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BEWARE OF CORPORATE “HEROES”
Oh, Angelo, what a hero you are. Yessiree, a real corporate hero.
Angelo Mozilo is CEO of Countrywide Financial Corporation, which was America’s largest huckster of subprime mortgages before that whole house of cards came tumbling down. Thousands of Countrywide’s customers have lost their homes, thousands of its employees have lost their jobs, and Countrywide itself was on the brink of bankruptcy until it arranged a bailout merger with Bank of America.
One who was not suffering a bit, though, was Angelo. He had set himself up with a nice little severance package of $36 million, plus $400,000 a year in consulting fees from the new owners and use of the corporate jet. However, after an explosion of public outrage over this sweetheart set-up, Angelo has magnanimously stepped forth to say that he will voluntarily forego his golden package. What a guy, huh?
But wait – before you burst into tears of gratitude over his generosity, let’s note that Saint Angelo had taken even earlier steps to provide a financial cushion for himself. As 2007 dawned – a year that would be catastrophic for Countrywide – Mozilo quietly adjusted an executive stock-selling plan so he could unload millions of shares of the company’s stock that he held.
When he first “adjusted” the plan, Countrywide’s stock price was about $40 a share. Today, it’s $6. In between, his sales netted him a cool $132 million. That does not count more than $300 million-worth of the stock he had previously sold. So, when Angelo made the grand gesture of giving up the severance package that he didn’t deserve in the first place, he knew he was already sitting in the lap of luxury – unlike the regular shareholders, customers, and employees who didn’t have any advance knowledge of Countrywide’s collapse.
“Countrywide Chief Foregoes $37.5 Million In Exit Pay,” The New York Times, January 29, 2008
“Countrywide CEO forfeits $37.5 million,” money.cnn.com, January 28, 2007
“Countrywide CEO Angelo Mozilo Announces Decision to Voluntarily Relinquish Rights to Approximately $37.5 Million in Cash Severance Payments, Consulting Fees and Perquisites,” biz.yahoo.com, January 28, 2008
“Countrywide Chief Is Said to Face S.E.C. Inquiry,” www.nytimes.com, October 18, 2007