Newsmaker

Every Friday, we choose an alum who has been making headlines—for better or for worse.
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Herbert M. Allison Jr. ’65

By the staff | 9:48am September 12 2008

As the new chief executive of the troubled Federal National Mortgage Association (Fannie Mae), Herbert M. Allison Jr. ’65 may have to make some unpopular decisions. But that might not be a problem for the man who in 2003, as CEO of TIAA-CREF, eliminated 500 jobs. (Employees called the layoffs “Herbicides.”) Allison also ordered layoffs at Merrill Lynch during his two years as president of the brokerage in the late 1990s.

Allison was named to head Fannie Mae on September 7, when the federal government announced it would take over the lender and its cousin Freddie Mac, both of which were at risk of failure from the mortgage crisis. One thing’s for sure: Allison’s not just in it for the money. James Lockhart ’68 (a previous Yalie of the Week), the Bush administration official responsible for oversight of the companies, has already said the new CEOs’ pay will be “significantly lower” than the much-criticized packages of their predecessors.

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