Ouchi serves on the
Boards of Directors of Allegheny Technologies, Incorporated, EduVoice, Inc.,
Sempra Energy, and Water-Pik Technologies Incorporated. Dr. Ouchi became a
Director of the Bank and FFC in 1995.

William P. Rutledge was, until his resignation in March 1997, President and
Chief Executive Officer of Allegheny-Teledyne, Incorporated. He joined Teledyne
in 1986. Mr. Rutledge serves on the boards of AECOM, Computer Sciences
Corporation, Communications & Power Industries, Sempra Energy Corp., Lafayette
College and KCET Public Television, and is a Trustee of St. John's Health
Center. Mr. Rutledge became a Director of the Bank and FFC in 1995.

Charles F. Smith is president of Charles F. Smith & Company, Inc. He serves
as a Director of Trans Ocean Distribution Ltd., Anworth Mortgage Asset Corp.,
Worldwide Restaurant Concepts and St. John's Health Center. Mr. Smith became a
Director of the Bank and FFC in 1989.

Steven L. Soboroff is President of Playa Vista. He is Chairman Emeritus of
Big Brothers of Greater Los Angeles, Past President of the Recreation and Parks
Commission for the City of Los Angeles and the Senior Advisor to the Mayor of
Los Angeles. Mr. Soboroff has been a Director of the Bank and FFC since 1991.

John R. Woodhull was President and Chief Executive Officer of Logicon,
Inc., from 1969 to 1998. He serves on the boards of Emergent Information
Technologies, Inc., the Los Angeles Metropolitan YMCA and The Engineering
Advisory Council of the University of Colorado. He also serves on the Advisory
Board of Plast Equipment, Inc. Mr. Woodhull became a Director of the Bank and
FFC in 1988.

Directors' Compensation.

Directors of the Bank, including Directors who are officers of the Bank,
receive annual directors' fees of $15,000, and Directors who are not officers of
the Bank also receive annual fees of $15,000 for attending all regular meetings
of the Board. Members of the Executive Committee of the Board who are not
officers of the Bank receive $1,000 per month. Directors, excluding the Legal-
Audit Committee Chair, who are Chairs of Board Committees, receive $400 per
quarter. The Legal-Audit Committee Chair currently receives an annual retainer
of $10,620. Other members of the Legal-Audit Committee receive $600 per month.
Directors of FFC receive no separate compensation.

Pursuant to the First Federal Bank of California 1997 Nonemployee Director
Stock Incentive Plan, each nonemployee director receives an annual grant of
nonstatutory stock options to acquire 4,000 shares of Company Stock. The options
vest on the one-year anniversary of the grant date. During the year ended
December 31, 2001, each such director received options to acquire 4,000 shares
of Company Stock, at an exercise price of $31.4375 per share, the market value
of the Company Stock on the date of grant. For additional information regarding
the nonemployee directors stock option program, see the description below
entitled "Stock Option and Stock Appreciation Rights Plans."

William S. Mortensen will retire effective April 24, 2002 as a Director and
Chairman of the Board. The Board has appointed Mr. Mortensen to the newly-
created position of Chairman Emeritus, in recognition of his more than forty-
five years of service to the Bank. As Chairman Emeritus of the Bank, Mr.
Mortensen is entitled to receive annual fees of $77,800 until May 1, 2003, plus
reimbursement of certain travel-related expenses incurred during 2002. Effective
May 1, 2003, Mr. Mortensen will be entitled to receive annual fees of $40,800
for his services to the Bank. Additionally, as Chairman Emeritus Mr. Mortensen
will be entitled to continuation of health insurance benefits.

Committees of the Board of Directors.

The Company has standing Legal-Audit Executive Fair Lending/Community
Reinvestment Act ("CRA"), Compensation and Executive Committees.

The Legal-Audit Committee currently consists of Messrs. Smith (Chair),
Ouchi and Woodhull, all of whom are nonemployee directors. The Committee reviews
litigation and reports on various legal, accounting and auditing matters,
including the selection of the Company's independent auditors, the scope of
audit procedures, the nature of services performed by the independent auditors,
the performance of the Company's independent and internal auditors, its
accounting practices, and monitors the Company's legal and regulatory compliance
programs. The Legal-Audit Committee also prepares the Legal-Audit Committee
Report for inclusion in the Company's proxy statement. All members of the Legal-
Audit Committee are independent within the meaning of the rules of the New York
Stock Exchange. During the year ended December 31, 2001, the Legal-Audit
Committee held five meetings.

The Executive Fair Lending-CRA Committee held four meetings in 2001. Its
responsibilities include monitoring the Bank's Community Reinvestment Act
activities and ensuring that the Bank complies with all directives from the
Board of Directors. Members of the Committee are Former Bank Director June
Lockhart (Chair) and Officers Darin Nishimura (CRA Officer), Sean Conley, Scott
Gray, Donn Jakosky, Christine Larson, Ann Lederer, Shannon Millard, Jackie
Slayton (CRA Consultant), Kendon Studebaker, Cristina Toranzo and Diana Wright

The Compensation Committee, which held six meetings in 2001, currently
consists of Directors Hesburgh (Chair), Harding, Rutledge and Soboroff, all of
whom are nonemployee directors. This Committee administers the Company's salary
and other compensation programs. See "EXECUTIVE COMPENSATION - Report of Board
Compensation Committee."

