Did your company lose, like, a metric ass-ton of money this year? Did you directly take part in the exercise of stuffing a bunch of cash in some paper bags and lighting them on fire? Or, if you don't like to get your hands dirty, did you perhaps oversee the fun? Your employer has three words it'd like to say to you: never leave us. Bet ya thought it was going to be "hit the bricks," right? Wrong-o. The Journalreports that Fannie Mae and Freddie Mac have decided to take a page from AIG's play(a)book and bribe you geniuses to stick around.
Fannie Mae is due to pay retention bonuses of as much $470,000 to $611,000 this year to some executives despite enormous losses at the government-backed mortgage company. Fannie's main rival, Freddie Mac, also plans to pay such bonuses but hasn't yet provided details.
Fannie's bonuses are smaller than ones paid by American International Group Inc. that have caused a political firestorm for that company. Many AIG executives got retention payments of more than $1 million recently.
But the Fannie bonuses are still considerable and come at a time when Fannie and Freddie are receiving increasing amounts of funding from the Treasury. For 2008, Fannie and Freddie reported combined losses of about $108 billion, largely stemming from a surge in home-mortgage defaults. The U.S. Treasury has agreed to provide as much as $200 billion of capital apiece to Fannie and Freddie in exchange for senior preferred stock. The two companies already have said they will need a combined $60 billion of that money to cover their losses so far.
A recent Fannie securities filing says that Michael Williams, the company's chief operating officer, is due to receive cash retention awards of $611,000 this year, atop a similar award of $260,000 in 2008. His base salary is $676,000 a year.
The company also disclosed plans to pay retention awards this year of $517,000 to David Hisey and $470,000 each to Thomas Lund and Kenneth Bacon. All three of them are executive vice presidents.