Washington, DC - 3/9/2012 – Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco today released a 2012 Conservatorship Scorecard, which provides the implementation roadmap for the new FHFA Strategic Plan announced in February 2012. The scorecard includes specific objectives and timetables for Fannie Mae and Freddie Mac (the Enterprises) in support of the Strategic Plan.
FHFA also announced details on the new 2012 executive compensation programs at Fannie Mae and Freddie Mac. The 2012 pay program reduces top executive pay by nearly 75 percent since conservatorship, eliminates bonuses, and establishes a target for new CEO pay at $500,000. In setting this new compensation framework, FHFA concluded that further material reductions or uncertainty around compensation would heighten safety and soundness concerns.
“I believe the new compensation program strikes the balance between prudent executive pay including the elimination of bonuses, with the need to safeguard quality staffing in order to protect the taxpayers’ investment and achieve the objectives in the Conservatorship Scorecard,” said DeMarco. “A sudden and sharp change in pay from these levels would certainly risk a substantial exodus of talent, the best leaving first in many instances. A significant increase in safety and soundness risks and in costly operational failures would, in my opinion, be highly likely.”
The 2012 compensation program, disclosed today in the Enterprises’ SEC filings, was established by FHFA in consultation with the Boards of Directors for both Enterprises and the Department of the Treasury, as required by the Senior Preferred Stock Purchase Agreements established at the time of conservatorship in September 2008.