The Executive Committee did not meet in 2001. The Executive Committee is
comprised of Directors Mortensen, Heimbuch, Hesburgh, Smith and Woodhull.

FFC does not have a standing nominating committee of the Board of Directors
(or another committee performing similar functions). The Bylaws of FFC provide
that only persons nominated in accordance with the procedures set forth
therein shall be eligible for election as Directors. Stockholder nominations
must be made pursuant to written notice received by FFC not less than 60 days
nor more than 90 days prior to the scheduled date of the Annual Meeting. Such
notice must state the nominee's name, age and address (business and
residence), the nominee's principal occupation or employment, and the class
and number of shares of Company Stock beneficially owned by the nominee on the
date of the notice. The required notice must also disclose certain information
relating to the nominee which would be required to be disclosed in a proxy
statement and in certain other filings under the federal securities laws. In
addition, the stockholder making the nomination must disclose his or her name
and address as they appear on FFC's books, the name and principal business or
residence address of any other record or beneficial stockholders known by the
nominating shareholder to support such nominee, and the class and number of
shares of Company Stock beneficially owned by the nominating shareholder and
any such supporting stockholders on the date of the notice.

Meetings of the Board of Directors. During 2001 there were eleven meetings
of the Board of Directors of the Bank and FFC. Each Director attended at least
75% of the aggregate number of such meetings and of the meetings of the
Committee on which he or she served during the period during which he or she
held a position on the Board.

Information Relating to Executive Officers. Set forth below are the names
and ages of the current executive officers of the Company, other than Ms.
Heimbuch and Mr. Giraldin, together with the positions held by these persons.

Name Age Title
---- --- -----
Douglas J. Goddard................. 49 Executive Vice
President/Chief Financial
Officer
Scott Gray......................... 57 Executive Vice
President/Chief Residential
Lending Officer
Christine D. Larson................ 51 Executive Vice
President/Retail Banking
Brad McCoy......................... 34 Executive Vice
President/Community Banking
Shannon Millard.................... 39 Executive Vice
President/Chief Credit
Officer

Douglas J. Goddard joined the Company in April, 1997. Previously, Mr.
Goddard served as Controller of California United Bank. He has held positions at
Security Pacific Bank, Community Bank, and KPMG LLP.

Scott Gray joined the Company in May, 1997. Formerly, Mr. Gray was the
Regional Vice President/Director of Comerica Bank's mortgage lending operations.
His previous experience also includes a position as Senior Vice President with
Frontline Mortgage Corp.

Christine D. Larson joined the Company in September of 2000. Previously,
she was employed by Sanwa Bank for over nine years, most recently as Senior Vice
President, Retail Product Management and Marketing. Prior to that position, Ms.
Larson was the Consumer and Mortgage Lending Manager and District Sales Manager
for Sanwa Bank. Her previous work experience includes management positions at
Union Federal Savings, California Federal, Bank of America and Crocker Bank. Ms.
Larson currently serves on the board of trustees of the St. Anne's Foundation.

Brad McCoy joined the Company in February of 2002. Prior to joining the
Company, Mr. McCoy was a founding partner of Revenuelab, a company that
specialized in sales effectiveness consulting and training, business development
and sales management. Previously, Mr. McCoy was with Wells Fargo for over nine
years, most recently as Senior Vice President/Division Manager of the Business
Banking Group.

Shannon Millard joined the Company in 1992. In 1994 she was promoted to her
current position of Executive Vice President/Chief Credit Officer. Ms. Millard
was formerly with the Bank of California for six years, most recently as the
Vice President in charge of Real Estate Services. Prior to that, Ms. Millard was
with Sumitomo Bank. Ms. Millard currently serves on the board of directors of
the Santa Monica YWCA.

EXECUTIVE COMPENSATION

The following SUMMARY OF COMPENSATION TABLE includes compensation for the
years ended December 31, 2001, 2000 and 1999 for services in all capacities
awarded to, earned by, or paid to the Company's Chief Executive Officer and the
four other most highly paid executive officers who were serving as executive
officers at the end of 2001 (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

Annual Compensation Long Term Compensation
------------------- ----------------------
Restricted Securities
Other Stock Underlying All Other
Salary Bonus Annual Award Payout Options Compensation
Name and Principal Position Year $ $ Compensation ($) (2) (#) ($) (3)
---------------------------- ---- - - ------------ --- --- --- --- ---

Babette E. Heimbuch .......... 2001 428,640 250,000 (1) - 0 - 11,850 16,622
President and Chief 2000 408,240 250,000 (1) - 0 - 23,950 21,282
Executive Officer 1999 392,520 180,559 (1) - 0 - 20,150 21,429

James P. Giraldin ............ 2001 319,920 223,075 (1) - 0 - 8,000 16,622
Chief Operating Officer 2000 304,320 175,000 (1) - 0 - 15,200 21,282
1999 276,720 114,562 (1) 24,250(4) 12,800 21,429

Douglas J. Goddard ........... 2001 172,320 60,000 (1) - 0 - 3,350 16,622
Chief Financial Officer 2000 165,120 54,902 (1) - 0 - 6,775 21,282
1999 158,760 44,453 (1) - 0 - 5,900 21,429

Scott Gray ................... 2001 179,220 50,000 (1) - 0 - 3,500 16,622
Residential Lending 2000 171,420 51,453 (1) - 0 - 6,775 21,282
1999 166,380 40,367 (1) - 0 - 5,900 21,429

Shannon Millard .............. 2001 213,600 80,000 (1) - 0 - 4,100 16,622
Chief Credit Officer 2000 204,000 71,400 (1) - 0 - 8,300 21,282
1999 194,640 68,124 (1) - 0 - 5,900 21,429

_________________

(1) Perquisites and other personal benefits to each officer did not exceed
the lesser of $50,000 or 10% of the total annual salary and bonus
reported for such officer.

