http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=568&e=11&u=/nm/20050404/bs_nm/financial_gses_dc_1The U.S. regulator of Fannie Mae and Freddie Mac on Monday issued a rule meant to improve corporate governance after multibillion-dollar accounting scandals at the housing finance giants.
Under the final rule, the Office of Federal Housing Enterprise Oversight would require compensation for the companies' executives, directors and employees to be "reasonable and appropriate."
Compensation must be based on factors that go beyond the companies' ability to generate earnings, according to the rule. Also, senior officers would be required to return their compensation if an accounting problem leads to an earnings restatement, OFHEO said.
The changes to federal regulation stem from OFHEO's investigations into Fannie and Freddie. The rule becomes final once published in the Federal Register.