Freddie Mac (FMCC) named Donald Layton, the former chief executive of online brokerage E-Trade Financial Corp. (ETFC), as its new CEO on Thursday.
Layton, who will join the company May 21, will become the third chief executive of the mortgage-finance giant since the government took over the company nearly four years ago. Charles E. Haldeman Jr., who took the top job in 2009, announced last fall that he would step down this year.
Layton, 62 years old, is a 30-year veteran of J.P. Morgan Chase & Co. (JPM), from which he retired in 2004. He held a series of top jobs there, including as head of the retail bank and co-head of the investment bank.
"I'm pleased that the board was able to attract a private sector leader of Don's caliber," Haldeman said in a statement. "His capital markets and banking background coupled with his ability to manage large, complex organizations will serve him well as he leads Freddie Mac's 5,000 dedicated employees going forward."
The search for a new chief executive was complicated by the fact that the firm's federal regulator, facing an uproar from Congress, capped the pay for the new executive at around $500,000. That is down from the $6 million compensation packages that Haldeman was eligible to receive. (Haldeman turned down a $2 million bonus payment earlier this year.)
Layton is no stranger to troubled companies. Two years ago, the Treasury Department named Layton an outside director of American International Group Inc. (AIG), the insurer that received a government bailout in 2008. On that board, he serves alongside Christopher Lynch, who became nonexecutive chairman of Freddie Mac in December.
In a statement, Lynch said Layton would bring "strong executive leadership and a deep understanding of financial markets at a pivotal time for Freddie Mac."
Among the challenges that Layton will inherit at Freddie are continued departures of executives and employees. Freddie said in a federal filing earlier this year that it was experiencing "disruptive levels of turnover" that could lead to "breakdowns" in internal operations.
The company also has four vacancies on its 11-member board of directors. Last week, Anthony Renzi, who heads the company's single-family mortgage business, said he would leave the company next week for a senior job with Citigroup Inc.'s (NYSE: C) mortgage unit.
Freddie Mac and its larger sibling, Fannie Mae (FNMA), were taken over by the government through a legal process known as conservatorship in 2008 amid huge mortgage losses. While those losses have since eased, the companies face an uncertain future, with Congress and the Obama administration making no concrete strides toward any overhaul.
Fannie is also in the final stages of conducting its search for a new chief executive. Michael Williams, the current CEO, announced his plans to leave the company in January.
