ASSOCIATED PRESS
The president of Freddie Mac has turned down an offer to become the next chief executive of the mortgage company.
Eugene McQuade, who has served as president since September 2004, will leave McLean-based Freddie Mac when his contract ends Sept. 1, the company said yesterday. Mr. McQuade has agreed to seek re-election to the company’s board of directors at the next shareholders’ meeting June 8.
Mr. McQuade joined the company with the understanding that he would eventually take over the chief executive role, Freddie Mac spokeswoman Sharon McHale said. Richard Syron, the current chairman and chief executive, agreed with federal regulators several years ago to split the chairman and chief executive positions in a bid to improve corporate governance, Miss McHale said.
Mr. Syron still intends to hand off the CEO position to someone else, she said, though there is no timetable for doing so. The company’s board of directors has formed a committee to determine Freddie Mac’s next steps.
James Lockhart, director of the Office of Federal Housing Enterprise Oversight, which regulates Freddie Mac and its fellow mortgage underwriter Fannie Mae, urged the government-sponsored company to follow through promptly on its promise to separate the two leadership positions.
“OFHEO expects the board of directors and Chairman Syron to address leadership succession with due deliberation and in a timely manner,” Mr. Lockhart said in a written statement.
Bert Ely, a banking consultant and critic of Freddie Mac’s, said that Mr. Syron has been reluctant to give up the CEO position.
He has “been dragging his feet on this since the beginning,” Mr. Ely said.
The company, the nation’s second-largest buyer and guarantor of home mortgages, is emerging from a financial scandal in 2003. Freddie Mac disclosed that year that it had misstated earnings by at least $5 billion for 2000 through 2002. The agency paid a then-record $125 million fine in a civil settlement with regulators.
Mr. Syron said yesterday that Mr. McQuade had overseen the company’s “financial reporting remediation program” as well as an effort to strengthen customer relationships.
The mortgage financier has said it will return to reporting its financial results on a quarterly basis in June, when it releases results for the quarter ended March 31. The company has reported only annual results since 2002.
Freddie Mac also said that Ronald Poe, the longest-serving member of the board of directors, will retire when his term ends during the annual shareholders’ meeting in June.
The company said that Nicolas Retsinas, director of Harvard’s Joint Center for Housing Studies, has been nominated to replace him.
Shares of Freddie Mac increased $1.12 to close at $65.90 on the New York Stock Exchange.
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