US government-controlled mortgage finance companies Fannie Mae and Freddie Mac on July 01 disclosed huge pay raises for their chief executive officers, part of a plan sanctioned by their regulator to attract and retain talent.
Fannie Mae CEO Timothy Mayopoulos and his counterpart at Freddie Mac, Donald Layton, will each now earn a targeted $4 million a year, up from previous annual salaries of $600,000.
The Federal Housing Finance Agency, an independent regulator, slashed executive pay at the two companies in 2012. Before then, executives could earn as much as $6 million a year.
Freddie Mac and Fannie Mae disclosed the pay raises in filings to the Securities and Exchange Commission.
The increases came despite opposition from the Obama administration.
When the FHFA said in May that it backed higher pay for the executives, the Treasury opposed the idea on grounds that taxpayers continue to backstop the companies after the government bailed them out in 2008 during the financial crisis.
The FHFA, which has sole authority over executive compensation at the two companies, said the pay caps in place limited their ability to develop reliable CEO succession plans.
In its filing on July 01, Fannie Mae said Mayopoulos' salary would still be below financial industry norms.
CEOs at more than 75 percent of comparable companies, including Northern Trust Corp and Capital One Financial Corp, will earn more than Mayopoulos, Fannie Mae said.