Fannie, Freddie Employees Watch Assets Plunge

By Clay Dillow, Newser Staff

Posted Aug 29, 2008 8:51 AM CDT

(Newser) – As the stock prices of mortgage giants Fannie Mae and Freddie Mac plunged 80% this year, employees of the companies helplessly watched their fortunes sink with the ship, the New York Times reports. For instance, Fannie Mae’s workers owned $116 million in company stock at the end of 2006; today it’s worth $17.5 million. The sale of stock and options paid to employees was often restricted, making diversification difficult.

Some executives were paid two-thirds of their compensations in stock and options, but even mid-level employees received as much as 20% in company assets. “If you joined in the ’80s, you did fairly well,” a Freddie economist said. “But if you joined in the last 10 years or so, those options wouldn’t be worth a whole lot to you.” Shares of both companies bounced this week on skepticism concerning a government bailout.

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Freddie Mac's employees have watched their assets plummet as their companies stock has shed 80 percent of it's value since the end of last year. (AP Photo/Pablo Martinez Monsivais, file)

Fannie Mae's employee stock ownership program restricts the sale of company stock, leaving workers' to watch helplessly as their assets followed the plunge in the firm's stock price. (AP Photo/Manuel Balce Ceneta, File)

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