Countrywide Financial's (CFC) embattled CEO Angelo Mozilo has forfeited $37.5 million in severance payments and other rights in the face of blistering criticism from Capitol Hill about executive compensation amid the mortgage meltdown and credit crisis.
In connection with Countrywide's pending sale to Bank of America (BAC - Get Report), which was announced earlier this month, Mozilo is "voluntarily relinquishing" his rights to approximately $37.5 million in cash severance along with the use of certain "perquisites" such as use of a company airplane, according to a company statement issued early Monday morning.
Mozilo would be entitled to $36.4 million in cash severance pay and $400,000 a year in consulting fees, as well as the use of a private airplane, among other things, the statement said.
Excluding certain deferred compensation and retirement benefits already earned, Mozilo will not receive any cash payments at the time of the acquisition -- expected to close later this year -- nor if his employment is terminated, the company said."My primary focus today -- as it has been for the past 40 years -- is to do what is in the best interests of Coutnrywide's employees, customers and shareholders," Mozilo said in the statement. "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 combination of seized-up secondary markets for mortgage-backed securities as well as rising borrower defaults in all types of loans morphed what was once considered a contained problem in subprime mortgages into a full-blown mortgage industry crisis. As the nation's largest independent lender, Countrywide has been at the center of that firestorm. In recent months, Mozilo has been criticized over his compensation as the mortgage meltdown intensified, which some published reports -- erroneously, Countrywide said -- have estimated as high as $115 million. Earlier this month, Mozilo along with several other executives including former Citigroup (C - Get Report) chief Charles Prince and Merrill Lynch's (MER) ex-CEO Stanley O'Neal were told to appear next week before the House Oversight and Government Reform Committee for a hearing to look into compensation and severance packages. Still, Mozilo remains a large shareholder of Countrywide. According to Yahoo! Finance, Mozilo owns nearly 500,000 shares as well as options on Countrywide. The lender is expected to report fourth-quarter results on Tuesday. Shares recently were falling 14 cents, or 2.3%, to $5.88.