Fannie Mae Case Study

It is also imperative for the company to connect its compensation and benefit package with its overall objectives and plans along with aligning it with its HR plan.

There are many research institutions that are quick to point the finger and blame one specific entity or event for the events that occurred during the economic decline in 2008; however, the entire situation cannot be put onto the shoulders of one company, or the faults of one industry. There were several causes that played into the financial crisis, but two causes stand out as the pre-dominant elements of the collapse of major financial establishments: manipulation of the housing market by two government-funded companies, and the greed of wealthy Wall Street bankers and investors who knowingly took advantage of the system.

The pay plan reflecting compensation for employees will be reviewed and approved annually by the Board of Trustees. Budgetary limitations may restrict the ability of all Coastal

The agent provided several images and a text into the listing. It had the Incentive Offer available noting that Fannie Mae was offer an incentive for selling agents whose buyers purchased and closed on a selected HomePath property.

"The Wall Street Journal" found that the current bond yields were 0.20. These bonds are issued by the US government. In view of the fact that Fannie Mae Securities is a mortgage-backed securities issued by FNMA. We have observed that Fannie Mae and Treasury yields are somewhat different because FNMA Personal Securities and Treasury bonds are issued by the US government. Therefore, we note that there should be some difference between the two rates. As a result, Fannie Mae gets money from investors and financial institutions and sells their mortgages.

When approving compensation for directors, officers and employees, contractors, and any other compensation contract or arrangement, in addition to complying with the conflict of interest requirements and policies contained in the preceding and following sections of this article as well as the preceding paragraphs of this section of this article, the board or a duly constituted compensation committee of the board shall also comply with the following additional requirements and procedures:

However, there have been many cases where the CEO and executive officers receive outrageous compensation even when the companies suffer. Overall, there is a wide disconnect between the incentive of the executives and the financial performance of their company, which needs to be fixed. By passing regulations and rules such as the Dodd-Frank Act, there is hope of shedding light on the connection between the company’s performance and the executives pay. Although it will provide a clear insight, it will not be able to set a strict regulated compensation or define what an executive should earn. Instead regulations will allow for more transparency for the shareholders regarding corporate governance issues such as executive pay. Along with that, it will force companies to take accountability for their actions. If they do poorly, then the executives should be paid less, and vice versa. Overall, there should be a direct alignment between executive pay and the company’s

The barriers to enter seems to be on the medium scope of the analysis and this is because to enter the mortgage market there are many regulations set by government and other institutions to guarantee the clarity and transparency of the loans. Also, to enter this specific market there is the need for high capital investment which in todays economic is hard to achieve.

Throughout the conversation, Colby never mentioned that the home was in First Look and that Fannie Mae would not accept offers from investors during this period. Colby provided limited information about the home and did not mention the neighborhood or the surrounding area. When asked, Colby paused to reference the property file and informed me that it needed work, which included carpet, paint, kitchen appliances, and ceiling work. I asked, "Are there other offers?" He paused to reference the property file and then informed me that there was not. I asked, "Is the power on?" He paused and then informed me that it was. Colby answered my questions about the home clearly.

The agent provided one picture of the exterior and eleven of the interior. The pictures were of good quality.

Read the discussion case "Executive Compensation" on pages 190-192 then answer/discuss questions 1-7 that follow.

It was reasonable for a CEO’s compensation to increase as the company expanded and became a larger entity, and the newly-granted shares and increasing stock options further aligned the CEO’s personal interests with those of the company and shareholders. In this sense, the second compensation package was also well-structured and not excessive. Seeing Sunbeam’s revenue rising and stock price climbing steeply upwards, Sunbeam’s shareholders and directors were fully convinced by Dunlap’s leadership, so they might perceive the increase in compensation amount necessary to retain and better motivate Dunlap to enhance the company’s value. Nonetheless, they neglected the fact that the increased portion of the equity-based compensation also further motivated the CEO’s dangerous behaviors pertaining to improper earnings management.

A major role of this committee is the reviewing of the Company’s compensation strategy. Ensuring that the compensation strategy aligns with their goal to attract and retain high-quality leadership is crucial to the success of The Home Depot. They must make certain that management is awarded the appropriate incentives and rewarded appropriately for its contributions to the growth and profitability of the Company. The Home Depot’s compensation strategy must also align with all of the Company’s objectives and stockholder interests. ("Leadership development &," 2013)

Plastec needs to assess its current compensation system and identify its business objectives. By taking a look at the current pay system and assess the level at which it supports the objectives and the personnel necessary for the business. Some specific objectives can be extracted from the strategic plan such as quality productivity, service, team-work, cost reduction and so forth. After completion of their own internal review Plastec needs to compare its reviews against other competitors in the business. Various other organizations have fairly decent compensation packages such

Congress is continuously attempting to decide if Fannie Mae should be privatized or owned by the government. One thing the government should focus on is reducing the monopoly characteristics in Fannie Mae. With government intervention, Fannie Mae should be broken up into many smaller companies. This would spread the risk among the financial market and Fannie Mae would have to compete against other companies to stay in business. If unfortunate events lead to another economic crisis, the financial pressure would be placed on more than one company and investors would not have to rely on Fannie Mae to stay afloat (Reiss, David, 951-952). This idea was recently discussed among two senators, Bob Corker and Mark Warner who consider splitting Fannie’s single-family business from their multifamily business. They think the single-family businesses could then be split again into smaller companies (www.money.cnn.com).