March 18, 2009
Fannie Mae plans to pay retention bonuses of as much as $611,000 each to key executives this year as part of a plan to keep hundreds of employees from leaving the government-controlled company.
[efoods]Rival mortgage finance company Freddie Mac is planning similar awards, but has not yet reported on which executives will benefit.
The two companies, which together own or back more than half of the home mortgages in the country, have been hobbled by skyrocketing loan defaults. Fannie recently requested $15 billion in federal aid, while Freddie has sought a total of almost $45 billion.
Fannie Mae disclosed its “broad-based” retention program in a recent regulatory filing with the Securities and Exchange Commission. The company was only required to disclose the amounts for the top-paid executives, who will pocket at least $470,000 on top of their base salaries. The bonuses are more than double last year’s, which ranged from $200,000 to $260,000.
A company spokesman declined further comment.
Fannie Mae said regulators determined that the bonuses were needed because keeping key employees “was essential to ensure our viability through 2010, which would allow Congress, the administration and other parties involved time to determine what the form and function of the company will be in future years.”