The federal government will not pay the ousted chief executives of mortgage finance companies Fannie Mae and Freddie Mac up to $24 million in exit packages. The Federal Housing Finance Agency notified former Fannie Mae CEO Daniel Mudd and former Freddie Mac CEO Richard Syron that such "golden parachute" payments will not be paid. The housing agency, which took control of the companies earlier this month, made the announcement Sunday. "It would have been unconscionable to award these inflated salaries, particularly when the leadership of Fannie and Freddie can hardly be given good grades," Sen. Charles Schumer, D-N.Y., said in a statement. Mudd had been due to receive up to $8.4 million in compensation, while Syron was due to receive up to $15.5 million, according to calculations by David Schmidt, a senior consultant at executive compensation consulting firm James F. Reda & Associates.Former KB Home chief pays $7.2 million
The former chairman and chief executive of home builder KB Home paid nearly $7.2 million to settle charges of backdating stock options, the Securities and Exchange Commission (SEC) said Monday. Without admitting or denying the allegations, Bruce Karatz paid $6.7 million in charges and a $480,000 penalty to settle charges that he engaged in a multiyear scheme to backdate stock options to himself, company officers and employees. The SEC barred Karatz from serving as an officer or director of a public company for five years. The SEC alleged that Karatz engaged in backdating from at least 1999 to 2005 and profited more than $6 million from exercising those options. "As alleged in our complaint, Karatz improperly increased his compensation by millions of dollars without telling KB Home shareholders," said Linda Chatman Thomsen, director of the SEC's division of enforcement. Karatz stepped down as chairman and CEO of Los Angeles-based KB Home in 2006 after an internal report showed the homebuilder incorrectly reported stock option grants.Lufthansa moves to buy Brussels Airlines
Germany's Lufthansa AG has moved to take over Brussels Airlines, buying a 45 percent stake in the holding company that owns the Belgian carrier for 65 million euros ($91.4 million), the companies said Monday. Lufthansa gains the option to take over all of Brussels Airlines in 2011 for a price not exceeding 250 million euros ($351.6 million). The merger is the latest move in the consolidation of Europe's airlines. The deal is dependent on regulator approval and support from Lufthansa's supervisory board and the shareholders and board of Brussels Airlines.