Why Can’t You (or I) Get a Job as a Fannie Mae Director?
Why do some people get recruited for corporate boards while the rest of us grub away in dreary cubicles, strain our backs digging ditches, risk our lives as cops and firefighters, endanger our health as nurses and hospital workers or our sanity as schoolteachers… or – even worse – pound the pavement day after day, looking for work?
I have to admit that I don’t know the answer. Is it a question of “who you know”? If so, I should be on any number of boards, drawing fat paychecks for making savvy decisions. After all, I was a reporter for decades – a lot of the time covering Business – and I rubbed shoulders with the great and the near-great. But no one ever asked me to be a corporate board member.
I would have been available, for example, to join the new board at Fannie Mae, the corporation your government founded to ensure that funds are available for home loans. According to an item in the Washington Post, Fannie Mae named a bunch of new directors recently. (You will recall that the government has had to take over Fannie Mae because of the massive debt piled up by its former directors.)
The new directors get $160,000 a year – each. And the chairman of the board makes $290,000. Not bad for a part-time job. To perform my director’s duties I would probably average a day a week, or less. And I wouldn’t have to cudgel my brain that hard. After all, Fannie Mae is in government conservatorship, and most of the oversight responsibilities are handled by the Federal Housing Finance Agency.
Curiously, the new directors include the same financial “experts” who caused the current financial crisis. Three of the “new” directors were on the board when Fannie Mae went bankrupt. Two others come from bailed out corporate giants Merrill Lynch and Morgan Stanley. One new board member is a director of Sotheby’s (remember the price-fixing scandal?). And another used to be a top dog at the accounting firm that enabled the Enron rip-off a few years ago.
I guess the government agency responsible for picking the new directors wanted “experienced” financial folks. That seems to be the way it goes. If you become a director for one company, you stand a much better chance of getting on other boards. And it doesn’t seem to matter whether you did a lousy job. Nice work if you can get it, right? So where do we apply?
The illustration above is from the February issue of Vanity Fair magazine, which has the inside scoop on Fannie Mae, written by Bethany McLean. Photo (by Cameron Davidson) shows Fannie Mae’s headquarters, in Washington, D.C. and from left: former Fannie C.E.O. Jim Johnson, Congressman Barney Frank, former OFHEO director Armando Falcon, former Fannie C.E.O. Daniel Mudd, President Bush, Treasury Secretary Henry Paulson, former Fannie C.E.O. Franklin Raines, and Alan Greenspan.