284 Million Reasons To Smile

There's nothing sub-prime about Angelo Mozilo's compensation for running Countrywide Financial in Calabasas. The Times' Kathy Kristof reports he took home $120 million last year, and $284 million over the past two years.

So far, Countrywide has survived the subprime meltdown, though it is building up a pretty big pile of foreclosed houses that it will need to sell. This Countrywide Foreclosure Blog calculates that the company now owns 7,610 houses it has foreclosed on.

But Jeez, $284 million? I'm not sure what to say. Go, Angelo, Go? You Da Man?

You tell me.

Comments

[Howard]

Pete,
Looking at CA:
CA 1222 480,785,000

Where do you figure this is going to go to?

[Anonymous]

How about "You Da Crook"?

Perhaps people are jaded by big CEO salaries, but the shareholders of Countrywide should be up in arms, especially as they head into a tough market caused by the subprime meltdown. They'll need every buck they can squeeze to get through in one piece. $284 million would be a nice cushion.

But I also wonder about the employees of Countrywide. Couldn't this money provide salary increases for the rank and file who do the actual work? I respect CEOs but 99% of the work of a company is handled at the bottom, in this case, by the sales people, their managers, accountants, loan officers, even the receptionists. If there's $284 million floating around for the CEO to take for himself, surely that money would be better spent rewarding and incentivizing the people who did the work that generated that free cash flow.

My final point is that I doubt this guy started Countrywide. If he did, then he should get some significant compensation for his risk in starting the company and creating jobs. Maybe $50 million during his tenure. But if, like most CEOs, he's simply a mandarin who networked his way to the top, then he should only be paid a multiple of his company's lowest paid employees.

[Peter Viles]

Howard -- In hopes in interpreting your comment for other readers, I think you're saying that Countrywide now owns 1,222 foreclosed houses in California with a combined "value" of $480 million, and you're asking where this number is going to go. If I've got the question right, I expect the number of houses to go higher -- there's no indication the foreclosure mess is ending or has peaked. As for what Countrywide is going to do with the houses, I don't have the slightest idea. The obvious answer would be to put them on the market and sell them, although a lot of the homes are probably located in places where it's hard to sell houses right now. I hope I corrently interpreted your question.
Pete

[Howard]

Pete- Yes you interpreted and answered my question perfectly, and sorry for not being clear. I was more or less interested if there was any "indication" (as you put it) that foreclosures have peaked. This certainly is something to keep an eye on over the next 6 months (or more?). Thanks, and keep up the great work!