The chief executives of Fannie Mae and Freddie Mac could collect up to $4 million a year in pay as a result of new government rules that ease restrictions on the leaders’ compensation six years after the mortgage finance giants received massive bailouts to cover losses suffered during the housing bust.
New filings with the Securities and Exchange Commission detail the pay package for Fannie Mae CEO Timothy Mayopoulos and for Freddie Mac CEO Donald Layton.
Both are eligible to receive a base salary of $750,000, deferred salary worth $2.05 million and deferred salary based on performance of $1.2 million. The companies declined comment beyond what they said in filings.
Neither executive was in place in 2008 when the government took over Fannie Mae, based in Washington, D.C., and Freddie Mac, based in McLean, Va. At the time, the finance giants were teetering, having suffered huge losses by guaranteeing risky mortgages leading up to the housing downturn.
Under terms outlined by the government’s bailout plan, compensation for the chief executives was limited to $600,000. The decision to raise the limit was approved by the Federal Housing Finance Agency, which oversees the companies.