Fannie, Freddie CEOs to get up to $6M

NEW YORK (AP) — The two chief executives of Fannie Mae and Freddie Mac could get paid as much as $6 million for 2009, despite the companies’ dismal performances this year which cost taxpayers more than $100 billion. The Obama administration, meanwhile, says it is removing the $400 billion financial cap it will provide to Fannie Mae and Freddie Mac to keep the mortgage giants from failing.

Fannie’s CEO, Michael Williams, and Freddie CEO Charles “Ed” Haldeman Jr. each will receive $900,000 in salary, $3.1 million in deferred payments next year and another $2 million if they meet certain performance goals, according to filings with the Securities and Exchange Commission on Thursday.

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The pay packages were approved by the Treasury Department and the Federal Housing Finance Agency, which regulates Fannie and Freddie.

That pay is far less than what their predecessors earned. Former Fannie CEO Daniel Mudd received $10.2 million in 2008, and former Freddie CEO Richard Syron pocketed $13.1 million. Both executives were ousted when federal regulators seized the companies in September 2008. The federal government blocked exit packages for the pair worth up to $24 million.

Since then, Fannie and Freddie have needed $111 billion in taxpayer money to stay afloat, one of the most expensive aftershocks of the financial crisis.

News of the chief executives’ pay could spark new criticism about the government’s numerous bailouts, but that may be unfounded, said Mark Borges, principal with management consulting firm Compensia.

Mr. Haldeman and Mr. Williams each could command between $5 million and $10 million in a similar position in the private sector, Mr. Borges estimated, and without the notable challenges and public scrutiny they face at these companies.

“I doubt too many people would look at these jobs and say, ‘Gosh, I would love to go there for my next career move,’” Mr. Borges said. “The government is getting top-notch executives to solve problems that are not easy to solve.”

The bulk of their pay is also not guaranteed, Mr. Borges said, so these executives can’t pocket and run and must meet certain long-term goals or risk giving some of it back.

Freddie Mac’s board sets the performance goals for the chief executive, which won’t be disclosed until next year. Fannie Mae’s filing outlined its corporate goals including “being a recognized leader in the housing recovery,” ”protecting taxpayers,” and “managing risk more effectively.”

Fannie Mae and Freddie Mac declined to offer further details on CEO performance goals.

Public anger over Wall Street pay boiled over earlier this year. In response, the Obama administration imposed pay curbs on banks that received government bailouts. All the major banks have since repaid their federal money, largely to escape caps on executive pay.

Former Bank of America Corp. CEO Ken Lewis, for example, agreed to forgo his salary and bonus this year under pressure from the government. Last year, he pocketed more than $9 million in total compensation. Bank of America received $45 billion in government assistance, which it has since repaid.

Freddie Mac hired Mr. Haldeman, a former mutual fund executive, in July. At the time, the company disclosed his annual salary of $900,000 but did not disclose other incentive payments. In September, the company hired a new chief financial officer, Ross Kari, and said his pay package would be worth up to $5.5 million.

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