What kind of CEO can’t manage a mortgage business in an era of low rates and a hot real-estate market? A government-sponsored one, apparently. With the help of Glass, Lewis & Co. LLC, we vote to “repo” Fannie Mae CEO Franklin D. Raines.
CEO: Franklin D. Raines
Tenure: 5 years
Total Shareholder Return: 5.2%
Peer Index Return: 14.6%
S&P 500 Return: -19.2%
Total CEO Pay: $52 million
Fannie Mae trades cash or securities for lenders’ mortgages, then manages the portfolio. Translation: Wake up breathing, earn fee. Yet Raines, who made $17 million in 2003, has presided over a flat stock price and bruised shareholder’s equity. Worse, the Office of Federal Housing Enterprise Oversight says Fannie Mae used improper accounting.
*Data from Glass, Lewis & Co. and FactSet Research Systems for five years ending May 11, 2004.