WASHINGTON (Reuters) - The top U.S. housing regulator said on Thursday it approved 2009 pay packages of up to $6 million each for the chief executives of government-controlled mortgage giants Fannie Mae and Freddie Mac.

A woman takes a brochure detailing how homeowners can make their mortgage payments more affordable at the Fannie Mae booth set up at the Housing Rescue Fair, part of the National Urban League's Economic Empowerment Tour, in Dallas, Texas June 13, 2009. REUTERS/Jessica Rinaldi

The approvals were part of a wider decision by the Federal Housing Finance Agency on executive salaries at both firms. FHFA Acting Director Edward DeMarco said, on average, executive pay at the companies had dropped 40 percent from where it stood before the government seized them last year.

In filings with the Securities and Exchange Commission, the companies said Fannie Mae CEO Michael Williams and Freddie Mac CEO Charles Haldeman would each receive up to $6 million in total compensation for 2009.

Freddie Mac said the same figure would apply to the Haldeman’s pay package for next year, as well.

Fannie Mae and Freddie Mac, which play a role in funding three-fourths of all U.S. residential mortgages, were seized by the government and put into conservatorship in September 2008 at the peak of the credit crisis.

To continue playing that role in the U.S. mortgage market, Fannie and Freddie must “attract and retain the talent needed to accomplish these objectives,” DeMarco said.

The announcement came less than 24 hours after the Obama administration’s pay czar, Kenneth Feinberg, approved millions of dollars in pay for top executives at GM and GMAC. Feinberg oversees compensation plans at firms receiving money from the government’s $700 billion financial rescue fund.

FHFA said the Fannie Mae and Freddie Mac compensation plans use the same basic structure as the Feinberg plans and were approved in consultation with the U.S. Treasury.

Pay curbs imposed by Feinberg sent financial giants Citigroup Inc and Bank of America Corp rushing to exit the government bailout program to avoid compensation restrictions.

Fannie and Freddie do not have that luxury because the government now controls nearly 80 percent of each company.

HIGH BUT SHARP DEPARTURE FROM PAST

The CEO compensation packages are “more than what is needed for them to serve their function,” said Thomas Lawler, founder of Lawler Economic & Housing Consulting in Leesburg, Virginia. “To give to someone that much to just stay on makes you question just how critical they really are.”

Still, the pay packages at Fannie Mae and Freddie Mac represent a sharp departure from the practices in place at the height of the U.S. housing boom.

Former Fannie Mae Chief Executive Franklin Raines was paid $91 million between 1998 and 2003, some of which was clawed back in a settlement with regulators over his role in an accounting scandal at the company. His successor, Daniel Mudd, was paid $13.4 million in 2007.

Williams took the helm of Fannie Mae in April when the company’s previous CEO, Herb Allison, took a job at the Treasury Department overseeing the financial bailout fund. Allison, who had declined to take a salary while at Fannie Mae, now makes in the low six figures annually.

Haldeman took the Freddie Mac position in July and the company then disclosed he would be paid $900,000 in salary without disclosing other forms of compensation. Haldeman is the former chief executive of Putnam Investments in Boston.

The companies and their regulator said the executive pay packages for 2009 and 2010 would consist of a base salary, performance-linked incentive pay and a deferred salary.