The bill to end the proposed $3 million pay hikes for the CEOs of Fannie Mae and Freddie Mac passed the House Financial Services Committee Wednesday, gaining a level of bipartisan support that suggests it has a solid chance in the Senate and perhaps in the White House.
The “Equity in Government Compensation Act of 2015,” introduced by Rep. Ed Royce, R-Calif., originally called for a limit to the salaries of Fannie Mae CEO Timothy Mayopoulos and Freddie Mac CEO Donald Layton of $255,000, but now caps their salaries at the current level of $600,000.
Rep. Maxine Waters, D-Calif., joined the Republicans in support of the bill with the addition of her amendment Tuesday.
The House Financial Services Committee voted 57-1 to advance Royce’s measure.
“Multimillion dollar paydays for the CEOs of Fannie and Freddie represent a failed grasp of reality on the part of both the GSEs and their regulator,” Royce said. “At a time when American families are still struggling, members of both parties clearly find it incomprehensible that the FHFA would authorize the taxpayer-backed GSEs to hand out $4 million compensation packages to their CEOs.”
Earlier this year, Federal Housing Finance Agency Director Mel Watt authorized the GSEs to propose new executive compensation plans for the position of CEO that may be as high as the 25th percentile of the market, or approximately $7.26 million a year.
This month, the GSEs announced that their CEOs would receive $4 million a year compensation packages, a dramatic raise from their current annual salaries of $600,000 from a cap set by former FHFA Director Edward DeMarco. The pay raise proposal received opposition from Democrats and Republicans alike.
The U.S. Department of the Treasury recently stated it "does not support FHFA’s new approach to CEO compensation at Fannie Mae and Freddie Mac and urged the agency to reject any increase."
White House Press Secretary Josh Earnest has also stated "I think it is entirely legitimate for the executives at those institutions to be subject to compensation limits," when asked about the White House's view on executive raises at the GSEs.