Mozilo could reap $115 million
Countrywide Financial Corp. founder Angelo Mozilo, one of the nation's highest-paid chief executives, stands to reap $115 million in severance-related pay if his troubled company is acquired by Bank of America Corp., regulatory filings show.
Free rides on the company jet are also included in Mozilo's departure deal, and the company will pick up his country club bills until 2011.
Other executives, including Home Depot Inc.'s jettisoned CEO, Robert Nardelli, have garnered bigger going-away packages. But critics say Mozilo's arrangement is especially nettlesome given the losses that Countrywide investors have suffered in the last year. Company shares rallied Thursday to $7.75, up $2.63, but that's still down 82% from their high last year.
"This is a failed chief executive -- a failed and overpaid chief executive -- who has driven his company to the brink of bankruptcy," said Daniel Pedrotty, director of the office of investment at the AFL-CIO. "I think shareholders are going to be especially outraged if he walks away with another pay-for-failure package."
Neither Mozilo nor Countrywide officials returned calls for comment.
Bank of America is in talks to acquire Countrywide and a deal could be announced as early as today, according to people with knowledge of the talks.
If Countrywide is acquired, Mozilo could potentially stay on with the company. But he could probably make more money by leaving, compensation experts say.
For one thing, Bank of America is unlikely to pay Mozilo more than its own chief executive, Kenneth Lewis.
Lewis, whose company has a market capitalization of $174 billion, earned $27.9 million in 2007, according to regulatory filings. Mozilo earned $48.1 million last year, and Countrywide's market capitalization is $4.5 billion.
If Mozilo is fired or resigns voluntarily, his employment contract guarantees him three times his base salary, plus a cash payment equal to three times the amount of whichever is greater: his average bonus over the last two years or his bonus from the previous year.
That combined total would be $87.9 million, according to Countrywide's most recent proxy statement.
In addition, Mozilo has two pensions that his severance pact gives him the right to receive as a lump sum upon his departure. Those pensions were worth $24 million as of December 2006, the last time the company was required to report their value.