(2) Based on the price at December 31, 2001 of $25.63 per share. The
aggregate restricted stock holdings at December 31, 2001 for the Named
Executive Officers consisted of approximately 3,474 shares worth
$114,668 at the then current market value, without giving effect to
the diminution of value attributable to the restrictions on such
stock. The number of restricted stock awards held by Mr. Giraldin, and
Ms. Millard at the end of the last fiscal year is 2,650 and 824
respectively. The value of all restricted stock awards at the end of
the last fiscal year based upon a stock price of $25.63 per share as
of December 31, 2001 is $67,919 and $21,119 for Mr. Giraldin and Ms.
Millard, respectively. Except as set forth below, no restricted stock
award vests in under three years from the date of grant. Dividends
will be paid on the restricted stock if and when paid on the Company
Stock. Stock dividends shall be subject to all of the restrictions
applicable to the restricted stock.

(3) Employee Stock Ownership Plan ("ESOP") contributions and contributions
by the Company under a matching program for the Company's plan
established pursuant to Section 401(k) of the Internal Revenue Code)
(the "401(k) Plan," as more fully described below).

(4) On February 24, 2000 Mr. Giraldin was awarded 2,000 shares of
restricted stock which vest over a two-year period. The award was made
as a bonus for services rendered during 1999. The amount shown is
based on the price of the Company Stock at the date of grant ($12.125
per share).

GRANTS OF OPTIONS IN 2001

Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Employees in Price Expiration Grant Date
Name Granted (#)(1) Fiscal Year ($/Share) Date Present Value ($)(2)
---- -------------- ----------- --------- ---- --------------------

Babette E. Heimbuch............. 11,850 12.47% 31.4375 1/25/2011 216,736
James P. Giraldin............... 8,000 8.42% 31.4375 1/25/2011 146,320
Douglas Goddard................. 3,350 3.52% 31.4375 1/25/2011 61,271
Scott Gray ..................... 3,500 3.68% 31.4375 1/25/2011 64,015
Shannon Millard ................ 4,100 4.31% 31.4375 1/25/2011 74,989
______________

(1) Options to purchase Company Stock were granted under the 1994 Stock Plan
(see below), which provides for the granting of options at an exercise price
equal to the fair market value of the Company Stock on the grant date. All
options granted become exercisable in installments beginning on the second
anniversary date of the date of grant, and becoming 100% vested on the sixth
anniversary date of the date of grant. The exercise price may be paid by
delivery of already owned shares, subject to certain conditions. All
options were granted for terms of 10 years, subject to earlier termination
in certain events related to termination of employment.

(2) Present value determinations were made using the Black-Scholes option-
pricing model. There is no assurance that any value realized by optionees
will be at or near the value estimated by the Black-Scholes model. The
estimated present values under that model are based on a ten-year holding
period, and on the following assumptions with respect to volatility and the
risk-free rate, forfeitures percentage and dividend yield. Based upon the
quarterly closing prices of the Company's common stock from December 31,
1990, until the grant date of January 25, 2001, the model calculated the
annualized volatility at 38.21%. For the risk-rate, the model uses the
yield on a ten-year treasury note on January 31, 2001 of 4.81%. For the
forfeiture percentage and the dividend yield, the model assumes zero.

AGGREGATED OPTION EXERCISES IN 2001 AND
YEAR-END OPTION VALUES

Number of Securities Value of
Underlying Unexercised In-the Money
Options at Options at
December 31, 2001 December 31, 2001
Name Shares Acquired Value Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable(2)
---- --------------- -------------------- ------------------------- ----------------------------

Babette E. Heimbuch ............ - 0 - - 0 - 24,430/78,320 314,827/744,328
James P. Giraldin .............. - 0 - - 0 - 45,607/60,143 790,093/668,380
Douglas J. Goddard ............. - 0 - - 0 - 2,460/19,965 21,942/172,491
Scott Gray ..................... - 0 - - 0 - 2,460/20,115 21,942/172,491
Shannon A. Millard ............. 1,000 24,110 16,315/31,881 249,474/353,232
_______________

(1) The value realized is the difference between the fair market value of the
underlying stock at the time of exercise and the exercise price.
(2) In accordance with the SEC's rules, an option is "in-the-money" if the fair
market value of the underlying shares exceeds the exercise price of the
option. The values shown are calculated by subtracting the exercise price
from the fair market value of the underlying Company Stock. For purposes
of this table, fair market value is based on the market value at December
31, 2001 ($25.63 per share).

401(k) Retirement Plan. The Company makes available to its employees the
opportunity to make tax-deferred contributions to a plan established under
Section 401(k) of the Internal Revenue Code (the "401(k) Plan"). Participants
are permitted to make contributions on a pre-tax basis up to the IRS limitation,
a portion of which is matched by the Bank. For contributions made during 2002,
one-half of an employee's contribution (up to six percent of the employee's
compensation capped at $11,000) will be matched, up to a maximum match of
$5,500. Contributions to the 401(k) Plan are not permitted to be invested in
Company Stock.

