A Feb. 9 Business article about the compensation of Fannie Mae executives incorrectly said that four executives will receive unrestricted shares. The shares are restricted.
Fannie Mae Sets Executive Salaries
Thursday, February 9, 2006
Fannie Mae chief executive Daniel H. Mudd will take home $3.5 million in salary and a bonus this year, the company reported yesterday.
The District-based housing-finance giant has not finished cleaning up its books following a multibillion-dollar accounting scandal. But the board decided to reward Mudd with a $2.6 million bonus for his performance in 2005 based on a set of non-financial goals, such as progress on fixing the company's accounting and promoting "respectful, appropriate and productive" relationships with regulators and industry partners.
The board also granted Mudd $8 million worth of restricted stock under a long-term incentive plan. The shares will not be awarded until March, when the company files an update on its financial reports.
Mudd's pay package is less lavish than that of his predecessor, Franklin D. Raines, who in 2003 received $16.4 million in compensation in addition to stock options. Raines retired in December 2004 after regulators uncovered accounting problems at Fannie.
Mudd will take home less money than his counterpart at Freddie Mac, chief executive Richard F. Syron, did last year when he was paid $3.6 million in cash and received an additional $9.2 million in stock and options. The McLean housing-finance company is also emerging from a multibillion-dollar accounting scandal.
In its September 2004 report on Fannie Mae's accounting, the company's regulator, the Office of Federal Housing Enterprise Oversight, concluded that Fannie executives had manipulated earnings to hit an earnings target that in turn triggered bonuses for executives. The agency also criticized Fannie for tying executive compensation to growth in earnings per share. In response, the board last year changed its approach to executive compensation, measuring performance based on non-financial measures.
Fannie Mae yesterday reported the 2006 salaries and 2005 bonuses of four other top executives.
Robert J. Levin, executive vice president and chief business officer, will receive $750,000 in salary and a $1.8 million bonus. Levin served as interim chief financial officer following the resignation of J. Timothy Howard.
Michael J. Williams, executive vice president and chief operating officer, will be paid $650,000 in salary and receive a $1.4 million bonus.
Peter S. Niculescu, executive vice president in charge of the mortgage portfolio business, will receive a salary of $539,977 and a bonus of more than $900,000.
Julie St. John, executive vice president and chief information officer, will be paid $529,642 and receive a bonus of more than $700,000.
All four executives will also receive shares of unrestricted stock and hundreds of thousands of dollars in restricted cash.