Gawain 0 #1 March 21, 2009 http://online.wsj.com/article/SB123739512036672809.html?mod=rss_whats_news_us QuoteBy JAMES R. HAGERTY and AARON LUCCHETTI More financial companies that are being propped up with federal money are facing political heat over bonus payments to executives. Fannie Mae is due to pay retention bonuses of between $470,000 and $611,000 this year to some executives, despite enormous losses at the government-backed mortgage company. Fannie's main rival, Freddie Mac, also plans to pay such bonuses but hasn't yet provided details. Fannie's bonuses are smaller than ones paid by American International Group Inc. that have caused a political firestorm for that company. Seventy-three AIG executives received retention payments of $1 million or more recently, according to New York Attorney General Andrew Cuomo. But the Fannie bonuses are still considerable and come at a time when Fannie and Freddie are receiving increasing amounts of funding from the Treasury. For 2008, Fannie and Freddie reported combined losses of about $108 billion, largely stemming from a surge in home-mortgage defaults. The Treasury has agreed to provide as much as $200 billion of capital apiece to Fannie and Freddie in exchange for preferred stock. The two companies have said they will need a combined $60 billion of that money to cover their losses so far. Bonuses for executives at companies that have received federal backing are "definitely wrong," said Rep. Edolphus Towns, a New York Democrat. "They are rewarding folks who have not done a good job." Rep. Towns also questioned whether executives would bolt if they didn't get retention bonuses. "Where are these people going?" he asked. "Everybody's laying off." On Tuesday, Sen. Robert Menendez (D., N.J.) wrote to Treasury Secretary Timothy Geithner, asking him to "use every legal means available" to stop $3 billion in previously disclosed retention payments to brokers at the new joint venture being formed by Morgan Stanley and Citigroup Inc.'s Smith Barney unit. "These payouts constitute misuse of taxpayer money and are an insult to hardworking families who are saving every penny," wrote Sen. Menendez. Morgan responded in a statement that the payments aren't bonuses, but loans that won't start paying until 2010 and cannot be kept in full unless the broker stays at the firm for nine years. "The program is necessary because our financial advisers are being poached by competitors," the statement added. The venture will be jointly owned by Morgan and Citigroup, both of which have taken an investment from the U.S. government after they ran into trouble during the credit crisis. But unlike some of the people who have received bonuses at AIG, the brokers getting extra money at the new Morgan Stanley Smith Barney haven't been directly involved with billions of dollars in write-downs at their parent companies. James Lockhart, director of the Federal Housing Finance Agency, or FHFA, which regulates Fannie and Freddie, said the bonuses they are paying are "critical" to retain people needed to support the mortgage market and work on foreclosure-prevention efforts. After the companies' chief executives were ousted in September, "it would have been catastrophic to lose the next layers down and other highly experienced employees," he said. Mr. Lockhart added that compensation has declined for many employees because other types of bonuses weren't paid last year, and "past stock grants are virtually worthless." A recent Fannie securities filing, providing details on a bonus plan announced last year, says that Michael Williams, the company's chief operating officer, is due to receive cash retention awards of $611,000 this year, atop a similar award of $260,000 in 2008. His base salary is $676,000 a year. The company also disclosed plans to pay retention awards this year of $517,000 to David Hisey and $470,000 each to Thomas Lund and Kenneth Bacon. All three are executive vice presidents. The bonuses this year are to be paid in two installments, one in April and the second in November. Those installments are to be paid only if the executives remain in their posts at the payment dates. Hundreds of other Fannie employees also are eligible for retention awards, but the company disclosed only the largest of the bonuses. It said there are no plans for a retention bonus for CEO Herbert Allison, who elected to serve without any salary or bonus in 2008. Where's the call for Frank Raines to appear in front of a Congressional hearing? He only made some $90+M during his teardown...er...tenure... Anyone care to note how much taxpayer money has been handed out to Freddie, and Fannie... ...anyone... ...anyone... ...Bueller...?? Well, each company has a portfolio exceeding $800B...and to my best recollection, each have received in excess of $200B each...$400B plus... Just wondering where the anger is...So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
