Your Financial Window

The companies' chief execu¬tives will leave after banking millions and taking millions more on the way out the door, while shareholders in Fannie Mae and Freddie Mac saw their stock nearly disappear on Monday.

Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron are stepping down and helping with the transition of their companies into federal entities under the Federal Housing Finance Agency. The agency has not said how much they will earn in their new roles.

According to the Los Angeles Times, Mudd earned US$11.6 million (Bt400 million) in 2007 and Syron made $18.3 million. In both cases, a large portion of their pay packages included stock that was valued much higher at the end of 2007 than it was on Monday, when it was trading at less than $1 a share.

By conservative estimates, Mudd and Syron will leave with an additional $7.3 million and $6.3 million respectively as part of a severance package, according to an analysis by Paul Hodgsen at the Corporate Library. Both also will be able to continue to receive health benefits and possibly life insur¬ance until at least age 65.

"Had they left at the end of December, they both would have walked away with more than $20 million, but the drop in the stock price has had a dramatic impact," said Hodgsen, a senior research associate. "It's still a substan¬tial payoff for an executive who has managed a company so badly that the federal govern¬ment has had to step in and save it."

The amounts are much small¬er than those earned by other CEOs fired recently after their companies stumbled. Stanley O'Neill left Merrill Lynch with a retirement package worth more than $160 million, while Charles Prince, the head of Citigroup, left with a $40mil¬lion deal.

Still, some market watchers think Mudd and Syron should leave with little more than the contents of their desks.

"It's just another example of pay for failure," said Amy Borrus, deputy director of the Council of Institutional Investors.

Mudd and Syron were brought in to reform the trou¬bled mortgage giants.

Fannie Mae fired previous CEO Franklin Raines in December 2004 after account¬ing errors forced the company to restate profits by $9 billion.

Is there something in these events familiar to Thai taxpay¬ers? Just think back to 1997 and recall what happened at many corporations in those days.