Executives at the bailed-out mortgage companies Fannie Mae and Freddie Mac will lose future bonuses and take a pay cut under a bill passed by the House Financial Services Committee.
By a 52 to 4 margin, the committee voted to end multi-million dollar salaries and bonuses given to executives by companies so dependent on taxpayer support. “These lavish compensation packages and bonuses are unfair, unreasonable and unjust to the taxpayers whose assistance is the only thing keeping Fannie and Freddie afloat,” said Rep. Spencer Bachus, R-Ala.
Cognizant of the oddity of the government setting private company pay, Bachus noted their dependence on taxpayer support. “”I don’t believe government should set wages for private sector employees,” Bachus noted, but he argued that “Fannie and Freddie executives and staff dont work for the private sector anymore they may not technically be government employees but the taxpayers own the company.”
As it stands, the bill would not classify Fannie and Freddie employees as government employees, but it would reduce their pay to align with federal pay standards — meaning that “the top executives of Fannie and Freddie could only have earned $218,978 this year.”
