Religious Groups Press Freddie to Tie Executive Pay to Low-Income Lending
Prakash, Snigdha, American Banker
WASHINGTON -- The debate over socially responsible mortgage lending is moving into the realm of executive compensation.
A small group of shareholders is pressing the Federal Home Loan Mortgage Corp. to link the compensation of its top executives to the agency's performance in meeting targets for lower income lending.
The shareholder group, made up of six religious orders, made its proposal in Freddie Mac's recently released proxy statement. It is believed to be the first time shareholders have offered such a plan for a mortgage concern.
Freddie Mac's management, led by chief executive Leland brendsel, is opposing the plan.
Though the measure is slated for vote at Freddie Mac's annual meeting next month, it is by no means assured of approval.
Social proposals have usually received less than 5% of the vote at annual meetings. But percentages have risen in some recent instances, as institutional investors have lent their support. Freddie Mac is widely held by institutions, but no institutional support for the compensation proposal is visible.
Nonetheless, the measure underscores how activist groups are boardending their efforts to make financial institutions extend more credit to people of low and moderate income.
The proxy statement shows Mr. …