Martin F. Baumann, executive vice president of Finance and Chief Financial Officer (CFO) of Freddie Mac, today announced his resignation.
“Marty Baumann has been a key contributor to the turnaround currently underway at Freddie Mac,” Richard Syron, Freddie Mac’s chairman and CEO, said in a prepared statement about the resignation. “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. Marty has also been a valuable member of our management team. On behalf of Freddie Mac I want to thank Marty for his tireless service and wish him well.”
Baumann joined Freddie Mac in March 2003 as executive vice president of Finance, after a 30-year career with PricewaterhouseCoopers. His resignation is not expected to affect the company’s announced plan to release quarterly and full-year 2005 financial results in May 2006. Freddie Mac’s President and Chief Operating Officer (COO) Eugene McQuade, will assume Baumann’s responsibilities, effective immediately, while the company conducts a search for Baumann’s successor, with the help of an executive recruiting firm.
“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 prepared statement. “This was challenging work, and we accomplished a great deal. I am equally proud of the dedicated and talented team we have assembled to help guide the Finance function into the future.”
Baumann’s resignation comes just weeks after it was announced that Freddie Mac will hold its quarterly market update conference call on March 30. MarketWatch quotes Bauman as saying, “Our efforts to accelerate our previously planned controls initiatives and implement reporting enhancements are substantial. We continue to work hard to strengthen our controls for financial reporting and we continue to invest heavily both in systems and in the human resources we need.”
The resignation is not expected to impact the call during which management is expected to discuss Freddie Mac’s business and primary financial performance for 2005 and its expected financial reporting schedule and business outlook for 2006.
Last week, Freddie Mac reported the rates on 30-year mortgages, 15-year mortgages and 5-year hybrid ARM loans, fell slightly. Additional accounting problems were discovered with Freddie Mac’s sister company Fannie Mae as well, encouraging those like Emil Henry, Treasury assistant secretary for financial institutions, who are pressing Congress to pass legislation limiting the portfolio holdings and increasing the federal oversight of both companies.