WASHINGTON — The men tapped to lead Fannie Mae and Freddie Mac through unprecedented difficulty bring a wealth of experience and reputations of integrity — and they’ll need both, financial experts said.
“These guys have a helluva job on their hands,” said Bert Ely, an Alexandria, Va.-based banking consultant.
Herbert Allison was named chief executive of Fannie Mae and David Moffett the new CEO of Freddie Mac on Sunday as part of the Treasury Department’s takeover of the huge mortgage-financing agencies.
Allison replaces Daniel Mudd and Moffett takes over from Richard Syron. Mudd received $12.2 million in compensation in 2007 and Syron was paid $19.8 million, prompting some members of Congress last month to seek curbs on pay for the companies’ executives.
James Lockhart, director of the Federal Housing Finance Agency, regulator of the companies, said Sunday that compensation for the new executives will be “significantly lower than the outgoing CEOs.”
Allison, 65, worked for Merrill Lynch & Co. Inc. for 28 years, rising to president and chief operating officer before leaving the firm in July 1999.
At Merrill, he pushed the company to adopt online trading to compete with discount brokers such as Charles Schwab & Co., a move that reportedly caused friction with other executives.
Allison was chairman and chief executive of TIAA-CREF from 2002 until April of this year. TIAA-CREF manages $420 billion of retirement funds for teachers and nonprofit workers.
Allison is politically connected, having served as the national finance chairman during Sen. John McCain’s 2000 presidential run.
Moffett, 56, a senior adviser to the private equity firm the Carlyle Group, gets high marks from financial experts for his management experience.
Moffett joined Star Bank Corp. in 1993, which became U.S. Bancorp. He oversaw more than 30 acquisitions as the company grew from less than $1 billion to approximately $20 billion in revenue and less than $1 billion to $60 billion in market capitalization.