Supplemental Executive Retirement Plan. The Bank has adopted a Supplemental
Executive Retirement Plan ("SERP") covering the Chief Executive Officer and
Chief Operating Officer. The following table shows the estimated annual
benefits payable upon retirement at age 60 to participants in the SERP for the
indicated levels of average compensation and various periods of service,
assuming no future changes in such plan and based upon the current formula.

SERP TABLE

Benefits at Age 60:

Final Five Year Years of Service
Average Salary -------------------------------------------
and Cash Bonus 20 25 30 35 40
-------------- -------------------------------------------

$ 150,000 ....................................... 112,500 112,500 112,500 112,500 112,500
200,000 ....................................... 150,000 150,000 150,000 150,000 150,000
250,000 ....................................... 187,500 187,500 187,500 187,500 187,500
300,000 ....................................... 225,000 225,000 250,000 250,000 250,000
350,000 ....................................... 262,500 262,500 262,500 262,500 262,500
400,000 ....................................... 300,000 300,000 300,000 300,000 300,000
450,000 ....................................... 337,500 337,500 337,500 337,500 337,500
500,000 ....................................... 375,000 375,000 375,000 375,000 375,000
550,000 ....................................... 412,500 412,500 412,500 412,500 412,500
600,000 ....................................... 450,000 450,000 450,000 450,000 450,000
650,000 ....................................... 487,500 487,500 487,500 487,500 487,500
700,000 ....................................... 525,000 525,000 525,000 525,000 525,000
______________

*Social security payments do not reduce the amounts to be paid under the SERP.
Benefits under the SERP are reduced by Company-provided benefits under the
401(k) Plan.

Stock Option and Stock Appreciation Rights Plan. Options to purchase shares
of the Company's common stock are granted under the 1994 Stock Option and Stock
Appreciation Rights Plan ("1994 Stock Plan"). Other than the option grants
described above, no options were granted to the Named Executive Officers under
the 1994 Stock Plan during 2001.

Nonemployee directors of the Bank participate in the 1997 Nonemployee
Directors Stock Incentive Plan (the "Directors Stock Plan"). The Directors
Stock Plan permits the issuance of up to 400,000 shares of Company Stock.
Annual grants of 4,000 shares are made to each of the nonemployee directors.
All shares granted under the Directors Stock Plan vest on the first anniversary
of the grant date.

Certain Relationships and Related Transactions. The Bank offers mortgage
loans to officers and directors, solely for the purchase or refinance of such
officer's or director's residence. Loans to officers, directors and employees
are made in the ordinary course of business and, in the judgment of management,
do not involve more than the normal risk of collectability. Directors,
officers, and other employees of the Bank may obtain a loan under the Employee
Loan Benefit Program ("ELBP"). To qualify under the ELBP, all real estate and
home equity credit line loans are required to be secured by the employee's
residence. ELBP loans require ninety days of full-time employment with the
Company. All ELBP loans are made on substantially the same terms as those
prevailing at the time for comparable transactions with non-affiliated persons,
except for the interest rates and loan fees charged.

ELBP real estate loans are written as adjustable mortgage loans ("AMLs"), and,
for the first $450,000 of the loan amount, are modified while the person is
employed by the Company as follows: for the first three months of the loan, the
rate is approximately equal to (but not less than) the Bank's cost of funds
during the month prior to the loan approval. Thereafter, the interest rate
adjusts monthly to a rate approximately equal to the Federal Home Loan Bank's
Eleventh District Cost of Funds subject to a floor (currently 4.95%).

Indebtedness of Management

The following table sets forth amounts in excess of $60,000 in the aggregate
from directors and executive officers as of December 31, 2001. In each case the
Bank is the lender for a residential loan made under the ELBP secured by a deed
of trust on the residence of the executive officer or director. Ms. Millard also
has a home equity line of credit which was made in the ordinary course of
business, on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons, and which did not involve more than the normal risk of
collectability or present other unfavorable features.

LOANS TO DIRECTORS AND EXECUTIVE OFFICERS

Highest Balance Unpaid
Outstanding Balance Interest Rate
Name During 2001($) at 12/31/01($) at 12/31/01
---- --------------- -------------- --------------

Douglas J. Goddard ............. 273,644.77 269,238.67 4.950%
Christopher M. Harding ......... 1,181,250.00 795,755.56 5.114%
Babette E. Heimbuch ............ 332,811.39 319,650.68 3.628%
Christine Larson ............... 346,000.00 345,580.41 4.950%
Shannon A. Millard ............. 676,399.30 662,712.74 4.950%
Charles F. Smith ............... 1,400,000.00 984,176.19 9.734%

Employment Contracts, Termination of Employment and Change of Control
Arrangements. The Company has entered into change of control agreements with
certain of the Bank's management, including each of the Named Executive
Officers. These agreements were entered into in order to retain executives
during financial industry merger and acquisition transactions, provide a change
in control severance arrangement consistent with the peer group, and better
allow executives to concentrate on negotiating the best possible transaction
and, if such a transaction occurs, restructuring a merged entity under these
circumstances. If a "change of control" (as defined in the agreements) occurs
within the "change of control period" (as defined in the agreements) the
agreements will become effective. Upon becoming effective, the agreements
provide for employment terms of up to three years and for compensation and other
terms of employment at least as favorable as those during the twelve-month
period prior to the effective date. Each of the agreements also provides for
severance payments and other benefits in the event that the officer's employment
is terminated by the Bank other than for death, disability or "cause" (as
defined in the agreements) or by the officer for "good reason" (as defined in
the agreements). The agreements with the Named Executed Officers provide for a
severance payment equal to three times the executive's annual base salary, plus
bonus, plus amounts representing the value of additional retirement and other
benefits which would have accrued if the executive's employment had continued
for three additional years. These agreements also provide for continuation of
other benefits for a period of three years and for the payment, under certain
specific circumstances, of an additional amount to cover the federal excise tax
imposed on some "golden parachute" payments. Other than described above, the
Company has no employment agreements with any of the Named Executive Officers.

