Will There Be Outrage Over Fannie & Freddie Bonuses???
Posted by: acm in Fannie Mae, Freddie Mac, bonuses, tags: bonuses, Fannie Mae, Freddie MacGuess we will see if Congress gets as outraged about Fannie and Freddie bonuses as they did with AIG. But I will be surprised if they do. It seems they have two different agendas when it comes to public corporations and Fannie Mae and Freddie Mac.
According to The Wall Street Journal …
In a compensation program that has drawn angry protests from politicians, Fannie Mae and Freddie Mac expect to pay about $210 million in retention bonuses to 7,600 employees over 18 months, according to a letter from the mortgage companies’ regulator to Sen. Charles Grassley.
The maximum retention bonus for any individual executive under the plan will total $1.5 million during the 18 months ending in early 2010, according to the letter, which provides previously undisclosed details about the bonuses. The regulator, James Lockhart, director of the Federal Housing Finance Agency, said in a letter to the Iowa Republican senator that about $51 million of the payouts were made in late 2008 and that the rest are to be made this year and early next year.
In the letter, a copy of which was made available to The Wall Street Journal, Mr. Lockhart defends the bonuses as vital to retaining talent at the two companies, the main providers of funding for U.S. home mortgages. Fannie and Freddie, which reported combined losses of about $108 billion for 2008, are being propped up by capital infusions from the U.S. Treasury.
Everyone has known for two weeks that these bonuses were going to be paid out. Retention bonuses. Explain to me, why do we want to retain the people who caused this economic meltdown to begin with?
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