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Fannie, Freddie worker bonuses total $210M

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AreaCode707

Lifer
Sep 21, 2001
18,425
45
91
Please lock if repost. I searched.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/04/03/national/w094816D91.DTL

Mortgage finance giants Fannie Mae and Freddie Mac plan to pay more than $210 million in bonuses through next year to give workers the incentive to stay in their jobs at the government-controlled companies.

The retention awards for more than 7,600 employees were disclosed in a letter from the companies' regulator released Friday by Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee. The companies paid out nearly $51 million last year, are scheduled to make $146 million in payments this year and $13 million in 2010.

"It's hard to see any common sense in management decisions that award hundreds of millions in bonuses when their organizations lost more than $100 billion in a year," Grassley said in a statement. "It's an insult that the bonuses were made with an infusion of cash from taxpayers."

Fannie and Freddie declined to comment on Friday. Fannie had disclosed that it plans to pay four top executives at least $1 million each in retention payments that run through February. Freddie has yet to report on which executives are in line for the awards.

The two companies, hobbled by skyrocketing loan defaults, were seized by regulators last fall and operate under close federal oversight with new chief executives installed by the government. Since the takeover, Fannie Mae has received $15 billion in federal aid, while Freddie Mac has received nearly $45 billion.

The companies' federal regulator, James Lockhart of the Federal Housing Finance Agency, defended the bonuses in a March 27 letter to Grassley, noting that the collapse of the company's stock prices "destroyed years of savings for many" workers. The companies' stocks now trade below $1, down from more than $60 in fall 2007.

Lockhart denied a request Grassley made last month to release names of employees receiving at least $100,000 in bonuses, citing "personal privacy and safety reasons."

More than 70 percent of new loans in recent months have been backed by Fannie and Freddie. They own or guarantee almost 31 million mortgages worth about $5.5 trillion, more than half of all U.S home loans.

Keeping the companies "operating at full speed was best for the housing markets and best for the economy," Lockhart wrote. "That would only be possible is we retained the Fannie and Freddie teams."

But many lawmakers have little sympathy for that argument amid a public outcry over roughly $165 million in bonuses paid out last month by bailed-out insurance giant American International Group.

Earlier this week, the House passed a bill that aims to keep bailed-out financial institutions from paying their employees hefty bonuses after lawmakers had second thoughts about their vote two weeks ago to tax the bonuses away. The bill would allow the bonuses if the Treasury Department and financial regulators determine they are not "unreasonable or excessive."

Initially after the AIG flap, President Barack Obama had said he would "do everything we can to get those bonuses back." But the White House later backed down as it worked to ensure any restrictions on bonuses didn't alienate the banks and investors needed to help clean up the financial mess.
So there's yelling and screaming about $165mil from government-invested AIG but little notice of $210mil by government-run Freddie and Fannie? Just continues to prove that the rabid reaction to this whole bonus thing is based on knee-jerk vindictive, panicked or overall emotional response rather than factual and sensible business decisions.

Companies offer bonuses as part of compensation packages in order to hire and retain good employees. Politicians reacting to public hysteria indiscriminately change operating procedure with no understanding of what they're doing or what impact they have; that is the worst possible way I can imagine to run a company that hopes to achieve success out of ruin.
 

brandonbull

Diamond Member
May 3, 2005
5,942
793
126
The idiot Dems looked for scapegoats once their plan of donor rewarding was discovered. They knew about the AIG contract before they approved the money but tried to slip that past the US taxpayers. If they can do that to the AIG people, you better believe they will do it to anyone.
 

AreaCode707

Lifer
Sep 21, 2001
18,425
45
91
Originally posted by: Moonbeam
Good, I also tip my prostitute.
That is a very kind thing to do, as it makes a nice parallel between her daddy issues and her need to ask daddy for allowance money.

/Moonbeam

:):p
 

WHAMPOM

Diamond Member
Feb 28, 2006
7,628
181
106
Originally posted by: AreaCode707
Please lock if repost. I searched.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/04/03/national/w094816D91.DTL

Mortgage finance giants Fannie Mae and Freddie Mac plan to pay more than $210 million in bonuses through next year to give workers the incentive to stay in their jobs at the government-controlled companies.

The retention awards for more than 7,600 employees were disclosed in a letter from the companies' regulator released Friday by Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee. The companies paid out nearly $51 million last year, are scheduled to make $146 million in payments this year and $13 million in 2010.

