Fannie Mae and Freddie Mac, those institutions of ‘higher standards’, are preparing to pay up to $210 million in retention bonuses:
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…
“It is not realistic to expect that experienced and highly skilled employees will indefinitely continue to work as hard as they have if we do not provide reasonable incentives to perform,” Mr. Lockhart wrote. He argued that the companies need “skilled and experienced staff” to manage safely their more than $5 trillion in debt and guarantees of mortgage securities.
A few weeks ago, the public disclosure of AIG bonuses set off a firestorm – some AIG employees even had their houses vandalized. It would be nice to give credit where credit was due and pat Rep. Barney Frank on the back for denouncing the Fannie/Freddie scheme way back when, but all eyes seemed to be on AIG. They stayed there too, and one has to wonder why. Or at least had to wonder, as this news, including but not limited to the fact that a full 25% of the prospective bonuses have already been paid, was popped on a Friday. By Monday the public will have forgotten all about it, as planned.
Again, where are these specialists going to go otherwise? Same old excuses, and the same old tactics.
“For personal privacy and safety reasons,” Mr. Lockhart said, it wouldn’t be appropriate to release the names of all employees receiving bonuses of $100,000 or more.
Well at least Fannie and Freddie employees’ windows won’t be getting smashed.