More Oversight of Pay Urged for Fannie Mae, Freddie Mac
The U.S. regulator of Fannie Mae and Freddie Mac (FMCC) should keep a closer watch on the salaries the two government-owned mortgage finance companies pay to senior executives, according to an auditor’s report released today.
“The agency’s lack of independent assessment limits its capacity to ensure that the costs associated with senior professional compensation are warranted,” the Federal Housing Finance Agency Office of Inspector General said in the report.
The two companies paid 90 executives a total of $92 million and paid another 2,000 senior professionals a total of $455 million in 2011, the report said. Median compensation to vice presidents was $388,000, while median pay for company directors was $205,300.
Fannie Mae and Freddie Mac have drawn almost $190 billion in taxpayer aid since they were taken into U.S. conservatorship in September of 2008 when investments in risky loans pushed them to the brink of insolvency. They’ve paid a combined $50 billion in dividends back to the U.S. Treasury.
Kelli Parsons, a spokeswoman for Fannie Mae (FNMA), said it’s “critical” for the company to pay competitive salaries.
“Our people are the reason for Fannie Mae’s significant progress, which is benefiting taxpayers,” Parsons said in an e- mailed statement. “A change in our ability to pay competitive salaries could stall or reverse this progress.”
The FHFA has frozen pay at the two companies and cut the annual pay of the chief executive officers by almost 90 percent to $600,000 each, from about $5 million.
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