The Wall Street Journal-20080118-Countrywide Approves Bonuses for 4 Officials
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Countrywide Approves Bonuses for 4 Officials
Countrywide Financial Corp.'s board approved cash retention bonuses and stock awards for four top executives of the company as it prepares to be acquired by Bank of America Corp.
Under the merger agreement, released in a regulatory filing yesterday by Countrywide, the lender may have to pay a breakup fee of $160 million to Bank of America if Countrywide walks away from the planned $4 billion purchase, announced last week.
The agreement calls for Bank of America to swap 0.1822 of a share in that company for each Countrywide share. Based on Bank of America's closing price of $36.91 yesterday, the offer values Countrywide at about $6.73 a share. Countrywide shares closed down 46 cents at $5.48 in 4 p.m. composite trading on the New York Stock Exchange.
The $1.25 gap between the current value of the offer and Countrywide's price partly reflects uncertainty over whether the acquisition will go through. Bank of America could cancel the planned purchase if, for example, Countrywide has misstated its earnings or violated accounting rules.
The retention payments and grants will go to Eric Sieracki, chief financial officer, who will get $1.5 million and 148,945 restricted stock units; David Sambol, chief operating officer, $1.9 million and 335,126 restricted stock units; Ranjit Kripalani, head of capital markets, $2.5 million and 111,709 restricted stock units; and Carlos Garcia, director of risk management, $1.5 million and 148,945 restricted stock units.
Countrywide's announcement listed no such awards for Angelo Mozilo, the company's chairman and chief executive.
