Give them the punishment they so richly deserve! Measure it out in proportion to their wickedness. Pay them back for all their evil deeds! Give them a taste of what they have done to others…
Fannie, Freddie execs score $100 million payday
“The idea that Fannie Mae and Freddie Mac, which rely on taxpayer funding to stay afloat, must offer excessive bonuses to its executives to attract effective management strains credulity,” the letter said…
By Chris Isidore @CNNMoney November 15, 2011: 5:53 AM ET
NEW YORK (CNNMoney) — 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.
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.
That’s a total of $95.4 million, which will essentially be coming from taxpayers, who have been keeping the mortgage finance giants alive with regular quarterly cash infusions since the Federal Home Finance Agency (FHFA) took control of the companies in September 2008.
Fannie CEO Michael Williams and Freddie CEO Charles Halderman, each received about $5.5 million in pay for last year, and they could receive more when their final deferred compensation for 2010 is set. All the executives receive a significant portion of their pay in the year or years after they earn it.
The CEOs’ pay targets for 2011 are about $6 million a piece, though Halderman might not get much of that money since he’s announced plans to leave Freddie sometime in 2012. He must still be at the company in order to receive the deferred compensation. His base pay for 2011 is $900,000, with most of the rest of his compensation coming in deferred payments.
The salary filings were all made by the companies in early 2011, but received relatively little attention until a recent report by Politico, the political news Web site, which highlighted about $12.8 million in bonuses the executives received for last year.
That published report sparked a political firestorm on Capitol Hill that could lead to legislation to put strict limits on pay at the two firms. But it only told part of the story. The full extent of salary, deferred pay and bonuses are only found in the filings.
Rep. Spencer Bachus, the chairman of the House Financial Services Committee, has scheduled a vote in his committee Tuesday on his own legislation that would suspend the compensation packages of top executives at the firms.
“The fact that the top executives of these failed companies are receiving multi-million dollar pay packages, plus millions more in bonuses, is an added insult to the taxpayers who are forced to foot the bill,” Bachus said in a statement announcing plans to hold the vote.
The Democrat-controlled Senate Banking Committee also plans to hold a hearing on the matter on Tuesday. Additionally, the Republican-controlled House Committee on Oversight and Government Reform is set to call Edward DeMarco, the acting director of FHFA, and the CEOs of the two firms, to a hearing on the pay packages on Wednesday.
Sixty senators from both parties have already sent a letter to DeMarco asking that he change the compensation policy of the two companies. FHFA has final say on pay at the two companies.
“The idea that Fannie Mae and Freddie Mac, which rely on taxpayer funding to stay afloat, must offer excessive bonuses to its executives to attract effective management strains credulity,” the letter said.
DeMarco responded to the senators saying that the executives who were running the companies in 2008 when the problems occurred have left without any golden parachutes, and that effective management is needed to make sure that taxpayer losses at the firms do not rise and the companies continue to function. He said current executive pay at the firm is about 40% less than before the bailouts.
“I need to ensure that the companies have people with the skills needed to manage the credit and interest rate risks of $5 trillion worth of mortgage assets and $1 trillion of annual new business that the American taxpayer is supporting,” he wrote.
Spokespeople for Fannie and Freddie declined to comment ahead of the hearings.
The latest cost estimate from FHFA is that the two bailouts will end up with a net cost to taxpayers of about $124 billion through 2014, though that figure could rise as high as $193 billion. Even the lower cost estimate will make it the most expensive bailout of the financial crisis — far more costly than bailing out the nation’s banks or automakers.
The CEOs and the other top executives at Fannie and Freddie get all their pay in cash, and none of it in company stock , which is generally deemed worthless.
The company filings that disclosed the pay back in February also defended the pay based on the work they had done.
Fannie’s filing said that under Williams’ leadership, the company “made solid progress in managing credit losses on its pre-2009 book of business, acquired a 2010 book of business with a strong credit profile that is expected to be profitable, and achieved substantial progress in making the company more operationally disciplined and efficient.”
Isaiah 14:20-21 (Septuagint)
As a mantle stained with blood cannot be clean: for the same cause neither canst thou be clean. Because thou hast destroyed this land of Mine, and hast slain this My people; thou shalt not be of long continuance. Wicked seed, prepare thy sons for slaughter, for the sins of their fathers; that they may not rise and possess the land, and fill the world with wars…