"It's hard to see any common sense in management decisions that award hundreds of millions in bonuses when their organizations lost more than $100 billion in a year," Grassley said in a statement. "It's an insult that the bonuses were made with an infusion of cash from taxpayers."

Fannie and Freddie declined to comment on Friday. Fannie had disclosed that it plans to pay four top executives at least $1 million each in retention payments that run through February. Freddie has yet to report on which executives are in line for the awards.

The two companies, hobbled by skyrocketing loan defaults, were seized by regulators last fall and operate under close federal oversight with new chief executives installed by the government. Since the takeover, Fannie Mae has received $15 billion in federal aid, while Freddie Mac has received nearly $45 billion.

The companies' federal regulator, James Lockhart of the Federal Housing Finance Agency, defended the bonuses in a March 27 letter to Grassley, noting that the collapse of the company's stock prices "destroyed years of savings for many" workers. The companies' stocks now trade below $1, down from more than $60 in fall 2007.

Lockhart denied a request Grassley made last month to release names of employees receiving at least $100,000 in bonuses, citing "personal privacy and safety reasons."

More than 70 percent of new loans in recent months have been backed by Fannie and Freddie. They own or guarantee almost 31 million mortgages worth about $5.5 trillion, more than half of all U.S home loans.

Keeping the companies "operating at full speed was best for the housing markets and best for the economy," Lockhart wrote. "That would only be possible is we retained the Fannie and Freddie teams."

But many lawmakers have little sympathy for that argument amid a public outcry over roughly $165 million in bonuses paid out last month by bailed-out insurance giant American International Group.

Earlier this week, the House passed a bill that aims to keep bailed-out financial institutions from paying their employees hefty bonuses after lawmakers had second thoughts about their vote two weeks ago to tax the bonuses away. The bill would allow the bonuses if the Treasury Department and financial regulators determine they are not "unreasonable or excessive."

Initially after the AIG flap, President Barack Obama had said he would "do everything we can to get those bonuses back." But the White House later backed down as it worked to ensure any restrictions on bonuses didn't alienate the banks and investors needed to help clean up the financial mess.
So there's yelling and screaming about $165mil from government-invested AIG but little notice of $210mil by government-run Freddie and Fannie? Just continues to prove that the rabid reaction to this whole bonus thing is based on knee-jerk vindictive, panicked or overall emotional response rather than factual and sensible business decisions.

Companies offer bonuses as part of compensation packages in order to hire and retain good employees. Politicians reacting to public hysteria indiscriminately change operating procedure with no understanding of what they're doing or what impact they have; that is the worst possible way I can imagine to run a company that hopes to achieve success out of ruin.
Are you gonna add last year's Bear Stearns, Lehman Brothers, Goldman Sachs and Morgan Stanley Thirty Billion $bonus to that? One bank instituted a $302.00 a minute executive bonus plan.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
When it comes down to it, you pay your people who make money, money. If not then somebody else will hire them. You're seeing it already at US banks, good people are getting siphoned off to foreign banks. AIG is facing a huge brain drain right now.

The banks and other financial companies played a little game. They got tax and income advantages by paying workers a smaller base salary with a large bonus. Now that the game is over they're just upping the salaries. Look at what BOA did this week.

Your average VP at an i-bank in NYC was making 125k base salary. That's about 60k anywhere else in the country. They should realistically be paid far more than that, especially given the work put in. BOA is upping VP base to 200K, Director base to 250k, and MD base to 300k+.

Naturally, the politicians know this, but they would prefer to stoke the populist fires to get more votes and to distract the people from what's really happening.
 

scruffypup

Senior member
Feb 3, 2006
371
0
0
Originally posted by: LegendKiller
When it comes down to it, you pay your people who make money, money. If not then somebody else will hire them. You're seeing it already at US banks, good people are getting siphoned off to foreign banks. AIG is facing a huge brain drain right now.

The banks and other financial companies played a little game. They got tax and income advantages by paying workers a smaller base salary with a large bonus. Now that the game is over they're just upping the salaries. Look at what BOA did this week.

Your average VP at an i-bank in NYC was making 125k base salary. That's about 60k anywhere else in the country. They should realistically be paid far more than that, especially given the work put in. BOA is upping VP base to 200K, Director base to 250k, and MD base to 300k+.

Naturally, the politicians know this, but they would prefer to stoke the populist fires to get more votes and to distract the people from what's really happening.
+1 in addition to using it to get votes and as a distraction, it is also a thing to point at to grab more power and telling the citizens it is for their protection.
 
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