Anyone know what the two largest financial entities in the world are? With ~$5T in liabilities, $FNMA and $FMCC

By all means, let’s make sure the folks running them aren’t even being paid anywhere near market value for their services. Maybe if Vitter and Warren get their way we can troll Taco Bell employees and see who will run them for $15/hr? Just think of the money we’d save taxpayers in salaries!!!!

So now we have the CEO of one of the largest financial institutions in the world, one that touches just about every single person in the US via the housing market being paid $600k, a small fraction of what he could earn elsewhere. i mean, Warren herself taught Law at Harvard and cleared ~$400K. So we are saying that a Law professor, who actually teaches ~5hr a week should make just under what the CEO of a sprawling financial giant should make? Really? Great plan…..would anyone here blame him if he stood up from his desk, called each of them and told them to “Go f%^k yourself” and walked out? I wouldn’t…..

This is what happens when you let government run businesses…..really stupid things…….

(Washington, D.C.) – U.S. Senators David Vitter (R-La.) and Elizabeth Warren (D-Mass.), members of the Senate Banking Committee, announced that last night the U.S. Senate passed their bipartisan legislation, S. 2036, which would cap pay raises for executives at Fannie Mae and Freddie Mac, authorized earlier this year by the Federal Housing Finance Agency (FHFA). The mortgage lenders cost the taxpayers $187.5 billion during the financial crisis.

“Giving massive taxpayer-funded pay raises to Fannie Mae and Freddie Mac isn’t just out of touch – it’s downright offensive. These two companies are wards of the state. They exist in the current form only because folks across the country paid to bail out the mortgage giants during the financial crisis. In fact, they’d still be on the hook if Fannie Mae and Freddie Mac incurred further losses,” Vitter said. “Congressman Royce’s hard work in the House built momentum to pass this important bill, and with last night’s vote, the Senate has unanimously agreed that capping these pay raises is the common-sense, responsible course of action.”

“Taxpayers paid nearly $200 billion to bail out Fannie and Freddie, the enterprises remain in federal conservatorship, and the public is still on the hook if they falter again. Rather than approving massive pay raises for Fannie’s and Freddie’s CEOs, FHFA should be working to reduce costs for homeowners and those who hope to own homes,” said Warren.

FHFA authorized new executive compensation plans for the position of Chief Executive Officer as high as $7.26 million a year. The Vitter-Warren legislation would suspend the $4 million per year compensation packages and limit their total compensation to the prior level of $600,000 a year each.

This legislation is nearly identical to a bill authored by Congressman Ed Royce (R-Calif.), H.R. 2243, which passed out of the House Committee on Financial Services in July on a nearly unanimous vote.

Being the co-sponsor…this bill is effectively dead…

Bloomberg:

Senator Elizabeth Warren is withdrawing her support for a Republican bill that had been on the fast track to bar the Treasury Department from selling Fannie Mae and Freddie Mac preferred shares, according to a person familiar with the matter.

Warren, who originally cosponsored the legislation, pulled her endorsement because the bill still allows the entities’ guarantee fees to be used to cover government spending, said a person familiar with her thinking who asked not to be identified because the matter is private. Those fees, which Fannie Mae and Freddie Mac charge to lenders to protect against losses, could be passed down to low-income borrowers if they’re increased.

Without Warren’s support, the legislation will have difficulty moving to the floor of the Senate this week. Warren, a Massachusetts Democrat, wasn’t available to comment on the bill.

The Fannie Mae and Freddie Mac legislation by Senator Bob Corker, a Tennessee Republican, calls for preventing Treasury from selling or liquidating the preferred shares until Congress approves a housing-finance overhaul. The bill would be a blow to investors such as hedge funds that have made a long-shot bet on the companies’ stock paying off because it would block them from receiving a payout for their shares.

Hedge fund firms such as Pershing Square Capital Management and Fairholme Capital Management are challenging the U.S. takeover of Fannie Mae and Freddie Mac in federal court to stop an arrangement in which the Treasury takes all of the entities’ profits as a dividend on the $187.5 billion taxpayer bailout the companies required after the 2008 financial crisis.

Corker attempted to fast track his legislation, cosponsored by Senator David Vitter, a Louisiana Republican, to a Senate floor vote last week and was met with opposition from Democrats. Senator Sherrod Brown, an Ohio Democrat and the top Democrat on the Banking Committee, had put a hold on the bill. He prefers a comprehensive approach to Fannie Mae and Freddie Mac reform rather than piecemeal legislation, said Greg Vadala, a spokesman for Brown. Vadala declined to comment further on Corker’s bill. If Brown were to lift the block, it could clear the way for the legislation to pass quickly in the Senate.

Fannie Mae has returned $142.5 billion to the U.S. Treasury under conservatorship since 2008, while Freddie Mac has returned $96.5 billion, according to their most recent disclosures.