I just got done reading a very intriguing article in Morningstar which is a good provider of all news financial. There are and have been some big debate over the pay of CEO’s at companies around the globe as well as those tied to the recent US economic mess and foreclosure debacle. Recently the two guys in charge of Freddie Mac and Fannie Mae, which also means to the two guys basically in charge of a majority of bank originated mortgage debt, just got gigantic raises. Super massive paydays are coming because they have been paid only the maximum limit of government regulated restricted pay of $500,000, since 2012. That means they have had to suffer since then, being paid well below what the market average is for huge companies like Bank of America, Allstate, JPMorgan Chase, etc, etc.
Many people are going to be upset about this because we are not completely out of this mess. Foreclosures still happen often, and whether these two folks were at the helm causing or helping the process, it is a touchy subject. Do you think they should now be making a combined total of $8 million. $4 million each. The Federal Housing Finance Agency actually regulates both companies, although they are private companies.
– ” But in granting the pay increases, Federal Housing Finance Agency Director Mel Watt defied the White House and some lawmakers who said the raises weren’t appropriate for companies still backstopped by taxpayers.
The U.S. Treasury Department “does not support FHFA’s new approach to CEO compensation at Fannie Mae and Freddie Mac and urged the agency to reject any increase,” said a Treasury spokesman. “While FHFA ultimately has sole authority over executive compensation at both enterprises, Treasury has consistently recommended that existing limits on compensation continue given the taxpayers ongoing backstop of both enterprises.”
So they are covering themselves by saying not all in the Capitol agree, but it’s still going to happen. It is funny how they have defended why these CEO’s should get paid so much. I understand it, but don’t completely agree.
In a statement, Mr. Watt said the new pay packages are “consistent with FHFA’s statutory responsibilities to ensure safety and soundness and a liquid national housing finance market.” He added that the structure of the identical pay packages, which include deferred salary of $3.25 million, would “promote CEO retention, allow reliable succession planning and ensure the continuity, efficiency and stability of Enterprise operations.”
What do I know? I am just a real estate agent that sold about a hundred foreclosures over the past 4 years. I am thankful that God put me in this spot to help out the new homeowners that also get to benefit from the lower priced foreclosed homes. I was able to support my family and learn about being a Realtor faster than I ever thought possible. Maybe they did their job as CEO’s. The market has definitely improved incredibly in the recent two years for the Athens and Watkinsville area. What do you think about these salaries?
Go read the whole article here: http://www.morningstar.com/news/dow-jones/TDJNDN_201507017951/fannie-freddie-ceos-to-get-34-million-raises.html