Sen. Chuck Grassley, R-Iowa, has asked Fannie Mae and Freddie Mac to account for their retention bonus programs while the entities were losing money and even after they accepted taxpayer-funded bailouts.
“Just as with the extravagant bonus pay at AIG, it’s important to make sure that taxpayer support isn’t enabling unreasonable compensation arrangements that would never have been possible without taxpayer assistance,” Grassley said.
Fannie Mae reported a loss of $58.7 billion for 2008, and has requested another $15.2 billion from the U.S. Treasury. Freddie Mac reported a loss of $50.1 billion for 2008, and has requested an additional $30.8 billion from the U.S. Treasury.
“Payments mandated under Fannie Mae’s Retention Program are among the expenses leading to a $58.7 billion loss in 2008,” Grassley wrote to the government-sponsored enterprises.
“The Retention Program has already paid out to four executives a total of $880,000, is set to pay another $2.068 million to these executives in 2009, and a third ‘performance-based’ payment of $1.45 million to these executives in 2010,” he wrote. “Considering Fannie Mae’s lackluster performance in 2008 and shortage of funds for the coming year, it should carefully consider all expenditures, including those expenditures relating to executive compensation.”
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