Mortgage finance giants Fannie Mae and Freddie Mac plan to pay more than US $210 million in bonuses through next year to give workers the incentive to stay in their jobs at the U.S. government-controlled companies.
AFP - More than 7,600 employees of US government-rescued mortgage finance giants Fannie Mae and Freddie Mac are to receive 210 million dollars in bonuses to keep them in their jobs, according to documents released by a lawmaker Friday.
Of the total retention bonuses planned over the next 18 months by the two companies, seized by the government last September to prevent their collapse, more than 50 million dollars have already been paid, the Federal Housing Finance Agency (FHFA) said in a letter to Senator Charles Grassley.
The FHFA is the government agency that oversees the bailed-out companies.
In the letter to the Republican senator, FHFA director James Lockhart defended the bonuses as necessary, saying retention of "human capital" was "one of our most important challenges" amid the housing meltdown.
"The enterprises need to control their risks carefully. That requires skilled and experienced staff in a wide range" of areas, he said.
Fannie Mae and Freddie Mac guarantee more than 40 percent of the home loans in the United States.
Hammered by the global financial crisis and the US recession, the two publicly owned firms were bailed out at a cost of up to 200 billion dollars by the Treasury Department.
According to Lockhart, Freddie Mac paid 17.8 million dollars in retention bonuses in 2008 and plans to pay 74.5 million in 2009 and 5.8 million in 2010.
Fannie Mae disbursed 33.5 million dollars last year and intends to spend 71.9 million this year and 7.2 million in 2010.
The disclosure of the bonus plans cames several weeks after a public uproar over 165 million dollars in bonuses paid by insurance giant American International Group.
AIG also was bailed out in September, and the government has paid more than 170 billion dollars to keep it afloat.
Date created : 2009-04-04