US approves million-dollar pay for bailed out execs
WASHINGTON — US officials unveiled pay packages for top executives at bailed-out housing finance giants Fannie Mae and Freddie Mac worth as much as six million dollars in a new step back from a clampdown on executive compensation.
Documents filed by the regulator for the two firms showed Fannie Mae chief executive Michael Williams and Freddie Mac CEO Charles Haldeman could each earn up to six million dollars per year, although some of that may depend on the performance of the companies and a portion will be deferred compensation.
Six other high-level executives at Fannie Mae and four others at Freddie Mac could earn over one million dollars, depending on performance,.
The regulator for the firms, which were seized by the government amid a meltdown in the housing market, said that even with the new pay levels, compensation for the top is executives is down 40 percent from before the firms were placed in government “conservatorship.”
Edward DeMarco, acting director of the Federal Housing Finance Agency, said these firms need competent executives since they play a role in funding three-fourths of all new residential mortgages.
“Policymakers ultimately will need to determine the future of the enterprises and the future structure of our housing finance system,” DeMarco said.
“As this debate progresses, it will be essential that the enterprises continue to perform their current role. The enterprises must attract and retain the talent needed to accomplish these objectives.”
The two firms are not subject to the limits on firms bailed out under the Troubled Asset Relief Program, which was passed by Congress after Fannie and Freddie were seized.
Firms receiving “exceptional” aid under TARP will see their executive salaries limited to 500,000 dollars annually in most cases, but some exemptions have been announced.
FHFA said it consulted with the TARP “pay czar” to come up with packages that include a base salary as well as a performance-based incentive and deferred salary.