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I've been banging the drum on Angelo Mozilo's heinously bad stewardship and overcompensation for awhile now but sorry folks: I gotta get at least one more post out of this travesty.Mozilo, who is CEO of troubled lender Countrywide Financial (NYSE: CFC), is eligible to receive stock awards valued at $10 million this April. The awards consist of performance-based restricted stock units and stock-appreciation right and will vest upon the consummation of Bank of America (NYSE: BAC)'s acquisition of the company.
The fact that Mozilo sold hundreds of millions of dollars worth of stock at prices 5 times the current price raises questions about whether he really need to be compensated further.
But that's not the worst of it. Chief Operating Officer David Sambol could receive a $1.9 million retention bonus upon completion of the merger.
The purpose of a retention payment is to keep an executive from jumping ship to another more lucrative opportunity. But I've got to ask: Given that Countrywide is the poster child for idiotic lending, bad management, and poor corporate governance, is Mr. Sambol really that in demand that a $1.9 million retention payment is necessary. Or is this just more of the "loot the company while you still can!" stuff that has come to characterize the descent of Countrywide?
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Reader Comments (Page 1 of 1)
2-14-2008 @ 11:45AM
Jeff said...
Why does this come as any surprise. In America we once rewarded individuals for stellar performance, then for mediocrity, and now we reward for absolute failure.
This comes as no surprise ask yourself these questions:
-- Why do you pay up to $4.00 to withdrawl your
own money from a foreign ATM?
-- Why are they coonsidering giving illegal
immigrants a universal drivers license, but a tax
paying citizen needs 6 forms of identification?
-- Are police officers anything more than roving
tax collectors (speeding tickets)?
-- Has there ever been a worse time in this
nations history than right now? Please ommit
the great deppression.
-- Would State Governments tax the air we
breathe if they could?
2-14-2008 @ 1:06PM
Chris said...
Should we omit the Carter administration, too? How about the civil war, reconstruction, and LBJ?
People like to talk about how bad things are, but that is just because they see that other people have it better. Although I agree that this type of executive compensation is silly, if you don't like it, just don't invest in companies with such policies. Most ranting and raving of excessive compensation just smacks of jealousy to me.
2-15-2008 @ 11:04AM
shirley Burke said...
How can they give him a raise when their are people that aren't paying their mortages and just leaving their homes. Also they can't even treat their customers right that pay their mortages on time. I had to call and threaten them to refinance with another bank because that raised my payments over $50. a month because my house insurance went up $20.00 and my taxes went up 44.00 for the year. they did resend it down to only $10.00 a yeart after talking to them for an hour. If I were you I would check your payments.
3-06-2008 @ 5:45AM
Anony-mouse said...
Bank of America is already on site evaluating the financial system.
The situation for some IT employees at Countrywide is bad. Annual Reviews were adjusted by senior management to lower many peoples scores. Reason? The bonus is based on the Annual Review. Well, that means, the lower the average scores, the lower the bonus, making it a savings to the company.
They have a term called “Day One” which is July 1st. That is the day they plan to lay off many jobs in the IT sections of Countrywide. It seems as if the deal is going through. Bank of American management is working with Countrywide management on the layoffs.
How is that even allowed.