Mozilo's control of board threatens Countrywide Financial

A piece (subscription required) in this weekend's Wall Street Journal looks at how outsized pay packages and cozy relationships with CEO Angelo Mozilo may be harming the board's independence, and Countrywide Financial (NYSE: CFC) shareholders.

The company's directors are handsomely compensated for their work, and three have sold more than 2 million dollars worth of stock since mid-2006, even as the shares have plunged in value.

The issue isn't the dollar value of the pay packages which, while excessive, hardly reach the point of materiality for a company with an $8.3 billion market cap. But it may well be that their compensation and Mozilo's compensation has led to a symbiotic relationship where neither asks critical questions.

That appears to be the case. Mozilo doesn't appear to be on the brink of losing his job, although pretty much everyone who isn't on the Countrywide Financial board thinks he should be. Most 5 year olds could tell you that Mozilo, whose stock sales are being investigated by the SEC, should be fired?

Why hasn't it happened? Mr. Mozilo's relationship with the board may be the answer.