Fannie and Freddie: Pay for Perseverance

It's no wonder that feet dragged when it came to disclosing the specifics of what government-rescued mortgage financers Fannie Mae and Freddie Mac are paying to make sure their employees stick around.

It's $210 million. About a fourth already was paid out last year, and another $159 million will be paid out this year and next, according to a letter from the companies' government regulator, James B. Lockhart, who heads the Office of Federal Housing Enterprise Oversight.

The money details have been hush-hush, especially after the wave of public fury that followed the $165 million that another government ward, American International Group, paid in employee retention bonuses.

Fannie and Freddie lost almost $110 billion last year, although Lockhart was quick to assure the Senate Finance Committee that the current crop of bonuses will not be paid "to senior executives based on 2008 performance."

Thousands of employees, though, will get cash awards as part of a plan "that targeted employees most critical to keep and difficult to replace," Lockhart said.

No names were given - that would violate privacy and safety, he said - but some 20 Fannie employees received more than $100,000 each, and about the same number of Freddie employees received the same amount or more.

One bit of good news: the bonus plan, which was designed with compensation adviser Hay Group, requires employees to meet "at least one performance obligation and, in some cases, two" in 2009 and 2010.

No details about exactly what that means, and no explanations forthcoming from the two companies.

Oh, and the $165 million is a drop in the bucket - only about .01 or .02 percent - of the 2009 in taxpayer-financed loan purchases and guarantees, Lockhart said. If that makes anyone feel any better.

by Elizabeth Olson