House committee votes to suspend bonuses at Fannie, Freddie
The House Financial Services Committee voted 52-4 Tuesday to suspend bonuses for top executives at Fannie Mae and Freddie Mac.
Rep. Spencer Bachus (R-Ala.) sponsored the Equity in Government Compensation Act, H.R. 1221, which aligns Fannie and Freddie salaries under the same guidelines at federal regulatory agencies. The bill does not make them federal employees.
The CEOs of Fannie and Freddie made a $900,000 base salary in 2010, and both received roughly $2.3 million in bonuses for performance, according to Securities and Exchange Commission filings earlier this year. The top 10 executives at the firm received a combined $13 million in performance bonuses.
Fannie and Freddie currently owe the Treasury Department $151.7 billion in dividend payments tied to their continued bailouts.
Under the Bachus bill the CEOs would have earned $218,978 in 2010.
Reps. John Campbell (R-Calif.), Luis Gutierrez (D-Ill.), Mel Watt (D-N.C.), and Stephen Lynch (D-Mass.) voted against the bill.
"The taxpayer-funded bailout of Fannie Mae and Freddie Mac is the biggest bailout in history," Bachus said. "Adding insult to injury, the top executives of these failed companies receive multi-million dollar pay packages, all courtesy of American taxpayers who are having a difficult time making ends meet these days."
FHFA Acting Director Edward DeMarco, approved more than $42 million in pay packages for the top 12 executives at the GSEs, according to Bachus.
DeMarco defended the pay structures before the Senate Banking Committee Tuesday. He said the executives responsible for the disintegrations are "long gone," and salaries — which are already down 40% — are necessary to retain talent.
Freddie CEO Charles "Ed" Haldeman said recently he would be stepping down within a year. He and Fannie CEO Michael Williams will appear before another House committee Wednesday.
"These lavish compensation packages and bonuses are unfair, unreasonable and unjust to the taxpayers whose assistance is the only thing keeping Fannie and Freddie afloat," Bachus said.
Write to Jon Prior.
Follow him on Twitter @JonAPrior.
Don’t miss out: get HW delivered via email
- Current Chg.
- NASDAQ 3498.97 33.722 ^ixic
- S&P 500 1669.16 2.87 ^gspc
- Volatility Index 13.37 0.35 ^vix
- KBW Mort. Financial Index 32.91 -0.23 ^mfx
- MSCI US REIT Index 1070.38 6.97 ^rmz