(CNBC) -- Timothy Mayopoulos, Fannie Mae’s general counsel and chief administrative officer, will become the mortgage giant’s new chief executive, sources close to the matter confirm. Mayopoulos, 53, has been with Fannie Mae since 2009, after being replaced at Bank of America by Brian Moynihan, who later became CEO.
The new position will come with a very large pay cut, a $600,000 annual salary, Fannie Mae confirms. Mayopoulos would make far more than that, potentially over $2 million in his current position as general counsel. Outgoing Fannie Mae CEO Michael Williams received $5.2 million in—compensation last year, according to the FHFA.
“I think it’s a great privilege to lead an organization like this. This institution makes huge contributions to the national economy and to the lives of ordinary people,” Mayopoulos said in an interview with CNBC just after the announcement. “While my compensation will be less, I consider it a real privilege to help Fannie may do what it does.”
The Federal Housing Finance Agency, overseer of Fannie Mae and Freddie Mac, which are in government conservatorship, announced in March of this year that it would slash CEO pay to an annual salary of $500,000 with no bonuses.
FHFA Acting Director Edward DeMarco has said that salary limits at Fannie Mae in general could cause a “brain drain,” citing concerns of a, “substantial exodus of talent.” Meanwhile some members of Congress have expressed outrage at the salaries received by former Fannie Mae CEO’s as the company has taken $117 billion in aid from the U.S. Treasury, paying back, $22.6 billion in dividend payments. Fannie Mae did not ask for additional aid in the first quarter of this year, the first time that has happened since the third quarter 2008.
Mayopoulos says Fannie Mae has made a lot of progress but, “we still have a huge amount of work to do.” He says the first step will be to lay the foundation for a new housing finance system.
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