Fannie Mae will pay its top executives retention bonuses of up to $611,000, the state-controlled mortgage lender and guarantor revealed yesterday amid the furore over compensation at AIG.

Meanwhile, a New York judge ordered Bank of America (BoA) to disclose the recipients of $3.6 million-worth of bonuses handed out to bankers at Merrill Lynch, the investment bank bought by BoA last September.

In a filing with the Securities and Exchange Commission, Fannie Mae said that it would pay Michael Williams, its chief operating officer, $611,000 this year to induce him to remain at the company, on top of his salary of $676,000.

Three executive vice-presidents at the company will receive between $470,000 and $517,000 each.

Fannie Mae was taken into Government conservatorship last September along with Freddie Mac, another giant mortgage lender, after making losses of $108 billion last year, mainly on defaulting home loans.

The companies have been promised as much as $200 billion in funding by the Government so that they can keep lending to American homebuyers. Their activities are overseen by the Federal Housing Finance Agency.

There was outcry this week after AIG revealed that it would pay $165 million in retention bonuses to 400 staff, despite having received more than $170 million in support from the Government.

Freddie Mac operates a similar staff retention plan to that of Fannie Mae but is not expected to disclose the amounts paid to its executives until the end of April.

Andrew Cuomo, the New York Attorney General, is investigating the bonus payments at AIG and at Merrill Lynch, where he suspects BoA shareholders were misled about the payments, which were paid in December, a month early and weeks before the investment bank unveiled a surprise $15.8 billion fourth-quarter loss.

The Attorney General suspects that some of the bankers who received early multi-million dollar bonuses may have been prompted to report larger than usual losses on their trading books as a result, to the detriment of shareholders.

Shareholders were not informed of the bonuses as part of the announcements made during the takeover of Merrill Lynch by BoA.

BoA had argued that the names of the recipients should remain private and declined to hand them over to Mr Cuomo.

But following weeks of legal argument, Supreme Court Justice Bernard Fried decided last night that BoA had not justified its desire to keep the names private for competition reasons.

BoA said that it would comply with Justice Fried's order and could provide the names to Mr Cuomo as early as Thursay.

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