Obama: Reduced Exit Packages Urged for Ousted Executives of Mortgage firms

[groovedaddy]

Senator Barack Obama and two other prominent Democrats urged federal housing regulators on Tuesday to cut the golden parachutes of the ousted leaders of Fannie Mae and Freddie Mac, another sign that the government bailout of those mortgage giants could reverberate through the presidential campaign.

Mr. Obama, the Democratic presidential nominee, asked that any “inappropriate windfall payments” to the chief executives and senior managers of those agencies be voided, in a letter to Treasury Secretary Henry M. Paulson Jr. and the director of the Federal Housing Finance Agency, the new regulator for Fannie and Freddie.

Together, Daniel H. Mudd of Fannie Mae and Richard F. Syron of Freddie Mac are eligible for as much as $24 million in severance, retirement benefits and deferred compensation.

“Under no circumstances should the executives of these institutions earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources,” Mr. Obama wrote.

http://www.nytimes.com/2008/09/10/business/10comp.html?th&emc=th

[firedupdem]

1. That's the guy I want in the White House n/t

[groovedaddy]

2. I have never understood how executives of tanking companies rate

these kind of bonuses upon their jumping the sinking ship. In this case, our tax dollars will keep these "ships" afloat. But these guys need to be in prison for their performance, not getting millions of dollars!!!

[Igel]

6. In this case, from the OP, by contract.

Deferred compensation--money they could have received before. Probably stock. Sometimes it's to make sure that termination is less likely to happen; sometimes they simply don't take stock options until the end, then it gets rolled into some horribly large lump sum.

Retirement benefits. That doesn't need explaining, I think. Perhaps it would be interesting to look at how they calculate "health benefits" and the total amount to be paid out. Seriously: My ma worked for 30 years, and retired. With retirement came health and pension, much provided by the company. She retired 24 years ago. At $25k/year pension and with health benefits at about the same, that's pushing $1 million she's gotten in benefits. My father worked for the same company, and didn't qualify for post-retirement health insurance; he qualified for a lump sum, which he invested. It would be of interest to see if these guys' retirement amounts are lump sum or assume some sort of long-term payout.

Severance--what you pay when you terminate a contract early, or don't renew. Usually when you do that not "for cause"; "for cause", however, has its own downside ... litigation. Been there, done that. (And, the employee who was terminated got almost exactly the severance he was offered--of course, we were in court for 2 years, and both had rather large legal bills before we settled. Spiteful bastard.)

[bemildred]

7. Well. the question is, why do they make such deals with morons who destroy the company?

What is the object of such a stupid "deal"?

[Bob Dobbs]

3. How about PROSECUTING them for their serial criminality?

Is this the kind of hard nosed treatment we can expect from President Obama toward the traitors in busholini inc?

[The Backlash Cometh]

4. Wow. A democratic leader who responds with blog speed.

[Triana]

5. THAT is the change we NEED. GO Barack!

Love it.

[groovedaddy]

8. Nice Work if You Can Get It - NY Times editorial on this subject

Daniel Mudd and Richard Syron, the ousted chiefs of Fannie Mae and Freddie Mac, could collect as much as $24 million in exit pay (up to $9.3 million for Mr. Mudd and at least $14.1 million for Mr. Syron) unless a federal regulator sensibly says no.

Neither should be rewarded any more than they already have been for their failures.

This is the same Mr. Mudd and Mr. Syron who presided over the near total wipeout of Fannie and Freddie’s shareholders and whose mismanagement of the mortgage-finance companies has led to what could become the biggest federal bailout in American history.

The severance would come on top of $12.4 million in salary, bonuses and stock-option profits that Mr. Mudd has taken home since becoming Fannie’s chief executive in 2004, according to Equilar research. Mr. Syron also made out big, collecting $17.1 million since he took charge of Freddie in 2003.

http://www.nytimes.com/2008/09/11/opinion/11thu3.html?th&emc=th

[kurth_]

9. Send them to China for judicial processing

They need to rot in jail.

[4lbs]

10. This just isn't right.

After all, how is a corporate executive going to feed his family on only $8 or $10 million severance, instead of $24 million?

:sarcasm: