Spotlight on big paychecks at Fannie and Freddie, again
By Aaron Smith
NEW YORK (CNNMoney) — Government housing agencies Fannie Mae and Freddie Mac are in the spotlight once again for fat paychecks.
A report released Monday by a government watchdog reveals the top 90 employees, excluding the CEOs, received an impressive $92 million in pay last year at Fannie and Freddie — companies that are propped by taxpayer money.
Top employees’ pay remained at stratospheric levels even though overall compensation declined after bonuses were eliminated last year, according to the Inspector General of the Federal Housing Finance Agency, which supervises and regulates Fannie and Freddie.
The median paycheck of the top 23 executives at Fannie and Freddie totaled $1.72 million in 2011, a 9% decline from the previous year. The next 62 executives took home $723,000, a decline of 5%. Even high-ranked federal government employees don’t make close to these numbers, which are more comparable to top salaries in the private sector.
“There’s a lot at stake for our country and it is absolutely critical that Fannie Mae compensation is competitive in the market for financial services talent,” said Fannie spokeswoman Kelli Parsons, in a prepared statement.
Freddie was not immediately available for comment.
Executive compensation for Fannie and Freddie has fallen under heightened scrutiny after the two companies lost billions of dollars when the housing bubble burst. Both companies were the largest buyers of home mortgage loans in the U.S. and have been criticized for lax standards during the housing boom. Their losses were borne by taxpayers when the companies were taken over by the government in September 2008.
The inspector general said the Treasury has invested $187.5 billion in Fannie and Freddie, as of Sept. 30, “thereby enabling them to remain solvent and continue their operations.”
The report didn’t include pay of either entity’s CEOs, who had their salaries capped last year at $600,000 each. In prior years, each CEO made more than $5 million a year.
Big payouts also extended to vice presidents and directors. The 333 vice presidents took home $388,000, while its 1,650 directors made $205,300.
The report focused on the highest-paid employees at the two companies, which employ a total of 11,900 workers.
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