BIG FAT FAILED FANNIE

Just plain wrong!

That's what the story that follows describes relative to executive pay bonuses at the government owned and controlled Fannie Mae and, it appears, Freddie Mac as well. Make sure to consult the private section chart above while noting what this story is all about.

Both failed in 2008 and had to be rescued by billions of taxpayer dollars. Both remain in precarious financial straights today. Neither is making any money, both are seriously upside down in terms of profit and loss.

As we all know, the economy remains in recession and the government continues to throw billions of dollars in every direction imaginable, especially towards Democrat party constituencies that are the recipients of huge taxpayer financed paybacks for the outcome of the election last fall. We do not have the money we are spending and there is little chance that we will ever get out from under our exploding national debt, which reached eleven trillion dollars just this week.

Under such circumstances, what do the geniuses overseeing Fannie Mae decide is appropriate? Pay out large executive bonuses to the folks who have, to date, failed to turn that big fat Fannie around.

What is the underlying reason to provide taxpayer bonus cash to executives who continue to fail? It is part of their "retention program".

What? This is nothing more than blatant ignorance in action. Not to mention the usual greed among those who feed at the public trough. Consider the following:

1. There is no need to retain the people who have not, and apparently can not, fix the problems that plague Fannie Mae. There is an army of highly qualified executives out there looking for work. There is no need to retain these same folks. That is simply a canard.

2. Fannie Mae is a failed organization, kept on life support by taxpayer largess. The economy is in recession. No one at Fannie Mae, in light of those two realities, should get a bonus. Giving bonus cash to anyone at Fannie is clearly wrong.

3. Exactly where are those ever so valuable Fannie executives going to go if they decide to leave Fannie? Who is hiring leaders that have driven their organization into the abyss of failure? Where are there a large number of unfilled jobs crying out for Fannie execs? Earth to Fannie: there is no where for those who need a "retention program" to go. If they leave, they will be hurting for employment and that is a fact. In truth, they should be fired.

This announcement is not about retaining executives. It is about a self-serving payoff for a small group of people who, by any reasonable measure, have not earned it. But this is government work after all, so why would results be important.

Taxpayers: we are all looking at the model of the future under our current "leadership" in Washington DC. What a nightmare.


Fannie plans bonuses of $1M for 4 execs
Fannie Mae plans bonuses of $1M for top executives; Freddie Mac has similar plans
Alan Zibel, AP Real Estate Writer

WASHINGTON (AP) -- Fannie Mae plans to pay retention bonuses of at least $1 million to four key executives as part of a plan to keep hundreds of employees from leaving the government-controlled company.
Rival mortgage finance company Freddie Mac is planning similar awards, but has not yet reported on which executives will benefit.
The two companies, which together own or back more than half of the home mortgages in the country, have been hobbled by skyrocketing loan defaults. Fannie recently requested $15 billion in federal aid, while Freddie has sought a total of almost $45 billion.
Fannie Mae disclosed its "broad-based" retention program in a recent regulatory filing with the Securities and Exchange Commission. The company was only required to disclose the amounts for the top-paid executives, who will pocket at least $470,000 on top of their base salaries.
The bonuses are more than double last year's, which ranged from $200,000 to $260,000. Another round of bonuses ranging from $330,000 to $429,000 are planned for next February.
A company spokesman declined further comment.
Fannie Mae said regulators determined that the bonuses were needed because keeping key employees "was essential to ensure our viability through 2010, which would allow Congress, the administration and other parties involved time to determine what the form and function of the company will be in future years."
The bonuses were authorized last year by the Federal Housing Finance Agency, which seized control of Fannie and Freddie in September and ousted the companies' former CEOs
"It was critical to retain their most important asset -- their employees -- who are being asked to play a vital role in the nation's economic recovery," James Lockhart, the agency's director, said in a statement. "As the previous senior management teams left, it would have been catastrophic to lose the next layers down and other highly experienced employees."
But the generous paychecks could prove politically touchy amid outrage over roughly $165 million in bonuses paid out over the weekend by bailed-out insurance giant AIG.
Michael Williams, Washington-based Fannie Mae's executive vice president and chief operating officer, is due to receive a $611,000 retention award this year on top of his $676,000 base salary.
Williams received a $260,000 retention bonus last year and is in line for another $429,000 next February, for an expected total of $1.3 million, according to the SEC filing.
David Hisey, the company's deputy chief financial offer, is expected to receive a $517,000 retention award this year in addition to his $385,000 salary and $160,000 cash bonus. He received a $220,000 retention award last year and is due to receive $363,000 next February, for a total of $1.1 million.
The other two executives receiving the bonuses are Thomas Lund, who oversees the company's single-family mortgage business and Kenneth Bacon, who heads up housing and community development. Both are receiving about $1 million.
The company's two top executives, Chief Executive Officer Herbert Allison and Chief Financial Officer David Johnson, did not receive the awards because they were new to the company last year. Allison is taking no salary, while Johnson is receiving a base salary of $625,000 and no bonus.

Copyright © 2008 The Associated Press. All rights reserved

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