Board nixed lower pay for Mozilo

The result was a pay contract that "was significantly more generous to Mr. Mozilo" than originally recommended, according to a report released by a congressional panel Thursday.

The report was prepared in advance of today's hearing of the House Committee on Oversight and Government Reform, where Mozillo and former chieftains of Merrill Lynch & Co. and Citigroup Inc. will be asked to explain how they managed to enrich themselves while their companies struggled in the wake of the mortgage meltdown.

"We're trying to understand why these three gentlemen should collectively walk away with hundreds of millions of dollars while their companies are losing billions," said Rep. Henry A. Waxman (D-Beverly Hills) in an interview. "It's hard to know why we're rewarding failure."

Mozilo made $48.1 million in salary, bonuses and stock-based pay in 2006, the most recent year available. As the mortgage industry swooned in late 2006 and 2007, he cashed out stock options valued at about $140 million.

Countrywide's shareholders, meanwhile, have lost nearly $23 billion in equity since February 2007, when the Calabasas-based company's share price hit a $45.02 peak. On Thursday, the shares fell 50 cents to $5.20.

Mozilo declined to comment Thursday, although he has defended his compensation in the past as his rightful reward. The congressional report, however, said Countrywide's board spurned recommendations to scale back the chairman's pay.

In 2004, the committee report said, consultant Pearl Meyer "raised concerns about the compensation package Mr. Mozilo would receive after his planned retirement" as chief executive -- a package valued at $81 million in Countrywide's 2007 proxy statement.

Countrywide's board accepted some of the recommendations but rejected others, the report said, and then "ended its relationship with the consultant."

The next consultant, Exequity, recommended "significant reductions" for Mozilo's pay in 2006. The board instead retained the compensation firm of Towers Perrin, which was represented by consultant John England.