The former chief executive of Fannie Mae has ended his pay dispute with the home mortgage giant after two years of legal wrangling.Franklin Raines will receive $2.6 million under a deal disclosed in a filing with the Securities and Exchange Commission. Raines was forced into early retirement in December 2004 -- with a $19 million severance package in hand -- alongside former Fannie finance chief J. Timothy Howard, shortly after regulators announced that the government-sponsored company had violated accounting rules.
A May report from the Office of Federal Housing Enterprise Oversight said that Fannie employees manipulated accounting to hit quarterly earnings targets and allow senior executives to collect performance bonuses between 1998 and 2004. Raines earned more than $90 million from 1998 to 2003, according to that report -- including more than $50 million in bonuses tied to the company hitting earnings targets. Raines has denied engaging in any wrongdoing.
The company still hasn’t issued an earnings restatement, which was, at one time, estimated to be in the range of some $2 billion.
The Fannie filing describes the $2.6 million to be paid to Mr. Raines as "deferred compensation" and "certain other sums." Some smaller issues remain, such as whether Raines will receive other incentive payments and stock options.
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