Legal chief at US mortgage giant set to earn $3m after government bailout

The general counsel of US mortgage giant Fannie Mae is set to receive almost $3m (£1.9m) in pay and bonuses after the US Goverment announced it will provide uncapped support to the company over the next three years, reports Corporate Counsel.

Fannie Mae GC Timothy Mayopolous - who was fired as legal chief of Bank of America last year during the Merrill Lynch merger talks - is set to earn up to $2.95m (£1.85m), including an incentive bonus of nearly $1m (£630,000), according to regulatory filings.

On 24 December last year, the US Government announced that it would provide uncapped support to Fannie Mae and fellow mortgage company Freddie Mac over the next three years and pay out a total of $42m (£26.4m) in compensation to top executives at the companies.

General counsel have until now largely avoided the spotlight in the ongoing controversy over executive compensation.

Officials at the Federal Housing Finance Agency, Fannie's regulator, defended the pay packages in an official statement, saying they are on average less than they were before the US Government took over.

"As this debate progresses, it will be essential that the enterprises continue to perform their current role," acting director Edward DeMarco said. "The enterprises must attract and retain the talent needed to accomplish these objectives."

Susan Hackett, GC of the Association of Corporate Counsel, said that legal heads at bailed-out companies may work long hours seven days a week to earn their lucrative pay packages, but added that "it is tone deaf in today's environment to not recognise that a lot of people are going to say that [this level of pay] is inappropriate."

Mayopolous is not the only legal chief caught up in the controversy over compensation. American International Group GC Anastasia Kelly, who resigned in December after her salary was cut, will reportedly receive a severance package worth several million dollars.

Corporate Counsel is a US sister title of Legal Week.

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