Countrywide Financial Chief Executive Officer Angelo Mozilo seems to have finally obtained some public relations advice–he’s announcing that he’ll voluntarily give up $37.5 million in severance and consulting pay in connection with Bank of America’s takeover of his failed firm. He made this announcement the day before Countrywide reported $422 million in losses in the fourth quarter. The coincidence in timing was pretty spectacular.
Mozilo’s noble gesture is intended to make us think that he’s listening to the critics in Congress, among shareholders and among the hundreds of thousands of Americans who are at risk of losing their homes after taking Countrywide mortgages. Shareholders are cranky because their shares have lost 86 percent of their value over the past year.
But lo and behold, Mozilo will not be a poor man. He has sold $450 million in stock options, from August 2004 to August 2007–before the stock started tanking in earnest. And under the deal he is cutting, he will receive $36.4 million in severance pay and $400,000 a year in consulting fees, plus the use of a private airplane.
This is still an outrage. His defenders make the argument that Mozilo spent 40 years building Countrywide and that he helped many people buy homes and made lots of money for some shareholders. But it appears now that he is now getting away with a massive transfer of wealth from shareholders and bankrupted home owners to himself.
What do you think should be done?
