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This report includes a summary of key changes, including the salary level test and salary basis test.

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June 16, 2003
Freddie Mac's Executive Parachute under Scrutiny
Regulators and lawmakers have asked Freddie Mac, a government-chartered financier of home mortgages, to withhold severance packages from former executives forced out of the company on June 6, until more information is revealed about their departures, the New York Times reports.

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Freddie Mac fired its president and forced the resignations of its chairman and chief executive and chief financial officer.

A special counsel is investigating accounting irregularities at the company.

The company came under increased scrutiny after the firm disclosed that it would pay about $24 million in stock options, salary and bonus as a severance package to its former chief executive, the newspaper reports.

Richard H. Baker, R-La., wrote in a letter to the company's federal regulator that the severance packages should be held until more information is revealed on why the company forced out the executives, according to the newspaper. Baker is chairman of the House subcommittee that oversees the company.

"We are deeply concerned that these individuals would be granted these types of severance packages before their roles in the current troubles of Freddie Mac are clearly understood," Baker wrote to Armando Falcon, director of the Office of Federal Housing Enterprise Oversight.

Falcon has ordered the company to withhold the severance packages until they are reviewed, the newspaper reports.


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