WASHINGTON (AP) - The government says it will cap pay for Fannie Mae and Freddie Mac chief executives at $500,000 per year and eliminate annual bonuses for all employees. The changes come after Congress pressured the government to stop big payouts at the bailed-out mortgage giants.
The Federal Housing Finance Agency, the government agency that oversees Fannie and Freddie, also said Friday it would cut pay for roughly 50 other executives at the two companies. Those employees are still eligible to earn salaries above the cap.
The pay and bonus structure of the government-controlled mortgage giants came under fire this fall after it was revealed that 12 executives got $35.4 million in salary and bonuses in 2009 and 2010. Fannie's chief executive, Michael J. Williams, received about $9.3 million for the two years. Freddie's chief executive, Edward Haldeman Jr., was paid $7.8 million.
Republican lawmakers welcomed the cap, noting pay at mortgage companies should be more in line with government salaries. But administration officials said such limits will make it harder to attract talent because chief executives could earn far more in comparable jobs on Wall Street.
There's no start date in place for when the cap will be instituted. Haldeman and Williams will each be paid $5.4 million this year.
But Haldeman and Williams are leaving their positions this year and officials say the cap will be applied to their replacements' salaries.