Executive Compensation at Fannie Mae and Freddie Mac

FRB of St. Louis Working Paper No. 2004-06

19 Pages Posted: 29 Mar 2005

See all articles by William R. Emmons

William R. Emmons

Federal Reserve Bank of St. Louis - Banking Supervision and Regulation; Washington University in St. Louis

Gregory E Sierra

Southern Illinois University Edwardsville

Date Written: October 26, 2004

Abstract

Corporate governance - and executive - compensation arrangements in particular - should be an important component of the agenda to reform the housing GSEs. The GSEs' safety-and-soundness regulator - who is essentially the debtholders' and taxpayers' representative - must be admitted to the GSEs' boardroom in a way that is atypical of an ordinary publicly held company. This intrusion into the board's oversight of executive-compensation plans is justified given the GSEs' public purposes and their large potential cost to taxpayers. Prudent public policy requires greater supervisory control over executive compensation at the GSEs, which would follow a precedent set in banking.

JEL Classification: G18, G21, G34, M52

Suggested Citation

Emmons, William R. and Sierra, Gregory E., Executive Compensation at Fannie Mae and Freddie Mac (October 26, 2004). FRB of St. Louis Working Paper No. 2004-06, Available at SSRN: https://ssrn.com/abstract=678404 or http://dx.doi.org/10.2139/ssrn.678404

William R. Emmons (Contact Author)

Federal Reserve Bank of St. Louis - Banking Supervision and Regulation ( email )

411 Locust St
Saint Louis, MO 63011
United States

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Gregory E. Sierra

Southern Illinois University Edwardsville ( email )

Campus Box 1104
Edwardsville, IL 62026-1102
United States
618-650-2633 (Phone)

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