The Restricted Stock Bonus Plan described in the Report of the Compensation
Committee, below, the 1994 Stock Plan and the Directors Stock Plan provide for
accelerated vesting of rights in the event of certain change of control events.

REPORT OF THE COMPENSATION COMMITTEE
OF
FIRSTFED FINANCIAL CORP.

Decisions on compensation of the Company's executives are made by a four-
member Compensation Committee composed entirely of nonemployee directors. Set
forth below is the report submitted by Messrs. Hesburgh (chair), Harding,
Rutledge and Soboroff addressing the Company's compensation policies for 2001 as
they affected Ms. Heimbuch (the Company's Chief Executive Officer during 2001)
and the Company's other executive officers.

The Members of the Compensation Committee have the responsibility to
oversee the Company's various compensation plans, including its annual bonus
plan, restricted stock plan, stock option programs, ESOP, 401(k) Plan and annual
salary review. The Committee reviews compensation levels of all members of
management, including executive officers, evaluates their performance, and
considers officer succession and related matters. The Committee reviews with
the Board all aspects of compensation for officers at the level of vice
president or above, as well as reviewing bonus compensation for assistant vice
presidents.

Compensation Committee Interlocks and Insider Participation

No person who served as a member of the Compensation Committee was an
employee of the Company or any of its subsidiaries, was formerly an officer of
the Company or any of its subsidiaries, or had any relationship with the Company
or its subsidiaries requiring disclosure, except as specifically described in
this Proxy Statement.

Compensation Philosophy

The Compensation Committee's executive compensation philosophy is to
provide competitive levels of compensation, tie compensation levels and
individual compensation to the Company's operating performance and strategic
direction, and assist the Company in attracting and retaining talented
management by providing compensation reasonably comparable to that offered by
the Company's peer group.

The principal elements of the Company's executive compensation are base
salary, annual bonus, annual stock option awards and restricted stock awards.
Each of these elements are discussed below. In reviewing and making
recommendations as to overall levels of compensation, the Compensation Committee
also takes into account deferred and non-cash benefits, including ESOP benefits,
insurance and other benefits. Compensation has been and will continue to be
structured so as to be tax deductible. The Company has established a 401(k)
Plan for employee contributions with some matching employer contributions (see
more detailed discussion above).

In general, the Company's compensation programs have the overall goal of
ensuring that employees' interests are aligned with that of the Company as a
whole. At the senior officer level, this is achieved by rewarding performance
based upon measurable standards which are mutually determined by the officer and
senior management. Additionally, the incentive program for management consists
of a potential combination of cash bonus and stock options.

At each level of management (e.g., executive vice president, senior vice
president, etc.) a formula is established which allocates the cash bonus and
stock option potential awards as percentages of total base salary. The cash
bonus portion ranges from 15% to 50% of base salary, and is awarded based on
achievement of stated goals, with a moderate discretionary component. The stock
option awards for officers typically vest 20% on the second anniversary date
after the grant, an additional 40% on the fourth anniversary date, and the
remaining 40% on the sixth anniversary date.

Base Salary

Executive officer base salaries are initially determined, but not
established, by reference to the responsibilities and description of the
position and competitive marketplace for executive talent for the
responsibilities of the particular position. The Company's Human Resources
Department participates in, obtains information from, and analyzes the results
of salary and benefits surveys conducted annually by various banking and human
resource groups. The SNL Executive Compensation Review for Banks and Thrifts
("SNL Review") is considered an effective tool to initiate the Compensation
Committee review process since it utilizes information obtained from other banks
and thrifts throughout the United States. The Company has utilized the SNL
Review annually for over ten years. The Compensation Committee reviews the
results of the annual survey to ensure that the Company's salary grades and
benefits are comparable to those

provided by its peers. The Committee's goal generally is to be within the 75/th/
percentile of what it has determined to be the appropriate peer group as
reported in the SNL review.

Annual salary adjustments are determined by evaluating the performance of
the Company generally and the performance of each executive officer. In
general, annual salary adjustments to base salary for executive officers in 2001
ranged from 4 percent to 5 percent.

Annual Bonuses

A portion of the annual compensation of each officer is based upon the
performance of the Company, as well as the individual contribution of the
officer to the Company's performance. While corporate performance measures such
as net income, earnings per common share, return on stockholders equity and
return on average total assets are considered, the Committee does not apply a
specific quantitative formula in making compensation decisions. Non-financial
performance measures also may be included, such as product development,
efficiency, client relations and employee relations. No particular weight is
given to one factor over another among these performance measures. For 2001,
the Board considered, among other things, growth of the Company's assets, in
part resulting from the successful consummation of the acquisition of Del Amo
Savings Bank and Frontier State Bank by First Federal Bank of California,
resulting in four additional retail branch offices in the South Bay area of
Southern California. This acquisition adds approximately $200 million in assets
to First Federal's balance sheet. Other accomplishments of management during
2001 were significant increases in production in two critical business areas
(income property lending and SFR Lending); further reduction of the Bank's non-
performing assets ratio to a historically low level despite a faltering economy;
and continued control of expenses to a level below that of the Company's peers.
For years in which the Company's net earnings are significant, a large portion
of an executive officer's compensation may be determined by the Compensation
Committee at the end of each year based upon the officer's contribution to the
Company's performance during the year. For purposes of establishing the annual
bonus pool, the Company's performance is measured against earnings goals
established prior to the commencement of each fiscal year by the Board.

