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March 19, 2009

The Dastardly Bonuses: AIG, Fannie, and Freddie

by Brad Warbiany

Those eeevvviiilll capitalists at AIG have been taking quite a beating. Now it’s time to spread the “wealth”:

Fannie Mae plans to pay retention bonuses of at least $1 million to four key executives as part of a plan to keep hundreds of employees from leaving the government-controlled company.

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. Another round of bonuses ranging from $330,000 to $429,000 are planned for next February.

Hubris.

What’s the over/under on how soon Barney Frank calls for the heads of the top folks at Fannie and Freddie?

Hat Tip: Cafe Hayek

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3 Comments

  1. I dunno about y’all, but I have trouble believing “hundreds” are going to be voluntarily leaving jobs any time soon.

    Comment by tfr — March 19, 2009 @ 7:51 am
  2. I’m just VERY angry at all of it..it reeks of all corruption so ingrained by both the pols and the “monied-class”.

    How are we to believe ANYTHING, ANYONE is telling us, when everyday thing come to light that everyday people are being sacrificed for their “betters”?!

    I am fuming b/c I can’t find work, and what little is out there, these employers are “low-balling” every chance they get, and then to be lied to everyday by the very people that are supposed to fix this up…it’s all very discouraging….

    Comment by angela — March 19, 2009 @ 10:53 am
  3. Angela,

    I share your anger. Government in bed with business is a very bad thing indeed. Government is supposed to protect our life, liberty and property, not take it from us and give it to favored companies.

    I’d only caution any assumption that government is supposed to fix this crisis. They caused most of it in the first place, and the unintended consequences of their prior attempts to “fix” things have left us in the mess we’re in now.

    Maybe we need to start being more vocal with our congress people and senators and demand they stop “fixing” us into jobless homeless bankruptcy.

    In any event, I wish you success in finding that next job.

    Comment by Akston — March 19, 2009 @ 10:41 pm

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