Politics

Oversight Committee to Examine Mortgage CEO Severance Packages

By Jesse Lee

As part of its ongoing investigation into executive pay, the Oversight Committee has invited three CEOs implicated in the subprime mortgage crisis to testify on February 7, 2008, about their severance and compensation packages.

Read letters to Charles Prince, the former CEO of Citigroup (pdf) and E. Stanley O?Neal, the former CEO of Merrill Lynch (pdf).

Full letter to Angelo R. Mozilo, the CEO of Countrywide Financial (pdf):

January 14, 2008

Mr. Angelo R. Mozilo
Chairman and CEO
Countrywide Financial Corporation
4500 Park Granada
Calabasas, CA 91302

Dear Mr. Mozilo:

I am writing to request your testimony at a hearing on February 7, 2008, before the Committee on Oversight and Govemment Reform. The hearing will address executive compensation and severance arrangements for CEOs involved in the ongoing mortgage crisis.

According to recent press reports, if Bank of America completes its proposed purchase of Countrywide Financial, you stand to collect tens of millions of dollars in severance payments and other compensation. I request that you be prepared to provide your perspective on this reported pay package. You should plan to address how it aligns with the interests of Countrywide’s shareholders and whether this level of compensation is justified in light of your company’s recent performance and its role in the national mortgage crisis.

The Committee on Oversight and Govemment Reform is the principal oversight committee in the House of Representatives and has broad oversight jurisdiction as set forth in House Rule X. An attachment to this letter provides additional information about testifying before the Committee.

If you have any questions regarding this letter, please contact Roger Sherman or David Leviss of the Committee staff at (202) 225-5051.

Sincerely,

Henry A. Waxman
Chairman

Enclosure
cc: Tom Davis
Ranking Minority Member

Countrywide’s Mozilo To Leave In Luxury
Andrew Farrell, Forbes - January 14, 2007

Angelo Mozilo made nearly $150 million selling Countrywide shares before they tanked. The mortgage lender’s chief executive can nearly double that windfall and also earn some luxurious perks if he leaves his post following the struggling company’s acquisition by Back of America.

Mozilo will reportedly receive up to $115 million in severance in cash and stock if he resigns or is fired. Mozilo’s future at the company he founded is in doubt after its sale.

On Friday, Bank of America confirmed it will buy Countrywide Financial for $4.1 billion. Bank of America Chief Executive Ken Lewis has said only that he would like Mozilo to stay at Countrywide until the acquisition closes. Then, “I would guess that he’ll want to go have some fun.”

Mozilo, the son of a Bronx butcher, would be able to have some fun in style thanks to some perks in his severance package. In addition to the huge payout, Mozilo can take free rides on the company jet and have his country-club bills paid for, according to a Friday report in the Los Angeles Times.

Full post as published by The Gavel on January 14, 2008 (boomark / email).