Senators press Obama administration on excessive Freddie Mac salary

“We are troubled after news reports shed light on the $600,000 salary that former JP Morgan Vice Chairman Donald Layton will now receive as Freddie Mac’s new Chief Executive so quickly after your announcement,” they wrote to FHFA Chairman Edward DeMarco. “It is important to maintain your commitment to the target salary, as you work to rebuild the confidence of the American public.”

{mosads}The senators said they were also concerned about the message being sent to Americans by placing a former vice chairman from JPMorgan Chase in a leadership position at a taxpayer-supported institution while he maintains stock options with JPMorgan, a company with which FHFA does business.

“Mr. Layton has agreed to recuse himself from matters related to JP Morgan ‘in specified circumstances,’ but these circumstances should be clearly defined and the relationship between the two entities must be closely monitored to avoid any conflict of interest,” the senators wrote.

They also demanded an update on executive compensation for both Fannie Mae and Freddie Mac. Members of Congress increasingly got involved in how the two financial institutions were run last November, after FHFA approved $12.7 million in bonuses to top executives. In addition, part of the Stop Trading on Congressional Knowledge Act (STOCK Act) prohibits bonuses for senior executives at Fannie Mae and Freddie Mac.

Other signatories to the letter were Sens. John Barrasso (R-Wyo.), Richard Blumenthal (D-Conn.), Bob Casey Jr. (D-Pa.), Lindsey Graham (R-S.C.), Mark Pryor (D-Ark.), Jim Webb (D-Va.), Sheldon Whitehouse (D-R.I.) and Ron Wyden (D-Ore.).