Research

Fannie And Freddie Executives Continue To Receive Millions in Bonuses

Susan McFarland, New CFO Of Fannie Mae, Received A $1.7 Million Signing Bonus. “House Republicans are pointing out that Fannie Mae’s new chief financial officer shares something in common with a newly drafted pro football player — both landed signing bonuses. Susan McFarland received $1.7 million for joining the mortgage giant that continues to lose billions of dollars after three years in government conservatorship, according to a draft report from the House Oversight and Government Reform Committee, which is holding a hearing into compensation practices at Fannie Mae and Freddie Mac Wednesday.” (Josh Boak, “Fannie CFO’s signing bonus: $1.7 Million,” Politico, 11/16/11)

• A Fannie Spokeswoman Calls This A “Standard Approach.” “‘This is a standard approach to these situations in the financial services industry, where many executives receive equity grants as part of their compensation,’ said Fannie spokeswoman Amy Bonitatibus.” (Josh Boak, “Fannie CFO’s signing bonus: $1.7 Million,” Politico, 11/16/11)

Fannie And Freddie Executives Are Awarding Over $12 Million In Bonuses To Ten Executives For Meeting “Modest Performance Targets.” “The Federal Housing Finance Agency, the government regulator for Fannie and Freddie, approved $12.79 million in bonus pay after 10 executives from the two government-sponsored corporations last year met modest performance targets tied to modifying mortgages in jeopardy of foreclosure.” (Josh Boak and Joseph Williams, “Fannie Mae, Freddie Mac Executives Get Big Housing Bonuses,” Politico, 10/31/11)

The Bonuses Come After Fannie And Freddie Have Received Nearly $170 Billion In Taxpayer Aid. “The executives got the bonuses about two years after the federally backed mortgage giants received nearly $170 billion in taxpayer bailouts — and despite pledges by FHFA, the office tasked with keeping them solvent, that it would adjust the level of CEO-level pay after critics slammed huge compensation packages paid out to former Fannie Mae CEO Franklin Raines and others.” (Josh Boak and Joseph Williams, “Fannie Mae, Freddie Mac Executives Get Big Housing Bonuses,” Politico, 10/31/11)

• Freddie Mac CEO Ed Haldeman Received A $2.3 Million Bonus On Top Of His $900,000 Salary. “Securities and Exchange Commission documents show that Ed Haldeman, who announced last week that he is stepping down as Freddie Mac’s CEO, received a base salary of $900,000 last year yet took home an additional $2.3 million in bonus pay.”  (Josh Boak and Joseph Williams, “Fannie Mae, Freddie Mac Executives Get Big Housing Bonuses,” Politico, 10/31/11)

Nearly $100 Million Of Fannie And Freddie’s Bailout Went To “Lucrative Pay Packages For Top Executives.” “Mortgage finance giants Fannie Mae and Freddie Mac received the biggest federal bailout of the financial crisis. And nearly $100 million of those tax dollars went to lucrative pay packages for top executives, filings show.” (Chris Isidore, “Fannie, Freddie Execs Score $100 Million Payday,” CNN Money, 11/15/11)

• In 2009 And 2010, Fannie’s Top Five Executives Received $33.3 Million And Freddie’s Received $28.1 Million. “The top five executives at Fannie Mae received $33.3 million in 2009 and 2010, while the top five at Freddie Mac received $28.1 million. And each company has set pay targets of as much as $17 million for its top managers for 2011.”  (Chris Isidore, “Fannie, Freddie Execs Score $100 Million Payday,” CNN Money, 11/15/11)

Fannie And Freddie Executives Are Getting Bonuses Despite Having Received Billions In Bailout Money and Requesting Even More Aid

Fannie And Freddie Have Received $170 Billion In Taxpayer Bailout. “Fannie and Freddie have received about $170 billion in taxpayer support over the past three years and recently requested an additional $14 billion, sums that indicate a comparison with pay in the private sector is misguided, the report charges.” (Josh Boak, “Fannie CFO’s signing bonus: $1.7 Million,” Politico, 11/16/11)

Freddie Mac Has Requested $6 Billion More In Government Aid. “Government-controlled mortgage giant Freddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter. Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter.” (Derek Kravitz, “Freddie Mac Reports Q3 Loss, Asks For $6B In Aid,” The Associated Press, 11/3/11)

• “This Quarter's $6 Billion Request From Taxpayers Is The Largest Since April 2010.” (Derek Kravitz, “Freddie Mac Reports Q3 Loss, Asks For $6B In Aid,” The Associated Press, 11/3/11)

Now Congressional Democrats Are Beginning To Feel “Scorned”

“The Executives At Troubled Mortgage Giants Fannie Mae And Freddie Mac Have Very Few Friends On Capitol Hill These Days.” (Peter Schroeder, “Dems Turn On Fannie, Freddie, And Back Bill Slashing Pay,” The Hill’s “On The Money,” 11/15/11)

House Democrats Feel “Scorned” By Fannie And Freddie Bonuses, Support Slashing Pay. “Several Democrats on the House Financial Services Committee said they felt scorned by the recent slew of bonuses handed out to top executives at the government-sponsored enterprises (GSEs), reversing course Tuesday and backing legislation that cracks down on current pay practices at the agency. Several members cited the recent decision to hand out nearly $13 million in bonuses to ten executives at the agency as the reason for the change of heart.” (Peter Schroeder, “Dems Turn On Fannie, Freddie, And Back Bill Slashing Pay,” The Hill’s “On The Money,” 11/15/11)

• Rep. Barney Frank (D-MA): Bonuses Show “An Insensitivity That Changed My Mind.” “Rep. Barney Frank (D-Mass.), the ranking member of the panel who voted against the bill when it was considered at the subcommittee level in April, said the bonuses ‘showed an insensitivity that changed my mind. I hoped that they would use restraint on their own,’ he said.” (Peter Schroeder, “Dems Turn On Fannie, Freddie, And Back Bill Slashing Pay,” The Hill’s “On The Money,” 11/15/11)
• Rep. Maxine Waters (D-CA): The Fannie And Freddie Bonuses Are “A Slap In The Face.” “Rep. Maxine Waters (D-Calif.), who also opposed the bill in April, called the bonuses a ‘slap in the face.’” (Peter Schroeder, “Dems Turn On Fannie, Freddie, And Back Bill Slashing Pay,” The Hill’s “On The Money,” 11/15/11)

Yet Obama Has Remained Silent About The Large Bonuses, Even Though Campaigning Against Them In 2008

“[T]he White House So Far Has Remained Largely Silent About Comparable Bonuses At Fannie Mae And Freddie Mac.” (Josh Boak and Joseph Williams, “Fannie Mae, Freddie Mac Executives Get Big Housing Bonuses,” Politico, 10/31/11)

• Obama Was Troubled By Fannie And Freddie Handing Out “Multimillion-Dollar Severance Packages” To Top Executives, While On The Campaign Trail. OBAMA: “I've always said that any action with respect to Fannie Mae and Freddie Mac needs to put taxpayers first and can't under any circumstances bail out shareholders or senior management of that company -- those companies. As a consequence, I'm troubled by the news reports that the outgoing CEOs of Fannie and Freddie may be in line to receive multimillion-dollar severance packages as part of the Treasury plan.” (Senator Barack Obama, Press Conference, Riverside, OH, 9/9/08)

                Click To Watch Obama Attack Fannie And Freddie Bonuses In 2008