Rank and file workers at the Federal Housing Finance Agency, Fannie Mae and Freddie Mac this week were told that there will be no “merit salary” increases in 2012, according to a memo provided to National Mortgage News.
The memo, which sources say was written by Fannie CEO Michael J. Williams, adds: “It is important to note that the salary freeze does not apply to potential increases for employees who are promoted or have substantial changes to the scope of their roles and responsibilities.”
It notes that the freeze “does not impact our ability to award long-term incentive compensation.”
A spokeswoman at Fannie did not return a media inquiry about the memo, but a source at Freddie Mac – which was told the same thing – confirmed its contents.
“Phil Laskawy and I have had numerous discussions with FHFA and the Board of Directors over the past several weeks in an effort to achieve a different outcome,” writes Williams. “I can tell you that Acting Director DeMarco, Phil, and our Board are sympathetic to our position, and recognize our need to compensate employees fairly. While I am disappointed with the outcome, I respect the Director's decision and appreciate the external factors that led to it.” Laskawy is Fannie's chairman.
In November the House Financial Services Committee overwhelmingly approved a bill to slash top executive salaries at the two GSEs to just more than $200,000 annually. The bill also would eliminate bonuses that sometimes surpass $1 million and would place employees on a federal pay scale.
