Sam Johnson praises government decision to cut the cord on the “golden parachute” for former housing execs
Washington,
Sep 15 -
Today U.S. Congressman Sam Johnson (3rd Dist.-Texas) hailed the government’s decision to cancel the multimillion dollar severance package, sometimes called the “golden parachute,” for the outgoing CEOs of the failed Fannie Mae and Freddie Mac.
“There ought to be real consequences for ousted CEOs who drive companies into the ground and then ask the government to clean up their mess… all at taxpayers’ expense. Finally some accountability! Thank heavens the government decided to cut the cord on the golden parachute for the former housing executives,” said Johnson. Johnson co-sponsored H.R. 6864, legislation to stop the outgoing executive officers and board members of Fannie Mae and Freddie Mac from receiving millions of dollars in severance pay.
Fannie Mae's former CEO Daniel Mudd and Freddie Mac’s CEO Richard Syron could have received, in total, up to $25 million, as part of a pre-negotiated severance plan. This summer the Congress passed a law that empowered the director of Federal Housing Finance Agency the authority to limit, but not cancel, severance payments made to departing executives. Last weekend the government took control of the failed former mortgage giants.
As Congress debated a housing industry bailout earlier this summer, Johnson blasted the lack of accountability within the entire industry and lobbed verbal shots at the two top executives of Fannie Mae and Freddie Mac. Johnson took to the floor to demand action.
Johnson stated, “Why should taxpayers foot the bill to prop up those former giants when the company CEOs rake in a bundle – and continue to do so? As one person said, it’s privatized profits and socialized risk. Apparently, Daniel Mudd, the CEO of Fannie Mae, received $11.6 million in salary, stock and other compensation for 2007. Richard Syron, CEO of Freddie Mac, took home about $18.3 million last year. On top of his salary, stock options and a $3.45 million bonus, Freddie Mac paid for a number of other perks for Syron, such as a car and driver, a home security system, travel costs for his wife, even $100,000 to pay his lawyer to negotiate his employment contract with the bank. Everyone knows I’m a strong supporter of freedom and free enterprise but this is ridiculous. The lack of accountability and responsibility is astounding.”
Johnson represents portions of Dallas and Collin Counties.
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