Amendment requires pay for senior executives to be comparable to other federal banking regulators.
Washington (DC) – November 16, 2011 – (RealEstateRama) — Yesterday, the House Financial Services Committee approved an amendment sponsored by Congressman Al Green (TX-09) that would target executive compensation abuses at Fannie Mae and Freddie Mac by requiring that the pay of their senior executives be similar to that of other federal banking regulators.
The amendment was cosponsored by Congressman Spencer Bachus (AL-06), Chairman of the House Financial Services Committee, and approved as part of the Equity in Government Compensation Act of 2011 (H.R. 1221) which would suspend current compensation packages for Fannie Mae and Freddie Mac senior executives. The House Financial Services Committee approved H.R. 1221 by a vote of 52-4.
Earlier this month, the Federal Housing Finance Agency announced that Fannie Mae’s CEO, Michael Williams, was paid $5.6 million in compensation and that Freddie Mac’s CEO, Charles Haldeman, received $5.4 million. Additionally, on November 1st 2011, the Federal Housing Finance Agency (FHFA) announced it had approved $12.79 million in bonus pay for ten executives who are employed by Government Sponsored Enterprises (GSEs).
H.R. 1221 would suspend the current pay packages for the Government Sponsored Enterprises top executives and would also place the rest of its workforce on the same pay scale used for other federal employees.
Congressman Al Green’s amendment revises the bill so that, instead of paying executives at General Schedule (GS) and Senior Executive Service (SES) scale, Fannie and Freddie have the option to use pay systems similar to other regulatory agencies in accordance with section 1206 of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). Under Congressman Green’s amendment, the top executives of Fannie and Freddie could only earn currently no more than $255,000 this year.
“My amendment ensures that the pay of senior executives at the GSEs is set in accordance with an incentive compensation law that has worked for existing banking regulators for over 20 years. It gives the GSEs the flexibility to offer competitive salaries for financial professionals within reasonable limits established under law,” indicated Congressman Green.
Yesterday’s Full Committee approval of H.R. 1221 sends the bill to the House floor for further consideration.
Alvaro ‘Al’ Ortiz (Press Secretary)
Office Phone: (713) 383-9234
E-mail: Alvaro.Ortiz (at) mail.house (dot) gov