For 2001, the Compensation Committee established a pool of funds based upon
net earnings for the year of approximately $50.3 million, or $2.85 per diluted
share. The Committee attributed these positive results in large part to growth
in the Company's deposits, including significant growth in lower-cost
transaction accounts as well as the successful acquisition of two banking
institutions; increased volume in income property loans and SFR; maintenance of
high quality assets and a low non-performing assets ratio; and control of
expenses. Accordingly, the Committee awarded cash bonuses for 2001 to
management. Named Executive Officers Babette E. Heimbuch, James P. Giraldin,
Douglas J. Goddard, Scott Gray and Shannon Millard received cash bonuses of
$250,000, $223,075, $60,000, $50,000 and $80,000, respectively. Bonuses were
also paid to other employees and officers pursuant to parameters established by
the Compensation Committee and management.

Stock Options and Restricted Stock

The Compensation Committee believes that stock ownership by management and
employees and performance-based compensation arrangements in the form of Company
Stock are beneficial in ensuring that management's interest in the Company's
performance corresponds to those of the Company's stockholders. The
Compensation Committee also believes that stock ownership helps attract and
retain key executives. The Company awards stock options and restricted stock
grants in furtherance of this philosophy.

Awards of stock options typically are made annually to officers at the
level of assistant vice president and above. The awards are based upon a
standardized dollar value at each participating level of responsibility and
reflect the Compensation Committee's determination of the appropriate incentive
for the responsibilities of that particular officer level. Other stock option
awards may be made to officers of the Company from time to time.

In addition to stock options, as indicated above, restricted stock grants
may be made by the Compensation Committee as part of the Company's bonus program
restricted stock plan which has now expired. Some shares granted under that plan
remain outstanding and subject to vesting restrictions.

Executive Officer Compensation

Ms. Heimbuch was named Chief Executive Officer of the Company and the Bank
effective January 1, 1997. She has served as President since 1989. Recently,
she was elected to succeed Mr. Mortensen as Chairman of the Board

upon his retirement in April 2002. In reviewing Ms. Heimbuch's compensation as
Chief Executive Officer for 2001, the Compensation Committee looked at the
Company's overall financial health. In particular, the Compensation Committee
reviewed the Company's financial condition and results, progress in meeting
strategic objectives, and size and complexity compared to similarly-situated
publicly traded financial institutions. The Company's performance in 2001 met or
exceeded financial goals set under Ms. Heimbuch's management at the beginning of
the year. The achievement of these goals positively affected the performance of
the Company and was rewarded by stable earnings despite the volatile economy and
stock market fluctuations during 2001. The Committee also noted the efforts made
by Ms. Heimbuch in the exploration and analysis of suitable strategic
acquisition opportunities which resulted in the successful acquisition of two
financial institutions during 2001, as well as her leadership in the thrift
industry, including her participation and service on the Board of Directors of
the Federal Home Loan Bank Board, America's Community Bankers, and the Western
League of Savings Institutions (now merged with the California Bankers
Association). Ms. Heimbuch was awarded a cash bonus of $250,000, and her base
salary for 2002 was increased approximately 4.0 percent.

The level of Ms. Heimbuch's aggregate salary for 2001 was comparable to the
Company's performance ranking in relation to the peer groups (based on
geographic location, asset size and levels of Return on Average Assets) shown in
the SNL Review. The other benefits received by Ms. Heimbuch are set forth in
the Summary Compensation Table.

Compensation Committee:

James L. Hesburgh (Chair)

Christopher M. Harding

William P. Rutledge

Steven L. Soboroff

LEGAL-AUDIT COMMITTEE REPORT

The Board has appointed a Legal-Audit Committee consisting of three
directors. Each of the members of the Legal-Audit Committee is "independent" as
defined under the New York Stock Exchange's listing standards. The Board has
adopted a written charter with respect to the Legal-Audit Committee's roles and
responsibilities.

Among other things, the Legal-Audit Committee has the delegated authority
to provide independent, objective oversight of the Company's internal and
independent auditors and matters relating to accounting, financial reporting,
internal controls and auditing. Management has the primary responsibility for
the financial statements and the reporting process, including the systems of
internal controls. The Legal-Audit Committee periodically reviews the Company's
internal auditing, accounting and financial controls and policies governing
compliance with laws, regulations, rules of ethics and conflicts of interest.

In fulfilling its oversight responsibilities, the Legal-Audit Committee
reviewed and discussed the Company's audited financial statements for the fiscal
year ended December 31, 2001 with the Company's management and KPMG LLP, its
independent auditors. The Legal-Audit Committee also discussed with KPMG LLP the
matters required to be discussed by Statement on Auditing Standards No. 61
(Communications with Audit Committees). The Legal-Audit Committee has received
the written disclosures and the letter from KPMG LLP required by Independence
Standards Board Standard No. 1 (Independence Discussion with Audit Committees)
and the Legal-Audit Committee discussed the independence of KPMG LLP with that
firm.

