It would appear that the chief executives managing Fannie Mae and Freddie Mac are in for a pay cut – a significant one at that.
"FHFA anticipates a substantial decrease in executive compensation when the new CEOs are hired," a spokeswoman for the regulator told National Mortgage News.
This week House Financial Services Committee chairman Spencer Bachus, R-Ala., signaled that he would support regulatory or voluntary efforts to reduce executive compensation at the GSEs. "The taxpayer-funded bailout of Fannie Mae and Freddie Mac is the biggest bailout in history,” he said. “Forcing taxpayers to fund these excessive salaries and bonuses just adds insult to injury.”
Fannie chief executive Michael Williams received $5.6 million in salary and incentive payments in 2010. Freddie CEO Charles Haldeman received $5.5 million, according to annual securities filings by the GSEs. Both CEOs are planning to step down this year.
The Wall Street Journal reported Tuesday that Freddie's board of directors may reduce its next CEO's compensation to a range of $250,000 to $500,000. Freddie Mac declined to comment.
Rep. Bachus wants a sharper cut in executive pay, however. He has sponsored a bill (H.R. 1221) that would cap GSE executive pay at $218,978 and ban all bonus or incentive compensation. The House Financial Services Committee approved the measure by a 54-4 vote in November.
