Manchin Outraged By Huge Bonuses For Execs At Fannie Mae And Freddie Mac
Despite receiving $141 billion in bailout funds from taxpayers, Fannie and Freddie paid out enormous bonuses
In bipartisan letter to Federal Housing Finance Agency and Treasury, Manchin and 59 Senate colleagues call executive bonuses ‘wasteful, wildly imprudent’
Senators urge changes to executive compensation policy
Washington, D.C.— Expressing outrage over the recent news that nearly $13 million in bonus pay was approved for 10 executives at Fannie Mae and Freddie Mac – even as the company has received $141 billion in taxpayer-provided bailout funding – U.S. Senator Joe Manchin (D-W.Va.) is joining 59 Senators from both parties to urge the Federal Housing Finance Agency and Treasury Department to stop this blatant abuse of taxpayer funds and change their policy for executive compensation.
“Using taxpayer dollars to give out enormous bonuses at a troubled company just doesn’t make any sense to me and I’m just as furious as the American people that their hard-earned tax dollars paid for extravagant bonuses at Fannie Mae and Freddie Mac,” Senator Manchin said. “Personally, I am insulted. To the millions of Americans who have been unemployed for years, who have lost their homes, and whose own benefits are on the chopping block, the idea that tax dollars are going toward extravagant executive bonuses is offensive. The Federal Housing Finance Agency needs to change their executive compensation policy as quickly as possible.”
The full text of the Senators’ letter is included below.
November 4, 2011
Mr. Edward DeMarco
Federal Housing Finance Agency
1700 G Street, NW
Washington, DC 20552
Dear Mr. DeMarco:
On November 1, 2011, it was reported that the Federal Housing Finance Agency (FHFA) approved $12.79 million in bonus pay for ten executives at Fannie Mae and Freddie Mac, the Government Sponsored Enterprises (GSEs). At a time when these entities have received nearly $141 billion in taxpayer-provided bailout funding, such excessive compensation seems wildly imprudent. Moreover, the full cost of conservatorship remains a moving target.
We are sincerely concerned about the message this sends to millions of American families when the unemployment rate stands at 9.0% and the housing market remains very weak. As American families are tightening their belts in light of the struggling economy, the federal government must take steps to ensure that the conservatorship is receiving proper oversight. The wasteful nature of these bonuses, however, is a step in the wrong direction.
The idea that Fannie Mae and Freddie Mac, which rely on taxpayer funding to stay afloat, must offer excessive bonuses to its executives to attract effective management strains credulity. We therefore urge you to make substantial changes to the executive compensation policies to more accurately reflect the public mission of your agency and the fiscal reality facing the GSEs and the federal government. We also request an update regarding your actions to reform compensation package protocol and what steps have been taken to address the concerns raised by the FHFA Inspector General in the March, 2011 report “Evaluation of Federal Housing Finance Agency’s Oversight of Fannie Mae’s and Freddie Mac’s Executive Compensation Programs.”
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