Fannie Mae (OTCBB:FNMA) is showing signs of life. The housing market is improving and loss provisions are not a draconian as before. The stock which is a penny stock speculative also looks like an option with no expiration date. Big debate on if this can even be true. Uncle Sam has lent a lot of money. There is the awkward case of the preferreds having to be repaid and then will there be something left over for the investor.
Lets take a look at the board and see if we can see how they may or may not be stoked for future prospects.
Nine individuals sit as independent members. The average age is 62. The average tenure is five years. Most were appointed in 2008. There is a huge preponderance of highly reputable retired accountants and investment dealers. Sprinkle in a few quasi-political types who had experience in public housing and there’s the board.
The tell will be if they start to rebuild the board and move away from conservator styling to profit orientation. The average age is 62. So not too many full on I`m outta here retirements coming up.
Here’s a little skinny on the directors:
Brenda Gaines 62 was President & CEO of Diners Club. Former deputy chief of staff to mayor of Chicago, Chicago Housing Commissioner and previous to that twelve years experience with Dep’t of Housing and Urban Development. Her real estate experience is politically rooted and she will most likely be replaced if FNMA goes capitalist.
Robert Herz 58 was Chairman of FASB. Part time member of International Accounting Standards Board. Was a partner of PricewaterhouseCoopers. The ultimate numbers guy. But can he see the future.
Jonathan Plutzik 57 retired from Credit Suisse First Boston as vice chairman. Seems to be just dabbling for now.
Frederick B Bart Harvey III 62 was the Managing Director of Corporate Finance at Dean Witter Reynolds now Morgan Stanley. Has been on the board of Federal Home Loan Bank of Atlanta and Director National Housing Trust.
Charlynn Goins 69 was Chairperson of New York City Health and Hospitals, Senior Vice President Prudential Financial and chairperson New York Community Trust. Given her age and quasi-political background they will change her out.
David Sidwell 58 retired from Morgan Stanley as an EVP and CFO. Twenty years with JPMorgan Chase. started off business life with Price Waterhouse. He is there because he knows his way around the interior of a financial institution. If FNMA is no longer in crisis but is growing he will not be needed.
William Thomas Forrester 63 starting in 1984 eventually became CFO of Progressive. Another Price Waterhouse alumnus. Another director who knows the plumbing of a financial institution who will not be needed when the crisis is over.
Egbert LJ Perry 56. Chair & CEO of Integral Group a real estate advisory, investment management and development company. Was a director of the Fed Reserve in Atlanta. The Fed Reserve DNA has served other directors well. how much of a conflict of interest will Integral Group be.
Philip Laskawy 70 Retired as Chair and CEO of Ernst Young. Currently on board of General Motors, Henry Schein, Lazard and Loews. If FNMA re-enters the capitalistic world how many boards will he want to sit on.
Again the tell will be the changing character of the board of directors. In the mean time ten or twenty thousand for the long shot. We have all done worse.
George Gutowski writes from a caveat emptor perspective.