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I thought...

Texan

Well-known member
...Obama was going to do away with some of these overpaid FATCAT BANKER CEO's?

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Fannie, Freddie CEOs May Receive $6 Million for 2009

December 24, 2009, 01:10 PM EST

By Jody Shenn

Dec. 24 (Bloomberg) -- Fannie Mae Chief Executive Officer Michael Williams and Freddie Mac CEO Charles Haldeman Jr. are each eligible for compensation of as much as $6 million this year, the companies said today in regulatory filings.

Pay at the mortgage-finance companies, which were seized by the U.S. in September 2008, added to debate over salaries for executives at companies dependent on government bailouts. Compensation must be sufficiently high to “attract and retain” top talent, their regulator, the Federal Housing Finance Agency, said in a statement.

Fannie Mae and Freddie Mac have tapped $111.6 billion in aid from the government, as the Obama administration made them the centerpiece of its efforts to revive the housing markets. The companies are “government agencies in all but name now,” making the pay excessive compared with that of federal officials, said Bert Ely, chief executive officer of Ely & Co.

“It’s not clear to me what justifies the high salaries of the CEOs, but also the commensurately higher salaries for the lower-level folks” at the companies, Ely, a banking consultant in Alexandria, Virginia, said today in an interview.

In addition to the CEO pay, 10 additional executives at the two companies are eligible collectively for $30.1 million in compensation for this year.

Overall, pay for top executives of the mortgage-finance companies is down 40 percent from before they were seized, the regulator said in a statement.

Daniel Mudd, Fannie Mae’s CEO at the time it was seized, received $12.2 million in salary, bonuses and stock in 2007.

Brian Faith, a Fannie Mae spokesman, and Michael Cosgrove, a Freddie Mac spokesman, declined to comment.

Future Role

The future role of the entities, which now serve both as public companies and instruments of government housing policy, has yet to be determined, Edward J. DeMarco, acting director of the FHFA, said in the agency’s statement.

“As this debate progresses, it will be essential that the enterprises continue to perform their current role,” DeMarco said. “The enterprises must attract and retain the talent needed to accomplish these objectives.”

The agency “sought the guidance of” Kenneth Feinberg, President Barack Obama’s special master on executive pay, before approving the compensation packages, DeMarco said.

Feinberg didn’t have veto power, as he does over compensation of senior executives at certain companies dependent on U.S. aid through the Treasury Department’s Troubled Asset Relief Program such as General Motors Co. and American International Group Inc.

‘Consistent With’ Feinberg

The Treasury issued a statement saying the Fannie Mae and Freddie Mac compensation was “consistent with” principles established by Feinberg, such as making the majority of compensation “payable over time and subject to ‘clawback,’” or recouping earlier pay, under certain circumstances.

Lawmakers have protested pay at banks that received government support. Feinberg should be given the power to recover “outrageous” bonuses of AIG executives who failed to return them to the company as promised, Senator Charles Schumer, a New York Democrat, said in an interview to be aired this weekend on Bloomberg Television’s “Political Capital with Al Hunt.”

Washington-based Fannie Mae, which has lost $120.5 billion over the last nine quarters, has requested $60.9 billion from the Treasury Department this year. McLean, Virginia-based Freddie Mac has tapped $50.7 billion in government capital since November 2008 and recorded $67.9 billion in cumulative losses over the last nine quarters amid a three-year housing slump.

‘Performance Metrics’

Fannie Mae was unchanged at $1.05 at 1 p.m. in New York Stock Exchange composite trading. Freddie Mac fell 5 cents, or 3.8 percent, to $1.26. The government now holds almost 80 percent of the equity in each company.

The pay packages for Williams and Haldeman each include target incentive awards of $2 million. The executives also can get $3.1 million each in deferred salary. Those amounts will only be paid over time, with the approval of the companies’ boards and FHFA, if the companies meet “performance metrics” and the executives remain at the firms, the regulator said.

Haldeman’s compensation will be pro-rated to reflect his July hire, while the pay for Williams will be adjusted based on his promotion in April from chief operating officer.

Freddie Mac Chief Operating Officer Bruce M. Witherell, its second-highest paid executive, has target compensation of $4.5 million, pro-rated to his hiring in August. Fannie Mae Chief Financial Officer David M. Johnson would be paid $3.5 million.

Since shortly before the government seized Fannie Mae, eight of its top 11 executives have left, FHFA said. That includes Mudd, now head of Fortress Investment Group LLC. All four of the highest Freddie Mac executives have departed, including CEO Richard Syron.



http://www.businessweek.com/news/2009-12-24/fannie-freddie-ceos-may-receive-6-million-for-2009
 
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