Fannie, Freddie Executives Get Big Payday

By DAMIAN PALETTA and JAMES R. HAGERTY

The top regulator for Fannie Mae and Freddie Mac is expected to announce millions of dollars in pay packages for top executives at the government-run mortgage-finance titans, people familiar with the matter said.

The Federal Housing Finance Agency approved compensation plans for Fannie Chief Executive Michael Williams and Freddie CEO Charles Haldeman Jr. Those packages are expected to be in a range of $4 million to $6 million, people familiar with the matter said. The companies are expected to spell out pay details for their top executives in securities filings Thursday morning.

The Christmas Eve announcement is likely to provoke a fresh round of controversy concerning the federal government's role in propping up the two companies. Taxpayers have pumped more than $100 billion of capital into both firms to keep them from collapsing amid huge losses stemming from falling home prices and mortgage defaults.

Representatives of both Fannie and Freddie declined to comment Wednesday evening.

Regulators and company officials went back and forth on how the pay could be structured, in part because executives didn't want to be paid in the companies' low-value stock.

Government and company officials struggled with another issue: It was difficult to tie compensation to the firms to long-term performance, because the long-term picture for the companies remains unclear. These decisions could prove controversial, because the Obama administration has urged many companies to tie executive pay to long-term performance.

FHFA officials consulted with the Treasury Department's pay czar, Kenneth Feinberg, who doesn't have direct authority over the pay structure at these firms. The FHFA declined to comment.

Separately, the Obama administration, in the next few days, is expected to announce a new financial commitment by the federal government to both Fannie and Freddie as a signal to the markets that the government stands by both the companies.

Fannie and Freddie are places that politicians of both parties put their friends and gave them a lot of money when they aren't in office, just like Rahm Emanuel did from 2000-2001.

The White House knows it can't get approval for more TARP money through Congress, so the administration is going to double the commitment to Fannie and Freddie from $400 billion to $800 billion, and then they can use the money to buy up more toxic assets from the banks. With no Inspector General. No independent oversight. But they have to do it by December 31, because after that it requires congressional approval, which will never happen. So, if you're going to stop it, you have to do it in the next six days. Not a lot of time, especially given the media black hole between Christmas and New Years.

Of course, if it's just corrupt when Republicans do it, but fine if it's your BFF, no worries.