Fannie Mae, Freddie Mac executives to receive millions in bonuses

[dcsmart]

Fannie Mae and Freddie Mac, the mortgage lending giants currently under federal conservatorship, will pay out $210 million in retention bonuses over the course of 18 months, a recent letter by the companies’ federal regulator, James Lockhart, states.

The Obama administration is tacitly backing the payouts, since it has kept Lockhart, a Bush appointee, as the head of the federal agency that regulates the two mortgage finance companies.

Some $51 million in bonuses was paid late in 2008. The remainder will be released in 2009 and early in 2010, according to the letter, sent Friday to Iowa Republican Senator Charles Grassley.

Two hundred and thirteen executives and employees at the two firms will each take home more than $100,000 in 2009 bonuses. Two high-level executives will each be awarded more than $700,000.

Last year, Fannie paid out $4.4 million in bonuses to its top four executives.

In the letter, Lockhart defended the bonuses as necessary to retain talent at Fannie and Freddie. “It is not realistic to expect that experienced and highly skilled employees will indefinitely continue to work as hard as they have if we do not provide reasonable incentives to perform,” Lockhart wrote.

“If the bonuses are rescinded, it sends the exact opposite signal, and it would be extremely dangerous for the American economy to lose these workers at this point,” he added.

The two companies lost $108 billion in 2008 and have survived only because of two government infusions of cash and loans totaling $400 billion.
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FULL ARTICLE
http://www.wsws.org/articles/2009/apr2009/bonu-a07.shtml

[aquamarina]

1. This insanity has to stop.

[BlueJac]

2. Just give them all checks so they can write in the amount....

It is obvious nobody in Washington cares. We are in a free fall of insanity. When do we go splat?