Make us your home page
Instagram

Pay cap set for executives of mortgage giants Fannie Mae, Freddie Mac

WASHINGTON — The government is capping pay for Fannie Mae and Freddie Mac executives at $500,000 per year and eliminating annual bonuses, giving in to pressure from Congress to stop big payouts at the bailed-out mortgage giants.

The pay cap will apply to 70 executives at the companies, although not all of them will earn the top salary.

The pay and bonus structure of the government-controlled mortgage giants came under fire last fall after it was revealed that 12 executives got $35.4 million in salary and bonuses in 2009 and 2010. Fannie's chief executive, Michael J. Williams, received about $9.3 million for the two years. Freddie's chief executive, Edward Haldeman Jr., was paid $7.8 million.

Republican lawmakers welcomed the cap, noting that pay at mortgage companies should be more in line with government salaries. But administration officials said such limits will make it harder to attract talent because executives could earn far more in comparable jobs on Wall Street.

There's no start date in place for the cap. Haldeman and Williams will each be paid $5.4 million this year. But Haldeman and Williams are leaving their positions this year, and officials say the cap will be applied to their replacements' salaries.

The government rescued Fannie and Freddie three years ago after they nearly folded because of big losses on risky mortgages. Taxpayers have spent about $170 billion to prop up the companies, the most expensive bailout of the 2008 financial crisis.

Fannie and Freddie executives receive salaries, bonuses and other forms of compensation for their work, including deferred salary, which is tied to the company's performance and is usually paid after one year with the companies. Under the cap, Fannie and Freddie executives will be paid about 50 percent less than the median salary of comparable positions for big private financial firms, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, the government says.

Pay cap set for executives of mortgage giants Fannie Mae, Freddie Mac 03/09/12 [Last modified: Friday, March 9, 2012 9:39pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Tampa is 15th-most popular city to move to with U-Haul

    Markets

    TAMPA —Tampa is undoubtedly a destination point, at least according to U-Haul.

    Tampa is the No. 15 destination for people moving with U-Haul trucks. | Times file photo
  2. Florida's economy growing faster than other big states and far better than U.S. overall

    Business

    When it comes to economic growth, Florida's running alongside the leading states and well ahead of the United States as a whole.

  3. Westshore Marina District project takes shape with another acquisition

    Real Estate

    TAMPA — One of Tampa Bay's prime waterfront areas took another major step toward redevelopment Friday as WCI Communities bought 2.35 acres in Westshore Marina District.

    WCI Communities, Lennar's high-end subsidiary,has paid $2.5 million for 2.35 acres in the Westshore Marina District for 35 townhomes. WCI is under contract  to buy an additional 9.5 acres.
[BTI Partners]
  4. Posh Guy Harvey RV park to open in Tampa Bay with $250,000 cottages

    Business

    HOLIDAY — Love those Guy Harvey T-shirts with the soaring marlins? In the not too distant future, you might be able to kick back in your own Guy Harvey cottage in the first-ever Guy Harvey RV park.

    Renderings of the clubhouse and an RV cottage site of the planned Guy Harvey Outpost Club & Resort Tarpon Springs.
[Guy Harvey Outpost Collection]
  5. Port Tampa Bay secures $9 million grant to deepen Big Bend Channel

    Business

    Port Tampa Bay has secured a $9 million grant from the U.S. Army Corps of Engineers for the widening and deepening of the Big Bend Channel in southern Hillsborough County.