FHFA conducts GSE salary review

Housing regulator to evaluate if compensation at the GSEs are reasonable and comparable

FHFA conducts GSE salary review

After a series of high-level exits from Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA) has decided to review the executive compensation of the two firms and their sister GSE, the Federal Home Loan Banks (FHLBanks).

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According to a press release, the regulator has issued a request for input (RFI) to assess if the GSEs’ current compensation policies are “reasonable” or “comparable.” The FHFA noted that the last time it examined the mortgage giants’ compensation was in 2012.

Over the past year, management at Fannie and Freddie have lost chief executives due to salary constraints, putting the companies at a disadvantage when recruiting and retaining executives.

The agency’s RFI includes 25 questions designed to “enhance its ability to fulfill its statutory responsibilities to ensure that the regulated entities operate in a safe and sound manner and fulfill their statutory missions,” the FHFA said in a statement.

FHFA director Mark Calabria added that the information gathered from the RFI would help ensure transparent and appropriate executive compensation policies.

“Compensation policies must balance the need for FHFA’s regulated entities to attract and retain talent while focusing on and fulfilling their core mission responsibilities. This review will be done in a way that emphasizes safety and soundness, protects taxpayers, and enhances financial stability in the housing system,” Calabria said.