Government-sponsored enterprise Fannie Mae released its first-quarter earnings report this week, revealing that it earned $1.9 billion in net income, down 64 percent from $5.3 billion the company reported in the first quarter of 2014.

The GSE’s net income fell short of analysts’ expected reporting of $2.6 billion. Fannie Mae attributed the sharp drop to a sizable derivative loss and a drop in credit-related income.

Fannie Mae reported a positive net worth of $3.6 billion during the first quarter, and it will send the U.S. Treasury $1.8 billion in June. The company received $116.1 billion in bailout funds from the federal government after being placed into conservatorship in 2008 following the financial crisis.

Despite the poor performance, the Federal Housing Finance Agency (FHFA), Fannie Mae’s regulator, said earlier this week that it is considering raising the CEO compensation for both Fannie Mae and Freddie Mac.

CEOs at both companies each earned $600,000 in salary without bonuses last year, which the FHFA said falls well below the average compensation of CEOs at similar companies.

The FHFA would like to see the pay increased to ensure CEO retention, planning and continuity. In 2011, Fannie Mae’s CEO earned a $5.3 million salary, but former FHFA Director Edward DeMarco slashed that compensation in 2012 in response to legislator concerns.

The Treasury Department, the Obama administration and some lawmakers may have plenty to say about this proposal, however, particularly in light of Fannie Mae’s earnings results. If Fannie Mae’s CEO does get a raise, compensation must not include a bonus and can’t be higher than the 25th percentile for positions at comparable companies.

Fannie Mae also said it provided approximately $124 billion in liquidity to the mortgage market and helped distressed families stay in their homes or avoid foreclosure through 34,000 loan workouts during the first quarter.

Email Amy Swinderman.

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