Fannie Details Executive Pay

Raines is promised a $1.3 million annual retirement benefit.
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Federal regulators are reviewing the generous pay packages promised to two outgoing executives of scandal-tainted

Fannie Mae

(FNM)

.

In a filing with the

Securities and Exchange Commission

, the mortgage giant disclosed that departing CEO Franklin Raines is slated to receive a $1.3 million retirement benefit annually. CFO Timothy Howard, who resigned, is scheduled to receive a $433,000 annual payment.

The pension outlays are in addition to a package of stock options and deferred compensation for Raines that currently approaches $20 million.

Both executives left positions with Fannie Mae last week amid a burgeoning accounting scandal that will result in $9 billion of earnings being restated off the company's books. Raines technically retired from his post, while Howard resigned.

The nomenclature could prove significant for Raines, whose ability to collect the benefit would be complicated had he been terminated for cause. The Office of Federal Housing Enterprise Oversight was already said to be probing the executives' compensation, particularly performance bonuses paid for earnings milestones that now look suspect.

If the agency finds Raines and Howard were "unjustly enriched, we have enforcement tools at our disposal to seek recovery," an OFHEO spokeswoman told

The Wall Street Journal

.

Fannie has been reeling ever since SEC accountants determined it had misapplied accounting rules to its massive book of derivatives that it uses to hedge against interest rate fluctuations. The federally chartered company, which was created by Congress to make a secondary market in home loans, must resubmit three years of financial statements to correct the error, a procedure that could take years.