Fannie Mae: Raines’ Pay Settlement

The AAO Weblog is a weblog published by Jack Ciesielski (bio), dealing with accounting issues and news topics related to investment and finance.

A couple of years after Fannie Mae’s financial reporting breakdown appeared (they still haven’t filed 2004 or 2005 financials), at least one milestone is nearly complete: the separation pay package for then-CEO Franklin Raines. He’s settling for $2.6 million.

Still up in the air, from this 8-K:

“• whether Mr. Raines is entitled to additional unpaid base salary of up to approximately $139,000 for the period from December 2004 to June 2005;

I’m sure that Fannie Mae shareholders have an answer of their own as to whether or not Mr. Raines is entitled to any of the above rewards. (Not to be printed here.) The settlement serves as a reminder that the restatement is yet to be complete; it’s slipped off my radar and I’m sure I’m not the only one. It also makes you wonder if they’re coming to a close on at least the 2004 statements.

• whether Mr. Raines’ employment agreement entitles him to awards under our Annual Incentive Plan for 2004 and 2005;

• whether Mr. Raines is entitled to specified share amounts under our Performance Share Plan, or PSP, up to a possible maximum of 561,480 shares;

• whether Mr. Raines is entitled to any shares for any award cycle under the PSP commencing in 2005; and

• whether Mr. Raines’ employment agreement entitles him to any additional stock options.

Final resolution of these issues is expected to be deferred until after the results of our accounting restatement are announced.”

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