CEO Salaries Weather Mortgage Crisis

July 21, 2008— -- The chiefs of the nation's two largest mortgage lenders reaped roughly $30 million in salary, incentives and other perks last year, despite setting their banks on courses which now may require government bailouts.

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.

In addition to Syron's 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.

"Yes, yes," said Freddie Mac spokeswoman Sharon McHale, when asked if Syron's leadership was worth $18 million a year. "He's done a lot."

Syron led the overhaul of the institution's lax accounting controls following an earlier scandal before his tenure, McHale noted. "Under his leadership the company continues to do a lot for homebuyers and the housing market," she said, including playing "a major stabilizing role in the marketplace."

Fannie and Freddie, which hold or guarantee nearly half of the $12 trillion U.S. mortgage market, have seen their stock prices tumble from over $60 a share in 2007 to under $10 last week as the ongoing foreclosure crisis sparks worry among investors that the companies don't have money at hand to cover defaulting borrowers.

Despite the worries, many believe that the U.S. government would stand behind the lenders even if they faced high default rates. Indeed, the Treasury Department and the Federal Reserve recently took steps to increase the banks' ability to borrow from the government. On Capitol Hill, lawmakers began weighing their options on how best to rescue the beleagured institutions.

Fannie Mae CEO Mudd said last week that while "this is the right time to think about" the federal government coming to his bank's rescue, "I don't think we'll need it."