Compensation Packages Released

The new heads of Fannie and Freddie will receive a large portion of their income from the performance of the companies they lead.

By: Melanie Wilson Government regulators have released a preliminary statement outlining the salary and fringe compensation packages that the new chiefs of Freddie and Fannie will receive. They will each likely receive more than $1 million in salary and bonuses. James Lockhart, chairman of the Federal Housing Finance Agency, confirmed the amounts during a question and answer session with lawmakers on the House Financial Services Committee. That hearing was the first regulatory oversight hearing since the government seized control of the giants on September 7th. Mr. Lockhart's testimony was similar in content to his testimony before the Senate Banking Committee on Tuesday. The new chief executives, Herbert Allison of Fannie Mae and David Moffett of Freddie Mac, will receive salaries of $900,000. It's expected that bonuses based on how well they run the companies will push them over the $1 million mark. These compensation levels are far below those of the former heads of Fannie and Freddie, and will largely be based upon performance. The better the two companies do while under their supervision, the more money they will earn. What a novel concept; pay for performance.