Freddie, Fannie In Bonus; Troubled Mortgage Titans Lost $ 10
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Copyright 2009 Gannett Company, Inc.All Rights Reserved USA TODAY
19 March 2009 Thursday FIRST EDITION
SECTION: MONEY; Pg 6A
LENGTH: 407 words
TITLE: Freddie, Fannie also give bonuses; Troubled mortgage titans lost $ 108 billion last year
Signature: Pallavi Gogoi
Even as American International Group is under intense fire from $ 165 million it paid in premiums, Fannie Mae and Freddie Mac have shown that they also give executives retention bonuses.
The two mortgage giants were taken over by the government and posted $ 108 billion in losses last year, stemming from mortgage defaults.
In securities, Freddie said it will pay a price for withholding $ 1.5 million to the Executive Vice President Michael Perlman in March 2010. Perlman, whose base salary is $ 500,000, $ 300,000 already collected his bonus. Interim CFO David Kellermann will get a bonus of $ 850,000, and Senior Vice President Michael May will receive $ 700,000.
"It's insulting to the average everyday workers who lost jobs and unemployment is the collection of these types of payments," says David DeBoskey, assistant professor at Charles W. Lamden School of Accountancy. DeBoskey said the payments are intended to prevent the abandonment of one of the leaders of society, but because the jobs are hard to find, retention bonuses are difficult to justify.
Meanwhile, Fannie Mae will pay a total of $ 871,000 to Michael Williams, its Chief Operating Officer, whose annual base salary is $ 676,000. Three other executives have bonuses ranging from $ 670,000 to $ 737,000.
Big bonuses are also coming to light of other companies that have received some form of federal help. Wells Fargo, which purchased nearly Wachovia failure, will pay a premium of $ 8 million of Senior Vice President David Carroll. Carroll, a former Wachovia executive, will be only the beginning of treatment and incentives totaling $ 20.7 million.
And on Tuesday, Senator Robert Menendez, DN.J., sent a letter to Treasury Secretary Timothy Geithner, urging him to quit Morgan Stanley to pay $ 3 billion in premiums to maintain its brokers as it merges its brokerage business with Citigroup.
Wednesday in New York Supreme Court judge ruled that the state Attorney General Andrew Cuomo could reveal the names of the 200 executives who received bonuses in 2008 at Merrill Lynch. Parent Merrill and Bank of America was against the fight to keep names confidential. Rep. Barney Frank, D-Mass., AIG has also sought to provide the names of all recipients of its awards.
"The political forces behind these requirements suggest that they want to embarrass the leaders to give up their bonuses," says Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.
LOAD-DATE: 19 March 2009
Copyright © 2009 LexisNexis, a division of Reed Elsevier Inc.. All rights reserved
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19 March 2009 Thursday FIRST EDITION
SECTION: MONEY; Pg 6A
LENGTH: 407 words
TITLE: Freddie, Fannie also give bonuses; Troubled mortgage titans lost $ 108 billion last year
Signature: Pallavi Gogoi
Even as American International Group is under intense fire from $ 165 million it paid in premiums, Fannie Mae and Freddie Mac have shown that they also give executives retention bonuses.
The two mortgage giants were taken over by the government and posted $ 108 billion in losses last year, stemming from mortgage defaults.
In securities, Freddie said it will pay a price for withholding $ 1.5 million to the Executive Vice President Michael Perlman in March 2010. Perlman, whose base salary is $ 500,000, $ 300,000 already collected his bonus. Interim CFO David Kellermann will get a bonus of $ 850,000, and Senior Vice President Michael May will receive $ 700,000.
"It's insulting to the average everyday workers who lost jobs and unemployment is the collection of these types of payments," says David DeBoskey, assistant professor at Charles W. Lamden School of Accountancy. DeBoskey said the payments are intended to prevent the abandonment of one of the leaders of society, but because the jobs are hard to find, retention bonuses are difficult to justify.
Meanwhile, Fannie Mae will pay a total of $ 871,000 to Michael Williams, its Chief Operating Officer, whose annual base salary is $ 676,000. Three other executives have bonuses ranging from $ 670,000 to $ 737,000.
Big bonuses are also coming to light of other companies that have received some form of federal help. Wells Fargo, which purchased nearly Wachovia failure, will pay a premium of $ 8 million of Senior Vice President David Carroll. Carroll, a former Wachovia executive, will be only the beginning of treatment and incentives totaling $ 20.7 million.
And on Tuesday, Senator Robert Menendez, DN.J., sent a letter to Treasury Secretary Timothy Geithner, urging him to quit Morgan Stanley to pay $ 3 billion in premiums to maintain its brokers as it merges its brokerage business with Citigroup.
Wednesday in New York Supreme Court judge ruled that the state Attorney General Andrew Cuomo could reveal the names of the 200 executives who received bonuses in 2008 at Merrill Lynch. Parent Merrill and Bank of America was against the fight to keep names confidential. Rep. Barney Frank, D-Mass., AIG has also sought to provide the names of all recipients of its awards.
"The political forces behind these requirements suggest that they want to embarrass the leaders to give up their bonuses," says Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.
LOAD-DATE: 19 March 2009
Copyright © 2009 LexisNexis, a division of Reed Elsevier Inc.. All rights reserved
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