The Wall Street Journal-20080128-Countrywide CEO Forfeits --36-37-5 Million as He Exits

Return to: The_Wall_Street_Journal-20080128

Countrywide CEO Forfeits $37.5 Million as He Exits

Full Text (446  words)

Angelo Mozilo, chairman and chief executive officer of Countrywide Financial Corp., is giving up $37.5 million of severance pay, fees and benefits in the face of pressure from politicians who have berated him for continuing to collect large sums from the mortgage lender even as millions of Americans face the threat of foreclosure.

In a statement released late last night, Countrywide said the 69- year-old Mr. Mozilo will forfeit severance pay, fees and perks that he was to have received upon his retirement, according to the Associated Press. Mr. Mozilo is expected to step down when Bank of America Corp. completes its planned $4 billion acquisition of the Calabasas, Calif., mortgage lender. The sale is due to be completed in the third quarter, though some investors say it may fall through if Countrywide's business continues to deteriorate.

Giving up severance pay won't entirely shield Mr. Mozilo, who has become the public face of the mortgage crisis as the CEO of the nation's largest lender and a frequent guest on CNBC. Sen. Hillary Clinton of New York recently called his pay package "outrageous," and Sen. Charles Schumer, New York's other senator, urged Mr. Mozilo to donate part of his pay to services that counsel distressed mortgage borrowers.

But Mr. Mozilo's decision should make him somewhat less exposed to flak in Washington. He is due to testify there Feb. 7 at a hearing called by Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, who is seeking information about the pay packages of top financial executives whose companies have been battered by losses on home mortgages.

Mr. Mozilo also will give up $400,000 per year he was to be paid to serve as a consultant to the company after his retirement and benefits including use of a private airplane, the company said.

"I believe this decision is the right thing to do as Countrywide works toward the successful completion of the merger with Bank of America," Mr. Mozilo said in a prepared statement.

The executive, who co-founded the company in 1969, won't give up retirement benefits and deferred compensation that he has already earned, Countrywide said. He retains a pension plan and supplemental retirement plan whose present value totaled about $24 million as of December 2006, according to the company's 2007 proxy filing. From 2004 through 2007, Mr. Mozilo sold about $414 million of Countrywide shares obtained through the exercise of stock options, according to securities filings.

Countrywide, which reported a loss of $1.2 billion for the third quarter, is scheduled to report fourth-quarter results tomorrow. The company last week canceled plans to hold its usual conference call with analysts after the release of results.