Do Fannie, Freddie CEOs Deserve Big Bonuses?
Yesterday I told you about Eugene Isenberg - the former CEO, but current chairman of Nabors Industries. He received a $100 million bonus just for switching jobs - despite his company's stock dropping by nearly 20 percent this year. Isenberg was one of many CEOs with similar stories.
It's bad enough shareholders are being forced to pay for failure - but now it turns out it's not just shareholders, but taxpayers!
A new report from Politico shows Fannie Mae and Freddie Mac -- the companies that bear responsibility for the mortgage meltdown -- have approved nearly $13 million in bonuses! That's broken down to about six and a half million for each company.
That despite the fact taxpayers have given these federally backed mortgage giants $169 billion dollars in two years! So who gets what?
The outgoing CEO of Freddie Mac Ed Haldeman- who made nearly a million dollars in base salary last year - is taking home nearly two and a half million dollars in bonuses.
Fannie Mae's CEO Michael Williams is getting the same.
So how can these companies backstopped by us - as taxpayers - defend this?
A Freddie spokesman tells Politico: "Freddie Mac has done a considerable amount on behalf of the American taxpayers to support the housing finance market." If by considerable amount - he means taking a considerable amount of our money, then I guess he's right. Otherwise I'd really like to see the fruits of his labor.
Because here are the numbers: Freddie and Fannie were major players in the president's Home Affordable Modification Program - or HAMP. That - along with a similar program - HARP - was supposed to help three to four million homeowners. Less than two million people were actually helped.
Since the companies stocks are worthless - the bonuses for Freddie and Fannie executives were determined by their success in HAMP and HARP.
Freddie only helped a mere 160,000 people. Fannie Mae: 400, 000. Way less than half the eligible borrowers! So how can you claim success - and how can you defend using our taxpayer dollars to reward mediocrity?
These monstrosities have gotten enough help from us - no more! It's time the administration got a handle on these two money pits!