Government backed mortgage firms Fannie Mae and Freddie Mac — formally known as Federal National Mortgage Association (OTC:FNMA) and Federal Home Loan Mortgage Corp (OTC:FMCC) , respectively — are apparently catching on to the cost-cutting crazy that seems to be fashionable in Washington right now. The companies will not offer new CEOs the lush compensation deals previously available.
Fannie Mae and Freddie Mac regulators said Tuesday that new executive teams are unlikely to receive the controversial, multi-million dollar pay packages given to predecessors.
“[We] anticipate a substantial decrease in CEO compensation when the new CEO’s are hired,”a spokeswoman told CNNMoney.
That’s probably not some kind of philosophical statement about executive compensation. Fannie and Freddie required more than $100 billion in bailouts thanks to the mortgage crisis, but somehow leadership got huge bonuses even while taxpayers were propping up the ailing businesses.
Specifically current Fannie and Freddie CEOs Michael Williams and Ed Haldeman raking in about $6 million a piece across 2011, though some of that is admittedly in deferred compensation. Still the total has many outraged.
Even more galling: At least $95 million has gone to pay packages for top executives since the billions in bailouts started flowing into Fannie and Freddie.
Both Williams and Haldeman plan to step down in the coming weeks.
Edward DeMarco, acting director of the Federal Housing Finance Agency that oversees the two government-backed housing entities, defended these payouts as necessary to retaining top executives. But apparently that’s not the case anymore.
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