Countrywide execs due millions in stock
A senator calls the payments to Angelo Mozilo and David Sambol 'perverse.'
The top two executives of beleaguered Countrywide Financial Corp. will pocket $19 million in stock next week, according to a regulatory filing. It's the start of a series of multimillion-dollar payments expected to go to the pair before and after the company's pending takeover by Bank of America Corp.
The largesse for Countrywide Chief Executive Angelo Mozilo and President David Sambol drew immediate fire from Sen. Charles E. Schumer (D-N.Y.), a member of the Senate Finance Committee, whose members have been debating the merits of a government bailout of consumers and mortgage lenders caught in the sub-prime meltdown.
"It's perverse for Bank of America to reward the principal architects of the bad business practices that caused this housing crisis," Schumer said in a statement. "Bank of America will hopefully correct the bad practices Countrywide put in place. But enriching people who specialized in deceiving borrowers for the sake of their bottom line will not help that cause."
The payments of stock valued at $10 million for Mozilo and $9 million for Sambol were disclosed in a regulatory filing late Thursday by Bank of America. The payments, described as "performance-based" stock rights and grants, are required by agreements the executives struck with Countrywide less than a year before the sub-prime meltdown forced the distressed Calabasas lender to sell itself, according to the filing.
A series of additional payments will be triggered by the takeover, the filing says.
Mozilo, who is expected to retire when the deal takes effect, previously agreed to give up $36.4 million in cash severance benefits. But he will receive after his departure company-paid life and health benefits worth $21,084 and medical benefits worth an estimated $85,000.
The takeover also will lift restrictions on 229,762 shares of stock already granted to Mozilo. At Friday's closing price, the shares were worth $1.3 million.
The $10 million Mozilo is to get next week is technically not a result of the merger. But because it's restricted Countrywide stock that will be converted into unrestricted Bank of America shares when the merger goes through, the deal means the 69-year-old CEO will be able to walk away with $11.4 million, in addition to a pension valued at $23.7 million and deferred compensation valued about a year ago at $20.6 million.
Bank of America also disclosed in the filing that it would pay Sambol $28 million to stay with the company after the combination.
