Freddie Mac CFO resigns
March 27, 2006
Freddie Mac on Wednesday announced the resignation of Martin Baumann, the home mortgage lender's executive vice president of finance and chief financial officer.
Freddie Mac's president and chief operating officer, Eugene McQuade, will assume the CFO duties effective immediately while the company conducts a search for Baumann's successor, the McLean, Va.-based company said.
Richard Syron, Freddie Mac's chairman and chief executive officer, said Baumann has been "a key contributor to the turnaround currently underway at Freddie Mac."
Freddie Mac, like Fannie Mae, is working its way out of an accounting scandal. Both firms are government-sponsored enterprises created to assist housing.
"Since joining the company in 2003, Marty has helped Freddie Mac complete its earnings restatement, release its 2003 and 2004 financial results on an improving timeline, develop a talented and dedicated accounting policy team, resolve an extraordinary number of accounting policy issues, and improve the transparency of the financial data we provide to investors," Syron said.
Freddie Mac said Baumann's resignation isn't expected to affect the company's announced plans to release its quarterly and full-year 2005 financial results in May 2006.
A Fox-Pitt, Kelton research note said it's "hard to interpret the resignation of Freddie Mac's CFO has a neutral or positive event." Saying the timing could not be worse, the research note said the resignation comes on the heels of the company missing its March 31, 2006, goal for filing Generally Accepted Accounting Principles-compliant financials with its regulator, the Office of Federal Housing Enterprise Oversight.
"In addition, it seems like a hasty decision as no successor is in place and the company will start the search today," the research note said.
The company press release announcing the move gave no reason for the resignation, but a company spokeswoman said Baumann, 58, had concentrated on accounting policy and felt his work was largely complete. She said his original two-year contract was extended for a year last March and that this was a logical time for him to make a decision.
"We have made great progress over the past three years, including completing the restatement of prior years' earnings and rebuilding the company's accounting policy function," Baumann said in a statement.
Baumann joined Freddie Mac in March 2003 as executive vice president for finance with responsibility for accounting, corporate planning, taxation and capital management. He was named CFO in June 2003.
Baumann joined Freddie Mac after a 30-year career at PricewaterhouseCoopers.
Coopyright 2006 Associated Press