Freddie Mac to Replace Half Its Board, CEO Says

Freddie Mac will replace half its board by 2005 and offer new pay incentives to executives in a plan aimed at making expanded homeownership its top goal, Chief Executive Richard Syron said Thursday.

The mortgage finance company has lost “sight of our fundamental objective of increasing homeownership,” Syron said in a speech at the University of Texas in Austin.

Freddie Mac, whose accounting is being investigated by its federal regulator, has 13 directors.

The government-chartered, shareholder-owned company had 18 board members until the Bush administration said in February that it didn’t intend to renew any of its five presidential appointees.

Syron, a former chairman of the American Stock Exchange, is Freddie Mac’s third chief executive in a year. He was hired after the McLean, Va.-based company said it understated earnings from 2000 until 2002 by $5 billion.

Freddie Mac is improving its accounting and will require directors to “hold compensation in Freddie Mac stock, so they have a greater stake in the company’s success,” Syron said.

The company will announce more than 22 new programs by 2005 aimed at making homeownership more affordable, Syron said. He didn’t elaborate on those steps.

Freddie Mac and Fannie Mae own or guarantee about half of the $7.3-trillion U.S. home mortgage market. They buy mortgages from lenders, which they either keep or package as securities for sale to investors.