Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Federal Home Loan Mortgage Corp (OTCBB:FMCC) are at the center of a standoff between the Whitehouse and a number of lawmakers. Over proposed compensations packages for the current executives. According to SEC filings, the compensation package has already been approved by the regulator of the two mortgage companies.
$4Million in Compensation
Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) CEO, Timothy Mayopoulos and Donald Layton of Freddie Mac stand to pocket at least $4million annually, up from the current annual salaries of $600,000. The regulator maintains that the package is essential for attracting and retaining talent.
The proposed pay package is still low compared to $6 million that the executive of the two companies could accrue before the financial crisis. The Obama administration has objected the pay rise reiterating that taxpayers continue to bear the burden of the government bailing out Fannie Mae and Federal Home Loan Mortgage Corp (OTCBB:FMCC).
The Federal Housing Finance Agency, which oversees Freddie Mac and Fannie Mae operations, maintains that the current executive compensation package limits the ability to develop a reliable succession plan. Fannie Mae and Federal Home Loan Mortgage Corp (OTCBB:FMCC) CEO Mayopoulos in support of the agency maintains that the proposed pay package still falls short of what other executives are being paid in the industry.
Resentment from Senate
Members of the House and Senate have already complained about the pay package led by Senator Mark Warner. However, Fannie Mae and Federal Home Loan Mortgage Corp (OTCBB:FMCC) Chairman Egbert L.J. has echoed the need to carry out the pay rise if the firm is to continue growing by retaining the talent that has seen it through from the financial crisis.
The FHFA approved the pay rise on condition that it stays below the 25th percentile of what executives at Capital One Financial Corp and U.S Corp are paid. The pay packages according to the agency are expected to play a role in maintaining efficiency and stability at Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Federal Home Loan Mortgage Corp (OTCBB:FMCC).
