Countrywide ignored advice on Mozilo pay

Someone once said of President Bush's autocratic management style: "When he wants your opinion, he'll tell you what it is."

Evidently Angelo Mozilo (pictured) and his friends at Countrywide Financial also attended the Tell Me What I Want To Hear School of Management. This is from the L.A. Times tonight: "Two consultants hired by Countrywide Financial Corp. raised concerns about Chairman Angelo R. Mozilo's lucrative pay package, but key recommendations were ignored and the company eventually hired a third advisor whose aim was to achieve 'maximum opportunity' for Mozilo, documents show."

More: "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."

It's funny how history changes over time. A couple of years ago, you might have read that the Enron scandal ushered in an era of corporate responsibility and accountability. The problem is, that didn't happen. We all thought it would, but it didn't. Corporate America just keeps on taking care of business. Compensation consultant came in with low numbers? Get another consultant! Same old, same old.

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

Comments

[Andrew]

Interesting, Peter. Over at the L.A. Times Travel & Deals blog, we posted back in mid-January on how:

"Bank of America recently sent a large group of analysts to the Four Seasons Westlake Village to sort out the details before its proposed acquisition of Countrywide Financial Corp., the country’s largest mortgage provider."

When we checked, nightly rates at the Four Seasons were running $225-425, pre-tax.

Here's the full post, by Jen Leo:
Four Seasons Westlake Village & art of Countrywide deal
http://travel.latimes.com/daily-deal-blog/?p=1218

– Andrew, Sr. Producer
http://travel.latimes.com

[Uncle Billy]

Good article, but it wants to put a more human face on this man. Are we ready for that yet? Stocks, pillories, and prangers are surely more fitting than $30M haircuts. Making off with the cash while knowing that his company is about to fall off the cliff -- crushing employees, shareholders, customers, and investors -- doesn't point to caring much about "the dream of homeownership."

More likely, he just knew how to use the dream, not actually believe it. You grow up in a butcher shop, you tend to develop a very carnivorous view of life.

[Gary]

No Guilt on my end..........If and when I decide to give my home back to the bank I will feel no guilt at all. Like to ca politicians that cannot figure out how to cut 10% off the budget, I will feel no emotion to handing the keys back. Hell, whu not..if the banks and politicians want to maximize their financial position, then so can I. My 401k is doing fine and I keep my investments very conservative and the extra money I will invest most and with the rest just buy a new car.

[Michael Snyder]

Sort of like the way he had his mortgage brokers shop for appraisals to "get the value" they wanted in the property.
I for one am delighted to see the turmoil this credit debacle has caused in the bond markets. Now that the actions of folks like Mozilo are reaching into the government's pocket we'll start to see some action. If we end up with either Clinton or McCain next year these thieves will get a free pass. If we're fortunate &/or wise enough to choose a leader who's not already on the Murdoch/Goldman Sachs payroll heads will roll. Any bets?

[Rob]

"Umm, yes Mr. Senator. You are a day late, and unlike you, I am not a dollar short..."

http://tinyurl.com/2hjml6

[MyLessThanPrimeBeef]

That third compensation consultant, judging from his modus operandi, I think I know him... he also moonlights as Countrywide's top-producing real estate appraiser.

[formerlahomeowner]

Did Mozillo do something illegal? If so, throw him in jail. I don't think he did anything illegal. We still live in a capitalist society. If you don't like what his company is doing, don't buy the stock. And I don't want to hear anything about "people need to do what is right" and all the morality arguments. It's just business. So people should not feel any guilt if they walk away from a mortgage. It's just business. Government should either regulate executive pay or stay away from this issue.

[jtbwriter]

As a former employee of Angelo Mozilo, I am ashamed of the shark he has become. His intentions may have been legit at one time, but his methodology and control tactics have totally ruined what was once a company I enjoyed working for. When managers are allowed to threaten and browbeat an employee in front of 30 other people and use spy tactics and blackmail to keep employees in line, that is the hallmark of a failed company.

[areles]

FLAH, in the UK and Australia, shareholders vote on executive compensation. The government doesn't need to regulate it; the owners of the companies (shareholders) do.

The practice of CEOs running their companies into the ground, forcing their shareholders to eat massive losses, while continuing to pay themselves a fortune is, at the very least, unethical as hell. What on earth is okay about shareholders eating billions in writedowns while top executives shield themselves from any personal loss at all? It's absolutely abhorrent, and it's about one click shy of Enronian.

And on top of it, they want an f'ing BAILOUT? Are you kidding? The audacity of these jackals defies comprehension.

[Andrew Z]

I feel sick that my mortgage is with Countrywide.

[Tim Hebb]

Angelo is indisputably the tanned and rested poster boy of corporate un-accountability.

[Carolyn Sherley]

Oh my Gosh! Is this Countrywide CEO serious. I'm merely a homemaker, but predicted this would happen almost two years ago. He surely cannot be serious!!!! They banked on greed and they lost...............somewhat like buying stocks on margin (look at the 1932 Depression). Let's face it. The greedy bankers and CEO's thought they would make a killing but it backfired. Oh, well, they said. The government will bail us out. Well, guess what! It's sad that some people will lose their homes, but I'll be darned if I am going to bail out these multi-million dollar idiots with my tax money. Let them fork up their own assets if they want to "save " their jobs and their companies. No one will ever bail me out if I over extend myself on a credit card.

[Sweetie Pie]

My spouse is also an ex-employee of Sir Angelo's. The behavior of which jtbwriter is speaking is on the money. It was all about profit, a la Gordon Gekko, "Amaze me." It didn't matter how the profit was made as long as it mounted. Illegal? Perhaps not. Angelo's fight against government regulation worked when the markets were hot. Now that they're not, that same government is expected to bail Sir Angelo's debacle of a bank. Was the sell-off of his stock at the top-notch price illegal? Perhaps not. Coincidence? Definitely not.

[the_piano_man]

It is interesting to discover that it is very difficult to find a major "online" newspaper that allows comments on the "overpaid mortgage executives" issue. I say throw them all in the slammer. They ARE responsible for the decisions they and their subordinates make, period. That is why they got paid the big money. The wealth in this country is way out of line mainly because of swindlers, liars, and cheaters and those who use other people in destructive ways. The government has been looking the other way far too long. Take all these jerks money and distribute it to the people they have cheated, and put these so-called executives in jail where they belong.