I don’t know if I am impressed or appalled by the fact that Fannie Mae and Freddie Mac are in the #1 and #3 positions in the world for the amount of money they make per employee. If the record was set by a private or public business, I would be impressed — as long as it is was done legitimately. But as a government-held enterprise?
Maybe they are just so efficiently managed that they deserve to be in those top spots. Or do they have a monopoly and can charge and do whatever they want? Fannie and Freddie provide mortgages to help people achieve the American dream of homeownership. In light of that, one would think they could help to make it more affordable by charging less and make less per employee.
Like I said, I don’t know if this is good or bad. If they are managing as efficiently as possible, then good for them. Maybe other government entities could take a page from their playbook. See what you think when you read the article below, and check the chart, too.
Fannie and Freddie make more money per employee than almost any other company
GSEs’ profit per employee is among highest in the world / December 28, 2017 / Ben Lane for HousingWire
What Fannie Mae and Freddie Mac do with the money they make has long been a debate in the housing finance world.
Some argued that the government-sponsored enterprises should be allowed to retain all their profits, while others argued that the GSEs’ profits should continue to flow to the Department of the Treasury, as they have since the government took the companies into conservatorship.
There was finally movement in that argument last week, when the Federal Housing Finance Agency announced that each of the GSEs will be allowed to keep some of their profits to cover against a potential draw from the Treasury amid the “normal course” of business.
But new analysis from Visual Capitalist (via Business Insider) puts the GSEs’ business into stark perspective.
According to the report, Fannie and Freddie make more money per employee than almost every other company in the entire world.
In fact, the GSEs take up two of the top three spots on the list of highest profit per employee among the most profitable companies on the Fortune Global 500 list.
Fannie Mae takes the top spot, well above any other company in the world.
According to the report, Fannie Mae makes $1.76 million per employee, more than $200,000 above the second place finisher – Gilead Sciences, a pharmaceutical company.
Freddie checks in at #3, with a profit per employee of $1.31 million.
Freddie’s profit per employee is more than double the fourth place company: Facebook – that tiny social network you may have heard of once or twice.
Facebook makes just shy of $600,000 per employee.
Other companies in the top 20: Apple, Alphabet, Goldman Sachs, SoftBank Group, and Microsoft.
But each of those companies pale in comparison to the profits per employee of the GSEs. As the report notes: “Creating a secondary market for mortgages isn’t the most labor intensive industry, but it is profitable.”
Ain’t that the truth.
Check out this chart: