In the Monday edition of the New York Time’s, a consulting firm estimated the ousted CEO of Fannie Mae, Daniel Mudd, stands to collect about $9.3 million in severance pay. Addressing this article, Barack Obama senta letter  to Treasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart stating:

“Under no circumstances should the executives of these institutions earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources,” 

“It would be a gross violation of the public trust to fail to use this authority now, while American taxpayers and American homeowners, already struggling in a weak economy, are being asked to accept an historic intervention to rescue these institutions,”

While I may not agree with some of Barack Obama’s on a few issues, I completely agree with him on this one. The takeover of Fannie Mae and Freddie Mac was necessary to prevent a larger econmic problem for the United States. In the end, the takeover could end up costing US tax payers billions of dollars. Under no circumstances should we be rewarding CEOs for failure.

What do you think? Should Daniel Mudd receive a large severance package for his work at Fannie Mae?

Tags: barack obama, daniel mudd, fannie mae, freddie mac, henry paulson, james lockhart, severance