A dozen housing executives are about to take a massive paycut.
The Associated Press reported that the salaries of the top 70 employees at Fannie Mae and Freddie Mac will be limited to $500,000 per year and bonuses will be eliminated. In 2009 and 2010 the top 12 executives at the government-sponsored enterprises collectively earned $35.4 million in bonuses and salary, with Fannie CEO Michael Williams and Freddie CEO Edward Haldeman receiving $9.3 million and $7.8 million, respectively, for the two-year stretch.
The executives’ compensation has come under fire from members of Congress who complain the pay packages are inappropriate for organizations that benefited from the largest taxpayer bailout, $170 billion, in 2008. There’s no start date in place for the revised compensation, and in 2012 the CEOs will each be paid $5.4 million. They previously announced they would be stepping down at the end of the year.
Edward DeMarco, the director of the Federal Housing Finance agency that oversees Fannie and Freddie, has defended the old salaries and bonsuses, saying they are needed to retain talented executives, without whom, taxpayers would suffer greater losses. [AP]