If you look at the executive compensation table below you can see that Michael Williams was paid $6.68 million last year at a time when Fannie posted a ($71) billion dollar loss. That was after a ($58.7) billion dollar loss in 2008 when Mr. Williams was paid just under $7.1 million. So much for “pay for performance.”
Let’s make this even simpler. In 2008 Fannie lost ($8,270) for every dollar Mr. Williams received in total compensation. In 2009 the story got even worse. Fannie lost even more money in 2009, but Mr. Williams only saw a 5% reduction in his compensation, while losses at the company increased 22.9%. As a result, for every dollar that Mr. Williams received in compensation in 2009, Fannie lost ($10,722)!!
Let’s not demonize some about executive compensation and give others a free pass. Through the end of 2009, the government poured some $125 billion of capital into Fannie and Freddie and they still want more. They have received more federal aid than any other financial in this crisis and yet they are exempt from all the financial reform, including executive compensation.
Most of the banks have already repaid their TARP money and turned a profit for the government. With all the hand wringing about TARP, at the end of the day, if you take out all the non-financials, like GM, Chrysler, AIG, etc. you will find that the government actually made money with the TARP program. While the program has been demonized in the press as a taxpayer, I would do it all again, except I would keep it to banks and not car companies and insurance companies. Name me another government program that actually returns more money to the Treasury than it initially took.
It is hard to fight facts, so let’s keep the dialogue to the facts and quit using rhetoric, scare tactics and populist language to talk about these government programs.
