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Barney Asks Regulator to Pull Fannie, Freddie Bonuses
Retention bonuses for senior executives at Fannie Mae and Freddie Mac should be canceled or recouped, House Financial Services Committee Chairman Barney Frank told the companies' federal regulator. The public insists "rightfully" that large bonuses to executives at companies receiving government aid must stop, Frank, a Massachusetts Democrat, said in a letter to Federal Housing Finance Agency Director James Lockhart today. Fannie Chief Executive Officer Herb Allison defended the payouts in an e-mail to employees, and said he discussed their concerns with regulators that canceling retention agreements is "a breach of faith." The decision is left to Lockhart, who approved the retention bonus program in September, and defended it two days ago as being "reasonable and well thought-out." Lockhart will be up against a national "firestorm" over executive compensation fanned by the $165 million American International Group Inc. paid in bonuses last week after taking $173 billion in bailout funds. Fannie, seized by regulators in September, awarded a total of $4.4 million in retention bonuses to four top executives in 2008, under plan designed by FHFA to keep employees from defecting after the government takeover. The Senate plans to vote next week on levies for corporate bonuses after the House of Representatives yesterday approved a 90 percent tax on bonuses at companies receiving bailout funds. Legislation reclaiming their bonuses "would jeopardize" Fannie's ability to fulfill President Barack Obama's housing directive, Allison said. The legislation would interfere with the company's ability to implement the administration's Homeowner Affordability and Stability Plan "that so many of you have been working nights and weekends to carry out," he said. Posted by: Fred 2009-03-21 |
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