Management Turnover as Change Agent

Wednesday, August 27, 2008

As Ship Takes on More Water Fannie Mae Jettisons CFO and CBO

Fannie Mae FNM (NYSE) struggling to stay above water announced a late in day management shakeup that left the top of the firm CEO, Dan Mudd, still in place.  The current CFO, Stephen Swad, was leaving the company.  According to the company press release,
The executives include Peter Niculescu, who has assumed the duties of Chief Business Officer, as well as the appointments of David C. Hisey as Chief Financial Officer and Michael Shaw as Chief Risk Officer.
"After setting forth our capital and credit plan August 8, we are now putting a senior management structure in place to drive this plan across the company," Mudd said. "This team will be responsible for meeting the dual objectives of conserving capital and controlling credit losses while Fannie Mae continues to provide crucial liquidity to the U.S. housing and mortgage markets. As we move through the bottom of this cycle, maintaining capital, managing credit and driving revenues are the priorities — and we have to organize and staff accordingly."

..."The Board of Directors is firmly committed to Dan Mudd, the management restructuring, and the strategic objectives around capital and credit he set forth on August 8," Stephen B. Ashley, Chairman of the Board, said. "The Board will continue to work closely with Dan and his management team to guide the company and support the housing finance system through a very challenging period."
While Fannie Mae desperately needs management change it still appears to be too little and possibly too late.  Mudd may still ultimately be forced to leave.  Stay tuned.

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