In reliance on the reviews and discussions referred to above, the Legal-
Audit Committee recommended to the Board that, and the Board approved, the
audited financial statements be included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2001 for filing with the Securities
and Exchange Commission. The Legal-Audit Committee and the Board also have
recommended, subject to stockholder approval, the selection of KPMG LLP as the
Company's independent auditors for fiscal 2002.

Respectfully Submitted,

THE LEGAL-AUDIT COMMITTEE

Charles F. Smith, Chairman
William G. Ouchi
John R. Woodhull

Independent Auditors' Fees

The following table sets forth the aggregate fees billed for services
rendered to the Company for the fiscal year ended December 31, 2001 by KPMG LLP:

Audit Fees: $146,000
Financial Information Systems Design
And Implementation Services $ -
All Other Services:
Total All Other $ 28,000
--------
Total Fees: $174,000
--------

PERFORMANCE GRAPH

Set forth below is a stock performance graph comparing the yearly total return
on the Company Stock commencing with the closing price on January 1, 1997, with
(a) the cumulative total return on stocks included in the Industry Group 541 -
Savings and Loan Index, prepared and published by Media General Financial
Services, and (b) the cumulative total return on stocks included in the NYSE
Market Index, prepared and published by The New York Stock Exchange.

COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG FIRSTFED FINANCIAL CORP.,
NYSE MARKET INDEX AND PEER GROUP INDEX

[GRAPH APPEARS HERE]

ASSUMED $100 INVESTED ON JAN. 01, 1997
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31 2001

-----------------------------------------------------------------------------------------------------
12/31/1996 12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001
-----------------------------------------------------------------------------------------------------

FirstFed Financial 100.00 176.14 162.50 127.84 293.75 233.00
-----------------------------------------------------------------------------------------------------
Savings & Loans 100.00 168.14 147.39 118.49 192.07 204.19
-----------------------------------------------------------------------------------------------------
NYSE Market Index 100.00 131.56 156.55 171.42 175.51 159.87
-----------------------------------------------------------------------------------------------------

It should be noted that this graph represents historical stock price
performance and is not necessarily indicative of any future stock price
performance. The Company will not make or endorse any predictions as to the
future stock performance.

THE FOREGOING REPORTS OF THE BOARD COMPENSATION COMMITTEE AND THE BOARD
LEGAL-AUDIT COMMITTEE, AND THE PERFORMANCE GRAPH THAT APPEARS IMMEDIATELY AFTER
SUCH REPORTS, SHALL NOT BE DEEMED TO BE SOLICITING MATERIAL OR TO BE FILED WITH
THE SEC OR INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.

PROPOSAL 2

Appointment of Independent Auditors. KPMG LLP has been the independent
auditor of the Bank for more than twenty-five years and, upon recommendation of
the Legal-Audit Committee, has been appointed by the Board of Directors as the
auditor of the Company for 2002. The stockholders of the Company are requested
to ratify this appointment. A representative of KPMG LLP is expected to be
present at the Annual Meeting with the opportunity to make a statement if he or
she desires and to respond to appropriate questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE APPOINTMENT
OF KPMG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR 2002.

PROPOSAL 3

In accordance with the requirements of the Company's Restated Certificate
of Incorporation (the "Certificate"), the Company's stockholders are being asked
to approve an amendment to Article TENTH of the Certificate to require a vote of
at least eighty percent (80%) of the stockholder's votes, or a two-thirds vote
--
of the directors of the Company to amend Article III, Section 12 of the
Company's Bylaws (the "Proposed Certificate Amendment").

Currently, Article TENTH reads in its entirety as follows:

"TENTH: Bylaws. Bylaws may be adopted, amended or repealed by the
affirmative vote of the holders of at least eighty percent (80%)
of the total votes eligible to be cast at a meeting duly called
and held or by a resolution adopted by the Board of Directors,
including a majority of Continuing Directors (as defined in
Article SEVENTH)."

The Proposed Certificate Amendment would add the following language to Article
TENTH:

"provided, however, that any amendment to Article III, Section 12
-------- -------
of the Bylaws (or any re-numbered Bylaw provision dealing with an
age limitation for directors) shall require approval of at least
eighty percent (80%) of the total votes eligible to be cast at a
meeting duly called and held or by a resolution adopted by at
least two-thirds of the Board of Directors including a majority
of the Continuing Directors."

Article III, Section 12 of the Bylaws (hereinafter referred to as the "Directors
Age Limitation Bylaw") sets a mandatory retirement age for directors, and reads
in its entirety as follows:

"Section 12. Age Limitation. No person shall be eligible for
election, re-election, appointment or reappointment to the Board
of Directors if such person is then more than 73 years of age. No
director shall serve beyond the annual meeting of the Corporation
immediately following his or her attainment of 73 years. This
limitation shall not apply to a person serving as an advisory
director of the Corporation."

In January of 2002, the Board of Directors unanimously adopted a resolution
to amend the Directors Age Limitation Bylaw to increase the mandatory retirement
age for directors from age 70 to age 73. The purpose of this Bylaw amendment
was to prevent a dramatic change in the composition of the current Board which
the Board felt would be disruptive to the ongoing management of the Company.
Based on the current composition of the Board of Directors, if the previous
mandatory age limitation of age 70 had continued in effect, four directors of
the Company, out of a total of nine directors, would have a forced retirement
from the Board over the next two years. In order to prevent such disruption,
while maintaining a reasonable mandatory retirement age for directors, the Board
voted to amend the Directors Age Limitation Bylaw.

