- The Washington Times - Monday, December 27, 2004

ASSOCIATED PRESS

Franklin D. Raines, who was forced out as Fannie Mae chief executive after five years, is slated to get a monthly pension of more than $114,000 for life, according to documents the mortgage lending giant filed yesterday with the Securities and Exchange Commission.

The documents also reveal that Mr. Raines has deferred compensation of $8.7 million to be paid out through 2020 and owns more than $5.5 million in Fannie Mae stock.

Federal regulators have asked Fannie Mae to hold off paying out any compensation to Mr. Raines until they have time to investigate the package, and whether it was appropriate for the federally chartered lender to let him retire early rather than dismiss him.

Another point of contention is Mr. Raines’ retirement date. According to the filing, “Mr. Raines has asserted” to Fannie Mae that his retirement is effective June 22 — enabling him to receive another $600,000 in salary and adding $100,000 to Mr. Raines’ post-retirement monthly payment. In the filing, Fannie Mae did not agree to those terms.

Mr. Raines was forced out Dec. 21 by Fannie Mae’s board of directors, along with Chief Financial Officer Timothy Howard.

According to yesterday’s filing, Mr. Howard will be paid $84,000 in salary through Jan. 31 and receive a monthly pension of $36,071 for the rest of his life. He has $4 million in deferred compensation and more than 480,000 shares in stock options, worth from about $27 per share to about $81.

The Office of Federal Housing Enterprise Oversight — the company’s chief regulator — pressured the board to force out the two men after the SEC said the company must make accounting corrections that could erase $9 billion in profits since 2001.

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