WASHINGTON — Amid concerns about the difficulty in attracting executive talent at Fannie Mae and Freddie Mac, the regulator for the government-sponsored enterprises said it is reviewing their compensation policies.
The Federal Housing Finance Agency announced Thursday that it was seeking public comment about executive compensation practices at the GSEs and in the Federal Home Loan Bank System, including whether the current compensation scheme is appropriate.
The agency will weigh compensation practices while the GSEs are currently conservatorship, as well as any pay structure for whenever they are released into the private sector.
The FHFA's request for information comes as some observers blame the
“Compensation policies must balance the need for FHFA’s regulated entities to attract and retain talent while focusing on and fulfilling their core mission responsibilities,” FHFA Director Mark Calabria said in a statement. “This review will be done in a way that emphasizes safety and soundness, protects taxpayers and enhances financial stability in the housing system.”
The FHFA’s current executive compensation rules, which the agency last reviewed in 2012, limit executive officers at Fannie, Freddie and the Federal Home Loan banks to “reasonable and comparable compensation” to other similar private companies.
The agency is asking for public comment on 25 questions in order to “enhance its ability” to review executive compensation while ensuring that the GSEs operate in a safe and sound manner that protects taxpayers, the request for information said.
Those questions include whether the current compensation structure is appropriate, what the best metrics to assess compensation, if a percentage of an executive’s salary should be based on performance and how the FHFA should determine a “reasonable and comparable” salary.
The FHFA is also asking how compensation should be affected, if at all, by the fact that Fannie and Freddie are in conservatorship, and what a post-conservatorship executive compensation framework should look like.
Commenters can submit feedback to the FHFA for 60 days after the request for information is published in the Federal Register, or no later than Aug. 9.
