The federal government will not pay the ousted chief executives of mortgage finance companies Fannie Mae and Freddie Mac up to $24 million in exit packages.
The Federal Housing Finance Agency notified former Fannie Mae CEO Daniel Mudd and former Freddie Mac CEO Richard Syron that such “golden parachute” payments will not be paid. The housing agency, which took control over the companies earlier this month, made the announcement Sunday.
“It would have been unconscionable to award these inflated salaries, particularly when the leadership of Fannie and Freddie can hardly be given good grades,” Sen. Charles Schumer, D-N.Y., said in a statement.
Mudd had been due to receive up to $8.4 million in compensation, while Syron was due to receive up to $15.5 million, according to calculations by David Schmidt, a senior consultant at executive compensation consulting firm James F. Reda & Associates.
Representatives of Syron and Mudd declined to comment Monday morning. Mudd received $12.2 million in compensation in 2007, and Syron was paid $19.8 million.
Herbert Allison was named the new chief executive of Fannie, and David Moffett the new CEO of Freddie as part of the government's bailout of the agencies. Fannie and Freddie own or guarantee about $5 trillion of the nation's mortgages, roughly half the nation's total.
James Lockhart, the housing agency's director, has said compensation for the new executives will be “significantly lower than (for) the outgoing CEOs.”