Pity the hapless ex-CEO who has to explain to the U.S. Congress how he got millions for failing at his job. It's like the person in the horror movie who doesn't realize that a bad guy is lurking in the dark woods even though that's clearly indicated by the scary music. In this case, the knife-wielding psycho Jason Voorhees is being played by Rep. Henry "I haven't met a microphone I didn't like" Waxman (D-CA).
What did former Countywide Financial Corp. (NYSE: CFC) Chief Executive Angelo Mozilo, former Citigroup Inc. (NYSE: C) CEO Charles Prince and former Merrill Lynch & Co. (NYSE: MER) head Stan O'Neal expect to happen? That they would finally be able to tell their "side" of the story? That they would be able to counteract media perceptions that they are a bunch of greedy pigs who were rewarded for their incompetence? Apparently, these once mighty kings of the boardroom were that deluded.
Mozilo was the most outrageous, telling the House Committee on Oversight and Government Reform that, "In short, as our company did well, I did well." The Wall Street Journal (subscription required) noted that Waxman, who locked horns recently with baseball great Roger Clemens, wasn't buying it.
"That response didn't sit well with Chairman Henry Waxman (D., Calif.), who pressed Mr. Mozilo on his decision to sell almost six million shares of the company's stock from November 2006 to December 2007," the paper said. "Countrywide was engaged in a $2.5 billion share buyback at the same time."
In his testimony, Prince unbelievably said that when confronted with Citigroup's disastrous performance in the subprime mortgage market that "In the interests of the company I had worked so hard to build, I immediately submitted my resignation." Yeah, all that talk about Prince being forced out was a figment of the media's imagination.
O'Neal whined that he didn't receive any severance when he left Merrill because he didn't deserve it. The $161 million retirement package was "deferred compensation." Oh please!. Even though it wasn't an official severance package, he got the money when he "severed" his ties with the Wall Street bank.
Rep. Tom Davis of Virginia, the committee's ranking Republican, rightly described the hearing as a "sanctimonious search for scapegoats." But it couldn't have happened to a more deserving group, no?
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Reader Comments (Page 1 of 1)
3-08-2008 @ 1:30PM
alan said...
This is why the Republicans will be swept out of both houses of Congress further then they are already in the next election. Why the hell are the Republicans defending the three stooges. Because the Democrats are pounding them ? Very dumb on the part of the Republicans. I'm sure the majority of American families are standing up and applauding the Republicans for defending their "heroes" .
If ever there were poster children for corporate greed and incompetence, it's these three. They deserve to be grilled, slowly.
The middle management of these companies had their variable compensation cut drastically because of the exact same performance issues that the top dogs are somehow immune to.
Sorry, but from any standpoint of logic it just doesn't wash. Remember, the fish always begins to stink from the head first !!!
3-08-2008 @ 6:07PM
Bob said...
As a registered voting Republican, I have to agree wholeheartedly with Alan's remarks. I watched part of the hearings on TV, and was highly impressed with two things: The Democrat representatives polite but insistent questions regarding the corporate financial drain these ex CEO's misappropriated from their corporations. The CEO's frequently stated the awards were approved by the stock holders, but as everyone, apparently except the Repulican member know, the large stock holders are in bed with management.
As for the Republican members, the "soft ball" questions they asked made me nearly gag. You would thing the GOP reps were interviewing for a now job, rather that upholding the responsibility of their "high" offiec.
3-09-2008 @ 2:42PM
Americas Watchdog said...
We have the National Mortgage Complaint Center and we too were astounded at Congress playing to the news media on executive pay.
Do we think what Countrywides CEO did was wrong? YES!!!. Can we understand why Republicans would defend any of this? No. I used to be a Republican and watching the Good OL Pals (GOP) of less than wonderful business makes me want to throw up. And yes they will get their ass handed to them in November because of this.
But if Congress wants a much bigger headline grabber than executive pay...........How about going after the "yield spread premium" kick back that banks or mortgage bankers get for increasing your mortgage interest rate? We figure there are 40 million homeowner victims & Congress has done nothing over this disclosure issue (banks do not have to disclose it to consumers).
The Reason Why: Congress & Republicans get paid off to look the other way. MCcain will not even say anything about it. We are in very deep trouble as a country. The real estate disaster is on its way to depression, not recession, & Congress wants to have photo opps making it look like they actually understand our current mess?
Pretty sad stuff!
3-09-2008 @ 11:27PM
sue said...
I was middle management at ML. I received no raise for 2008 and my bonus had not been raised for 2 years even though in 2006, we made money as a firm. It's outrageous what Stan did to ML. Then we pay for an office for 2 years for him - why?? Compare his compensation to some of the past CEOs. You'll see the big difference. I left because the entire firm will suffer now & I refused to work 60 hour weeks for less than $80,000 a year.
3-10-2008 @ 1:06PM
crystalball2114 said...
Waxman is a Communist moron. If I was in front of his committee, I'd give it right back to him too. The man is a wimp who now has a bully pulpit to abuse.