jerryzflies 0 #2 March 21, 2009 They should be ashamed too. ALL of the Wall Street fat cats whose greed created this mess should be ashamed.If you can't fix it with a hammer, the problem's electrical. Quote Share this post Link to post Share on other sites
Gawain 0 #3 March 21, 2009 QuoteThey should be ashamed too. ALL of the Wall Street fat cats whose greed created this mess should be ashamed. Great class-warfare response...you'd do Marx proud. Fannie and Freddie are not Wall Street outfits...they are Beltway outfits and their collapse can be directly attributed to Congressional action/inaction and the Bush Administration not pushing hard enough over the years.So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
rushmc 18 #4 March 21, 2009 This is different. Fanie and Freddy move money to Barney and others......"America will never be destroyed from the outside, if we falter and lose our freedoms, it will be because we destroyed ourselves." Abraham Lincoln Quote Share this post Link to post Share on other sites
Krip 2 #5 March 21, 2009 QuoteQuoteThey should be ashamed too. ALL of the Wall Street fat cats whose greed created this mess should be ashamed. Great class-warfare response...you'd do Marx proud. Fannie and Freddie are not Wall Street outfits...they are Beltway outfits and their collapse can be directly attributed to Congressional action/inaction and the Bush Administration not pushing hard enough over the years. The only thing the politicans know how to do is get elected. "Great class war fare response" get over it dude this isn't the army or the 1800's. In the real world if you don't succed in your job or don't take care of your people you should not be rewarded or promoted for failure. I don't think Mr Marx had anything to do with the French revolution or the king losing his head. If the king of france had listened to the misery of the frence lower class, maybe the frence nobility wouldn't have lost their jobs. R.I.P. Quote Share this post Link to post Share on other sites
jerryzflies 0 #6 March 21, 2009 QuoteThis is different. Fanie and Freddy move money to Barney and others...... Source?If you can't fix it with a hammer, the problem's electrical. Quote Share this post Link to post Share on other sites
rushmc 18 #7 March 21, 2009 Quote Quote This is different. Fanie and Freddy move money to Barney and others...... Source? Just look at the funds reported they recieved!! AND WHO GAVE THEMWhat percentage of what really recieved we will never know"America will never be destroyed from the outside, if we falter and lose our freedoms, it will be because we destroyed ourselves." Abraham Lincoln Quote Share this post Link to post Share on other sites
penniless 0 #8 March 21, 2009 Quote Quote Quote This is different. Fanie and Freddy move money to Barney and others...... Source? Just look at the funds reported they recieved!! AND WHO GAVE THEMWhat percentage of what really recieved we will never know How are their campaign contributions "different" from AIG's? AIG is on the list of the top 100 political donors? Or is the difference simply that you don't like Barney? Quote Share this post Link to post Share on other sites
rushmc 18 #9 March 21, 2009 Quote Quote Quote Quote This is different. Fanie and Freddy move money to Barney and others...... Source? Just look at the funds reported they recieved!! AND WHO GAVE THEMWhat percentage of what really recieved we will never know How are their campaign contributions "different" from AIG's? AIG is on the list of the top 100 political donors? Or is the difference simply that you don't like Barney? Its not! That is the point. I am blaming government. I dont care about party. Both sides are screwing us. YOU seem to be blind to that fact Sarcasim is hard to show on this site."America will never be destroyed from the outside, if we falter and lose our freedoms, it will be because we destroyed ourselves." Abraham Lincoln Quote Share this post Link to post Share on other sites
rushmc 18 #10 March 21, 2009 To another point you made, No, Barney and Dodd are among the biggest criminals in Washington. NOT THE ONLY ONES, just among the biggest....."America will never be destroyed from the outside, if we falter and lose our freedoms, it will be because we destroyed ourselves." Abraham Lincoln Quote Share this post Link to post Share on other sites
