Freddie CEO: Executive pay changes must follow broader GSE reform
As Congress attempts to curtail executive pay, the outgoing CEO of Freddie Mac plans to testify that salaries at the government-sponsored enterprises must remain competitive with the private sector to retain quality and experienced talent. Charles "Ed" Haldeman and Fannie Mae Chief Executive Michael Williams will appear before the House Oversight and Government Reform Committee Wednesday to answer questions about the pay structures of the mortgage giants. Haldeman, who joined Freddie in August 2009 and recently announced plans to leave within a year, will tell the committee how the firm has already cut compensation for the top 10% of management by 40% since entering conservatorship in 2008. "It would be counterproductive to dramatically revise compensation absent broader secondary mortgage market reform," he will tell Rep. Darrell Issa, R-Calif., and the rest of the powerful committee. In prepared testimony, Haldeman will explain how the Federal Housing Finance Agency and Treasury Department expressed concerns to him about hiring an experienced staff to handle Freddie Mac's operations. "They emphasized that it was absolutely critical that we keep the machinery of the company running smoothly in order to support the recovery of the mortgage market and the national economy," according to Haldeman. "It was clear that if Freddie Mac suffered an exodus of our most highly experienced and talented employees, our ability to fulfill our top two objectives under conservatorship — making sure mortgage funds remained available and helping financially stressed families avoid foreclosure — would be greatly hindered." On Tuesday, the House Financial Services Committee voted 52-4 Tuesday to suspend bonuses for top executives at Fannie Mae and Freddie Mac. Write to Jason Philyaw. Follow him on Twitter: @jrphilyaw.