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Mortgage chiefs to lose payouts
15.09.08
US regulators look set to bow to political and public pressure and block millions of dollars in severance payouts to the chiefs of sticken mortgage finance firms Freddie Mac and Fannie Mae.
The Federal Housing Finance Agency (FHFA) has notified former Fannie chief Daniel Mudd and Freddie ex-chief Richard Syron that the so-called “golden parachutes” will not be paid.
Mudd and Syron were entitled to combined pay and bonus packages worth about $24 million (£13.4 million) as part of the government's plan to restructure the troubled companies.
News of the men's windfall from taxpayers' funds was greeted with outrage by the public and politicians, including presidential hopeful Barack Obama.
A law passed by Congress this summer gave the FHFA the power to limit severance payments made to departing executives.
The agency has not specified what the former executives would lose or what parts of their contracts were in play.
