Fannie Mae is planning to pay retention bonuses

[Foxfyre]

WASHINGTON -- Fannie Mae is planning to pay retention bonuses of as much as $611,000 each to several top executives of the government-controlled mortgage finance titan. Sibling company Freddie Mac is planning similar awards.

Fannie Mae disclosed in a recent filing with the Securities and Exchange Commission that it's planning bonuses of $470,000 to $611,000 for four top executives, on top of their base salaries this year.

Freddie Mac has a similar retention plan in place, but has yet to disclose how much money top executives are in line to receive.

Both companies were seized by federal regulators last fall. Fannie has requested $15.2 billion in government aid, while Freddie has asked for nearly $31 billion in additional aid on top of the $13.8 billion it received last year.


From the AP

And heres more about greedy Execs

[Aaron]

Hang on, they want to retain the people that fucked them (and US)?

What exactly did the US government exchange for the bailout, cause it seems they didn't get the ability to fire these fucking morons and restrict the rampant idiocy. At what point does this stop being a bailout/subsidy and just become free cash?

[Mikey]

There hasn't really been a difference, except WRT production industries receiving money - those were required to present business/reorg plans. And I am as outraged as everyone else, but bear in mind a contract is still a contract, no matter who these companies got their money from. If an AIG exec had a contract including a ludicrous bonus, then AIG really has no recourse to not pay it. The individual, of course, should have the decency to say, "Wait, I'll only take $1 million."

[Captain Picard's Hair]

A contract is indeed a contract. Also, as much as these bonuses are outrageous and indicative of the same sort of greed that led us into this hole, the reaction might be a bit out of proportion - esp among the US Congressmen and Senators fuming over this. Quite frankly, they have better things to do than worry about relatively small amounts of money on the scale of the modern disaster and a handful of people when there are millions more in far more urgent need of their time and effort.

Kendall: I get the feeling that "the people that f*cked them" are/were some of the most powerful people in these companies (as well as their counterparts in all the other Wall Street firms now laying in tatters). Either there's nobody higher than them with the authority to get rid of them, or it's politically impossible in those companies. I don't like it either, but that's the way it is.

[Aaron]

A contract is indeed a contract. Also, as much as these bonuses are outrageous and indicative of the same sort of greed that led us into this hole, the reaction might be a bit out of proportion - esp among the US Congressmen and Senators fuming over this. Quite frankly, they have better things to do than worry about relatively small amounts of money on the scale of the modern disaster and a handful of people when there are millions more in far more urgent need of their time and effort.

Kendall: I get the feeling that "the people that f*cked them" are/were some of the most powerful people in these companies (as well as their counterparts in all the other Wall Street firms now laying in tatters). Either there's nobody higher than them with the authority to get rid of them, or it's politically impossible in those companies. I don't like it either, but that's the way it is.

A contract is indeed a contract and all that, the outrage (on my part anyways) is more about the sheer gall it would take to accept a bonus paid by government funds after you ran the company into the ground.

[Mikey]

On that score, I agree with you fully.

[stitch626]

Honestly, they could break the contract at any time. Whats the worst that could happen.
They get sued for breach of contract and then the US gov throws out the suets because the company took actions that were for the betterment of the country.
This is simple greed.

[Mikey]

Honestly, they could break the contract at any time. Whats the worst that could happen.
They get sued for breach of contract and then the US gov throws out the suets because the company took actions that were for the betterment of the country.
This is simple greed.

Is that a joke? The federal government has absolutely zero authority to toss a suit simply because they want to. Yes, it's simple greed; no, the employees under those contracts would absolutely win such a lawsuit.

[Aaron]

Tax the crap out of them.

[stitch626]

No they wouldn't. Not nescesarilly.
Breaking contracts happen quite frequently, and for lesser reasons than this, and the companies still win the suets. This was taxpayer funds that were supposed to help the companies get back on their feet, not line the pockets of executives.
Note, I am reffering to the AIG thing, not Fannie Mae.


Of course, this whole thing could have been avoided if the govt had been intelligent and specified what the bailout money was to be used for.

[Captain Seafort]

No they wouldn't. Not nescesarilly.

Why the hell not?

Breaking contracts happen quite frequently, and for lesser reasons than this, and the companies still win the suets.

Suits. And I fail to see how a statement that a given crime is common, and that courts frequently ignore said crime, makes it a good thing.

[stitch626]

Breaking the contracts may be a crime, but so is the needless spending of the bailout money (not a legal crime, though it may turn out to be, depending on what congress does).

The fact is they should not have made such contracts to begin with, and if the company survives, they may soon be at the end of a very short plank... figuratively speaking.

And I never said that it was a good thing. But honestly, I wouldn't care if every one of those execs spent the rest of their lives working in a fast food joint to pay it back.

And thank you for the spelling correcting, the spell checker didn't pick it up.

[Mikey]

That's because "suet" is also a word.

Anyway, yes it sucks - but the fact remains that (whether or not it would have won in court) the companies were legally liable to pay that bonus money. It's so amazingly easy to make it so that money wasn't paid from the bailout money that it's almost academic.

[Teaos]

I saw an interview with one of the excutives, he read out a few of the death threats they had gotten, rather inventive deaths awaiting them.

[Captain Seafort]

Breaking the contracts may be a crime, but so is the needless spending of the bailout money (not a legal crime, though it may turn out to be, depending on what congress does).

No it isn't. It's stupid, counterproductive, and pisses off most of the country, but it is not a crime - the latter refers specifically to offences under the legal system of a country.