Mozilo to forgo $37 million of severance pay

Late news from the AP tonight: "Countrywide Financial CEO Angelo Mozilo, under fire over the size of his potential payout from the proposed sale of his troubled mortgage company, says he is forfeiting some $37.5 million in severance pay, fees and perks he was scheduled to receive upon his retirement."

More: "Mozilo, however, will still retain retirement benefits and deferred compensation that he has already earned, Countrywide said in a statement being released Monday."

Here's the Countrywide press release, in which Mozilo (pictured) says, "I believe this decision is the right thing to do as Countrywide works toward the successful completion of the merger with Bank of America."

The AP figures Mozilo still has roughly $44 million coming to him: "Now, he'll leave with a pension plan and supplemental executive retirement plan that totaled $23.8 million as of December 2006, according to the most recent proxy statement the company filed with the Securities and Exchange Commission.  Mozilo also accrued about $20.6 million in deferred compensation, according to the filing."

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo credit: Bloomberg News

Comments

[Jessica Cohen]

Hello

I really enjoyed this blog. On November 26, 2007, Countrywide stock was hammered on the NYSE, dropping over 10% to a level of $8.64/share; less than half the share's value in August when the firm faced bankruptcy rumors and a fraction of its value in 2006.

One proximate cause were reports that the Atlanta Federal Home Loan Bank had extended a large amount of its credit to Countrywide to offset its inability to raise funds in the private market. On January 11, 2008, Bank of America announced it had agreed to buy Countrywide for $4 billion in an all-stock transaction.

last i heard Merrill Lynch advised its clients to sell their stock in Countrywide. The stock has lost over 57% YTD as of September 7, 2007. I was talking to my friends at http://www.homeinspectionspecialist.com and they told me that Countrywide claims to be the top lender to minorities, but they agreed to a settlement with New York state attorney general Elliot Spitzer because of alleged overpayments by minorities.

Countrywide agreed to compensate minorities borrowers and improve minority lending oversight. Countrywide subprime documents show policy of lending to families with as little as $1000 of disposal income, often compromising their ability pay living expenses. Employees were given scripts to induce target customers into taking out loans. yeah so all that money he is getting is from hard working americans!!

Jessica

[the terminator]

there is no free market at all. in a free market nobody obtains anything if you ran a companies stock into a 90% reduction in value. but in george bushes free market not only can you do this but like the clown from another defunct mortage co you become the ambassdor to the netherlands. there is no reason to be honest, fair, reputable, or anything other than take what you can and who cares about the rest.which is why walking away from a home is honorable and legal and moral and to those who think not then all I can say is see ya suckers because my 401k is growiing fine why you all help pay my bills. just like bushco is already doing to you but your too dumb to know it.

[Dr. JwB]

This is just like what happened to me when I left my last job.

Only instead of having to give back 37.5 million bucks, it was a stapler.

Bastards.

[sid]

See. This guy's not so bad.

[yourkillingmelarry]

Back in 2003 he gave a speech to the Harvard Joint Center for Housing Studies and the National Housing Endowment calling for loosened credit ratings standards and a reduction, or perhaps an end, to downpayment requirements for homebuyers. He then unleashed the most irresponsible lending practices in the history of financial markets.

He pocketed $160 million in 2005 and $120 million in 2006, in stock option gains. A result of switching his trading plans right before the mortgage industry fell off a cliff calling into question the legality of such a move and lets not even probe ethics of such a move, there are none to probe. He became one of the wealthiest men in the country by being one of the main players of an unprecedented financial debacle that has brought the entire western global financial structure to the edge of collapse. People like Mozilo bring false riches that evaporate followed by many tears to the world. Why aren't we reading reports on the degree of his sentence??

[Uncle Billy]

How did he (they?) arrive at that particular amount?

[Sam]

wow! He forgoes $37M...wow that should put a dent in his networth...I feel so sorrrrrrrrrrrry for him.....NOT....
He always appeared as being a con man in interviews on cnbc...

[jaded]

funny how people see the light about doing "the right thing" only after there's an outcry against the original plan.

[Michael Snyder]

"How nice, how very, very nice!"

For those of you who aren't familiar with that punch line, ask any Southern Belle. As for Angelo's "trying to do the right thing", he's a bit in arrears.

