Timothy J. Mayopoulos: Not About The Money

A big pay cut did not discourage Timothy J. Mayopoulos from taking on the CEO role at Fannie Mae. Perhaps it was simply the challenge to has a positive impact in a far from ideal setting.

Mayopoulos is the president and CEO OF Fannie Mae which is the dominant source of residential mortgage credit in the U.S.  secondary market.  The amount of money Fannie Mae deals with is staggering. As reported by the company from January 1, 2009 through December 31, 2012 it provided $3.3 trillion in mortgage credit. This allowed 2.7 million home purchases and 9.7 million mortgage refinancing.  It also went into conservatorship during the financial crisis.

To lead this private and government sponsored company means one must have a high level of experience and stature in the financial industry. Mayopoulos has that having been EVP and general counsel of Bank of America Corporation.  Before that he held senior management positions at Duetsche Bank AG, Credit Suisse First Boston, and Donaldson, Lufkin & Jenrette. Mayopoulos graduated from Cornell University and the New York University School of Law.

Mayopoulos joined Fannie May in April 2009 as EVP, general counsel, and corporate secretary and became chief administrative officer in 2010. Ironically in taking the top post he actually took a pay cut as part of Fannie Mae’s action to lower executive pay after the taxpayer bailout of the company. His pay for 2012 amounts to $2.6 million and will only be $600,000 in 2013.

Obviously money is not the main driver in taking the top post. Leading a company whose very future is in doubt given the desire by the public and lawmakers to reform the U.S financial and housing system is a challenge. He simply wants to do what he can at this critical time for the company specifically and the U.S. financial system in general.

Improved fundamentals has seen the housing market perk up and it now looks like Fannie Mae may be able to repay all it owes to taxpayers. Mayopoulos continues to make reforms and improve the performance of Fannie Mae.  There is still the bigger issue of reforms which may affect the company’s future or existence. Mayopoulos has shown though that he can make the best out of a tough situation.