"Regulators have approved generous executive compensation at Fannie Mae and Freddie Mac, the taxpayer-backed mortgage finance giants, with little scrutiny or analysis, according to a report published Thursday by the inspector general of the Federal Housing Finance Agency. The companies, whose fates are to be decided by Congress this year, paid a combined $17 million to their chief executives in 2009 and 2010, the two full years when Fannie Mae and Freddie Mac were wards of the state, the report found. The top six executives at the companies received $35.4 million over the two years. Since Fannie Mae and Freddie Mac were taken over in September 2008, the companiesâ mounting mortgage losses have required a $153 billion infusion from taxpayers. Total losses may reach $363 billion through 2013, according to government estimates. Only on msnbc.com ID theft: 4,000 'kids' found with loans, gun licenses Nike goes to pot with Cheech & Chong shoe Libyan-Americans head home to fight Gadhafi Chinese man wakes up â minus his kidney Give a little, get a little: Toms Shoes finds niche Senators question FDA's response to tainted wipes Facebook problems? You may be a guinea pig Charles E. Haldeman Jr., a former head of Putnam Investments, the giant fund management concern, joined Freddie Mac as its chief executive in 2009. He made $7.8 million for 2009 and 2010. Fannie Maeâs chief is Michael J. Williams, who has worked at the company since 1991. He received $9.3 million for the two years. Company officials declined to comment. With hundreds of billions in government support necessary to keep the companies running, questions are arising about the nature of the pay packages and how performance goals are determined. Overpayments? The pay was approved by the housing finance agency, which is charged with conserving the assets of Fannie and Freddie on behalf of taxpayers. âF.H.F.A. has a responsibility to Congress and taxpayers to efficiently, consistently, and reliably ensure that the compensation paid to Fannie Maeâs and Freddie Macâs senior executives is reasonable,â said Steve A. Linick, the newly appointed inspector general of the agency, in a statement. âThis is especially true when you realize that the U.S. Treasury has invested close to $154 billion to stabilize Fannie Mae and Freddie Mac,â and they âare spending tens of millions of dollars for executive compensation.â The report cited a âlack of standardized evaluation criteria, documentation of management procedures and internal controlsâ at the oversight agency, missing steps that may have led to overpayments. For example, the inspector general said that taxpayer support of the companies may have made performance benchmarks easier to meet for executives. In 2009, Fannie Mae issued 47 percent of new mortgage-backed securities, far exceeding its goal of 37.5 percent. But, as the report noted, this hurdle was almost certainly cleared because the Federal Reserve purchased almost all the mortgage securities issued by Fannie and Freddie in 2009." more: http://www.msnbc.msn.com/id/42371364/ns/business-us_business
"Because shares of both Fannie and Freddie have little value, the companiesâ executive compensation consists solely of cash paid out in base salary, deferred salary and long-term incentive pay. But Brian Foley, a compensation consultant in White Plains questioned the characterization of the companiesâ incentive pay as long term, given that it is paid entirely within two years. âOne hundred percent of the compensation is paid for two-year performance and a fair portion of that is without regard to performance,â he said. âI understand the stock is worthless, but that doesnât mean you canât have cash on the table for a long period. If anybody needs to have good long-term performance, isnât it Fannie Mae and Freddie Mac?â "