The House Financial Services Committee has voted 52-4 to suspend the multimillion-dollar compensation packages for the top executives at Fannie Mae and Freddie Mac and offered a new bill to redefine the executive compensation structure for the government-sponsored enterprises (GSEs).
The committee's legislation – H.R.1221, the Equity in Government Compensation Act – aligns the compensation structure for the GSE executives with the pay practices of the federal financial regulatory agencies. However, the bill does not make the GSE executives federal employees.
The legislation follows widespread criticism that the GSE executives were receiving seven-digit compensation. Under the bill, the same executives would have only been able to earn $219,978 this year.
‘These lavish compensation packages and bonuses are unfair, unreasonable and unjust to the taxpayers whose assistance is the only thing keeping Fannie and Freddie afloat,’ says Rep. Spencer Bachus, R-Ala., the committee's chairman. ‘Today, the committee approved a bill to stop rewarding the executives of these bailed out companies. Never again should Americans be forced to send their hard earned tax dollars to be wasted on multimillion-dollar pay packages for Fannie and Freddie executives.’