However, the Board continues to believe that a mandatory retirement age for
directors is appropriate and in the best interests of the Company and its
stockholders. The purpose of an age limitation is to ensure not only the
continuity of the Company's mission by staggering the retirement of its members,
but also to allow for the introduction of different points of view as new
members are elected to replace retiring directors. The purpose of the Proposed
Certificate Amendment is to discourage amendments to the Directors Age
Limitation Bylaw unless at least two-thirds of the Board finds that such an
amendment is justified and in the best interests of the Company and its
stockholders.

For stockholders to approve the Proposed Certificate Amendment, pursuant to
Section THIRTEENTH of the Certificate, a quorum must exist at the Annual
Meeting, and the affirmative vote of the holders of at least eighty percent
(80%) of the total votes eligible to be cast at a legal meeting shall be
required to be cast in favor of the Proposed Certificate Amendment.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE AMENDMENT
TO THE RESTATED CERTIFICATE OF INCORPORATION.

SECTION 16 (a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16 (a) of the Securities Exchange Act of 1934 requires executive
officers and directors and persons who beneficially own more than ten percent
(10%) of the Company's stock, to file initial reports of ownership and reports
of changes in ownership with the SEC and the New York Stock Exchange. Executive
officers, directors and greater than ten percent (10%) beneficial owners are
required by SEC regulations to furnish the Company with copies of all Section 16
(a) forms they file.

Based solely on its review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors,
the company believes that all section 16(a) filing requirements applicable to
its executive officers, directors and greater than ten percent (10%) beneficial
owners were satisfied.

STOCKHOLDER PROPOSALS

Any stockholder of the Company wishing to have a proposal considered for
inclusion in the Company's 2003 proxy solicitation materials must set forth such
proposal in writing and file it with the Secretary of the Company on or before
November 19, 2002. Stockholder proposals not included in the Company's 2002
proxy solicitation materials must, in order to be considered at the 2003 Annual
Meeting, be submitted in writing to the Secretary of the Company by no earlier
than January 28, 2003 nor later than February 28, 2003.

The Board of Directors of the Company will review any stockholder proposals
which are filed as required and will determine whether such proposals meet
applicable criteria for inclusion in its 2003 proxy solicitation materials for
consideration at the 2003 Annual Meeting.

ANNUAL REPORT

The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2001, including, but not limited to, statements of consolidated financial
condition and related consolidated statements of operations and comprehensive
earnings, stockholders' equity and cash flows for fiscal year ended December 31,
2001, 2000 and 1999, prepared in conformity with accounting principals generally
accepted in the United States of America, has been sent to stockholders. A copy
of the Annual Report on Form 10-K for year ended December 31, 2001 may be
obtained without charge by writing to the Secretary at the address indicated in
the following paragraph.

UPON WRITTEN REQUEST OF ANY STOCKHOLDER SOLICITED HEREBY, THE COMPANY WILL
PROVIDE FREE OF CHARGE A COPY OF ITS 2001 ANNUAL REPORT ON FORM 10-K WHICH HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS SHOULD BE
DIRECTED TO SECRETARY, FIRSTFED FINANCIAL CORP., 401 WILSHIRE BLVD., SANTA
MONICA, CALIFORNIA 90401.

By Order of the Board of Directors

Ann E. Lederer, Corporate Secretary

REVOCABLE PROXY
FIRSTFED FINANCIAL CORP.

[X] PLEASE MARK VOTES AS IN THIS EXAMPLE

Proxy for Annual Meeting--April 24, 2002

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Babette E. Heimbuch and James P. Giraldin, as
proxies, each with the power to appoint his/her substitute, and hereby
authorizes them to represent and to vote as designated herein all shares of
Common Stock of FirstFed Financial Corp. held of record by the undersigned on
March 4, 2002, at the annual meeting of stockholders to be held on April 24,
2002, or any adjournment thereof. A vote FOR nominees Ouchi, Rutledge and Smith,
and FOR Proposals 2, 3 and 4 is recommended by the Board of Directors.

With- For All
For held Except
1. ELECTION OF DIRECTORS (except as marked to [_] [_] [_]
the contrary below):

Terms as Directors expiring 2005:

William G. Ouchi, William P. Rutledge and Charles F. Smith

INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.

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For Against Abstain
2. Ratification of KPMG LLP as the Company's [_] [_] [_]
independent auditors for 2002.

3. To approve an amendment to the Certificate of [_] [_] [_]
Incorporation of the Company to require a
two-thirds vote of directors to change the retirement age for directors of
the Company.

4. In their discretion, the proxies are authorized to vote upon such other
business that may properly come before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE DIRECTORS NAMED IN PROPOSAL 1 AND FOR PROPOSALS 2, 3 AND 4.

Please sign exactly as your name appears on this card. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporation name, by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.

Please be sure to sign and date Date
this Proxy in the box below. _____________

_____________________________________________________
Stockholder sign above Co-holder (if any) sign above

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Detach above card mark, sign, date and mail using the enclosed
envelope provided.

FIRSTFED FINANCIAL CORP.
401 Wilshire Boulevard, Santa Monica, California 90401

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PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
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IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.

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