Freddie Mac CEO Donald Layton and Fannie Mae CEO Tim Mayopoulos each earn a base salary of $600,000, plus money added to their retirement plans, under a 2012 salary cap put in place by the regulatory Federal Housing Finance Agency, Politico reports. But that may not be enough to keep them—or possible future executives—to run the two mortgage giants, says Melvin Watt, the FHFA director who's now calling to raise that compensation. In a Freddie Mac filing yesterday, his proposal notes the salary increase wouldn't exceed what's made in the lower 25% of the market and doesn't include bonuses. "The current [CEO] compensation framework limits the ability of ... Fannie Mae and Freddie Mac to promote retention of their CEOs, to develop reliable CEO succession plans, and to ensure continuity of operations and organizational stability," Watt says in a statement, per the Wall Street Journal.
Watt's proposal comes even as the companies continue to receive taxpayer funds, and as Congress tries to figure out whether to dissolve them or revamp them, Politico notes. Not everyone is thrilled with this development. The Treasury Department, which Politico notes ponied up $187.5 billion in bailout money when the housing market blew up, issued a statement per the Journal that said the department "has consistently communicated to FHFA that a change in CEO compensation … is not appropriate." White House spokesman Josh Earnest says, per the newspaper, "I think it is entirely legitimate for the executives at those institutions to be subject to compensation limits," adding the CEOs still receive "significant financial compensation," even if it's not on par with the private sector. (More Fannie Mae stories.)
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