Baker: Fannie Bonuses $245M Over '98-'03

Fannie Mae paid its executive team $245 million in bonuses from 1998 through 2003, according to Rep. Richard Baker, R-La., who released data showing that the top 23 Fannie executives received $12.4 million in bonuses in 2002.The release of the bonus and other compensation data by the House Financial Services GSE subcommittee chairman was part of a drama played out at an Oct. 6 hearing examining allegations by the Office of Federal Housing Enterprise Oversight that Fannie officials made an accounting decision in 1998 to hit their earnings target so that the executives could collect their bonuses. Fannie chairman and chief executive Franklin Raines denied that there was any linkage between the accounting decisions and compensation. "The OFHEO report does not cite any documents or witnesses to support the allegations," he said. However, the compensation data released by Rep. Baker show that Fannie executives generally get bonuses equal to or greater than their annual salaries (excluding options and other compensation). Mr. Raines insisted that the compensation information OFHEO provided to Rep. Baker should not be released. "It is confidential and protected by laws of the United States," he said. But Rep. Barney Frank, D-Mass., said it is "entirely appropriate" to release the information and commented that Fannie, as a government-sponsored enterprise, should not be paying such bonuses. "At the level of compensation you get, we ought to be able to count on you to do your very best," Rep. Frank told Mr. Raines.