[Bonnie Russell]

We at www.DisinviteMozilo.com believe this is a good start; but only a start.

The public is tired of CEOs at major companies who fail in a major way, being rewarded for failure; be they private or public entities.

The public expects Congress to put a stop to it; or the public will elect new Congressional members who will.

[Joop Kaashoek]

Compensation levels like that appear to be nothing less than legalized robbery, with wages for the average workers having been stagnant for years. True leaders should be concerned for all people in the company, these American CEO's worry most about themselves.

[Beth]

37 million would go real far in halping people catch up on mortgages

[GregSteinaker]

Out of any person in the industry, like he is the one that needs the money, the people in the industry always knew that everything that came out of your pie hole sas BS. You have as much as or more than any single persons responsibility for the credit crisis we are in.

[CD]

His lawyers told him to do it, they know N.Y state is trying to pin him down to send him to jail, so he is going for "the nice guy who returned some money defense". He will not be able to stay orange very long over there in Attica.
In the Valley ,Ventura boulevard is just one gigantic for lease sign, one after the other, businesses gone, empty spaces and Bush pretends we are not in a recession,maybe he can get Lawrence Yun's job at the NAR.

[Y.Knott]

This gentleman is responsible more than any other person for the credit mess that we are in. Enjoy you money. And you thought you were creating a legacy???

[GregSteinaker]

Adios!

[MaxersLA]

Hey Terminator--

"Your too dumb to know it". Speaking of dumb, the proper grammar would be "You're too dumb..." Learn the differences between your and you're...

If you think CEO excess pay is unique only to the Bush administration, then you are even dumber than you write... It's been going on for decades and has long been studied. The President is a figure head, I guess the Democratic controlled Congress has nothing to do with today's problems...

YOU"RE an idiot...

[MyLessThanPrimeBeef]

I dare Angelo to manage a Chinese toy factory.

[The DUDE]

You have to love these legalized Ponzi schemes.

Criminal predatory lending practices to dumb people who do not bother to read the fine print.

Really? You're really surprised that you cannot afford a $500k home on $45k/yr with a 420 FICO?

Mozilo probably got his start in grade school taking money from the special education students.

[Pat]

If someone would give me $80million, I would gladly walk away from $40million as a gesture of "doing the right thing".

[Capitalist]

Awww, poor baby has to let others play with 37 of his toys. Don't cry, Angelito - there's still millions more toys in the toy box.

Even Henry Ford - that paragon of socialism - understood that in order for the *company* (not just the CEO) to succeed, the employees need to be able to afford to buy the company's product. He also understood that a professionally successful company means a personally successful CEO.

Henry Ford was almost as greedy as Angelo Mozilo - but Ford understood that if he kept it reasonable, it would go on much longer and therefore net him much more in the long run. Mozilo's scheme lasted twenty years, Ford's has lasted generations. Which one garnered more for himself and his descendants?

P.S. For those who didn't get it, the "paragon of socialism" phrase was heavily sarcastic.

[firesale]

He's just trying to stay out of jail.

If he goes, what good is the several hundred
million he Ponzied his way.

[gregfromcali]

This is TOTAL posturing for Mozilo to portray himself as a "good guy" who cares about the people whose backs he's broken on his way up during the boom. Taking that into consideration... Angie Mozilo doesn't strike me as much of a philanthropist, and it is quite an accomplishment for anyone to walk away from 37 million bucks, ESPECIALLY a greedy person.

But he can't be too broken up about the whole thing - at least he can afford tissue to wipe his tears with the other 44 million bucks!

[Steve]

He should go to the big house and now playing the pitty game.
With so many CEOs cashing out while stock owners get screwed, ie HP and Home Dept, I have not or never will buy another share of stock, what a sham.

[JK]

Maxers, while you are calling Terminator an idiot for not knowing the difference between Your and You're, you misused the term It's. You were tyring to say It has which is Its, instead you used It's which is It is. Not poking fun, just showing that when you point fingers, 4 more are pointing back at you!

Mozillo should be in jail and the fact that he gets to walk away from this debacle makes my skin crawl. How long is this country going to allow the 1% to continually add to their riches off the backs of the lower 99?