Fannie Mae's chief regulator is reviewing whether the company paid too much in severance and bonuses to Chief Executive Franklin Raines and Chief Financial Officer J. Timothy Howard, who were...

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Fannie Mae’s chief regulator is reviewing whether the company paid too much in severance and bonuses to Chief Executive Franklin Raines and Chief Financial Officer J. Timothy Howard, who were ousted Tuesday because of accounting mistakes.

At stake for Raines is as much as $30 million in stock and options and a $1 million-a-year pension.

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Howard’s package includes about $13 million in stock and options and a $559,000 annual pension, according to an analysis by the Corporate Library, a corporate-governance adviser.

“We will be reviewing their termination packages, and should it be deemed they were unjustly enriched, we have the enforcement tools at our disposal to seek recovery,” Corinne Russell, a spokeswoman for the Office of Federal Housing Enterprise Oversight (OFHEO), said yesterday in Washington, D.C.

The dismissals of Raines and Howard came after the office and the Securities and Exchange Commission said Fannie Mae made mistakes in accounting for contracts designed to protect more than $900 billion of securities from interest-rate swings.

One issue to be determined is whether the Fannie Mae board should have dismissed Raines for cause rather than let him take early retirement.

If dismissed, Raines wouldn’t be able to take his options and stock, and his pension would be trimmed.

The severance packages “aren’t appropriate considering the accounting irregularities,” said Paul Lapides, director of the corporate-governance center at Kennesaw State University near Atlanta. “This may come back to haunt the board.”

Fannie Mae said earlier this year it had changed the employment contracts for Raines and Howard to allow the company to eliminate severance payments if the executives were fired for “fraudulent actions.”

Raines said in a statement Tuesday he was “retiring” in response to the SEC’s finding. A statement from the company that day announced the “retirement” of Raines and the “resignation” of Howard.

Fannie Mae spokesman Brian Faith declined to comment on the severance packages.

“In most companies, there’d be no recourse to a board giving a generous package to a retiring CEO,” said Paul Hodgson, a compensation consultant with the Portland, Maine-based Corporate Library.

“Fannie Mae has a government-charter, so OFHEO has to sign off.”

Michael Savage, a compensation consultant in Chicago at Aon Consulting, said Raines’ separation package “appears generous.”

“It just looks like he got a lot,” Savage said.

“But he was provided a lot of compensation to begin with, so it appears they were just accelerating what had been granted to him.”