In my best Nelson Muntz voice: ha ha.
The regulator of Fannie Mae and Freddie Mac said Sunday that it won’t allow the companies to make “golden parachute” severance payments to the mortgage companies’ ousted chief executive officers.
In a statement, the Federal Housing Finance Agency said such payments wouldn’t be made to Daniel Mudd and Richard Syron, despite provisions in their contracts. Mr. Mudd served as chief executive of Fannie and Mr. Syron was chairman and CEO of Freddie until last weekend, when the regulator seized control of the companies, saying they were in danger of running out of capital.
News reports that the two executives stood to receive millions of dollars in severance payments under their contracts triggered public protests from numerous politicians and inspired political cartoons in newspapers.
The FHFA cited “applicable statute and regulation” for its decision. The regulator has taken management control of the two companies under a legal process known as “conservatorship,” which could last for years while Fannie and Freddie are restored to financial health. The U.S. Treasury has pledged to provide as much capital as the companies need to continue in their role as the main suppliers of funding for home mortgages.
Really though, I have little sympathy for overly-paid executives who run companies into the ground, and then get massive payouts.