Lawmakers Attack Fat FannieBonuses
WASHINGTON - (10/07/04) -- Fannie Mae paid 21 top executivesmore than $1 million each in 2002, including bonuses, according toinformation disclosed by the House Financial Services Subcommitteeon Government Sponsored Enterprises. The compensation figures weredisclosed to drive home allegations brought by federal regulatorsthat top Fannie executives manipulated financial statements to meetearnings goals that would determine their annual bonuses. In 1998,for example, the company deferred recognition of $400 million inexpenses that allowed it to report earnings of $3.2309 a share,just beating the target of $3.23 a share, according to the Officeof Federal Housing Enterprise Oversight. This allowed six topexecutives to reap $5.9 million in bonuses for the year, OFHEOsaid. Rep. Christopher Shays of Connecticut said he was surprisedto see how big the bonuses were, with $245 million paid out between1998 and 2002. Rep. Richard Baker, chairman of the subcommittee,said he decided to make the compensation public after beingthreatened with a suit if he did by Fannie's outside lawyer KenStarr, known as the Whitewater special prosecutor.