Congress Shines Spotlight on Exec Comp

Furthermore, the report raised other issues with the renegotiated contract. For instance, the "change in control" provisions entitled Mozilo to a severance payment of $36 million in cash on top of benefits. The terms gave Mozilo the right to collect the payment if the board took an action that "results in the diminution of executive's status, title, position and responsibilities" or that "results in the executive not being able to travel by private aircraft at company expense." The board could get rid of Mozilo without paying him severance only if he were convicted of a felony or acted in "bad faith."

The new contract gave Mozilo $10 million in restricted stock units to compensate him for payments he would have received under his retirement plan if he had retired at the end of 2006.

"It is unusual to include compensation for not retiring in the pay package of an actively employed CEO," said the report.

It also entitled him to a cash bonus calculated as a percentage of the company's annual net income provided that Countrywide's return on equity exceeded 10%. At the time the contract was negotiated, Countrywide was regularly logging a return on equity more than doubled that rate, so it effectively handed him a bonus even if he performed badly.

"I can't believe how low the ROE measures are," said a Countrywide official in an internal email, according to the report. "[S]hareholders or newspapers might comment all over this evident fact."

On Jan. 11, Bank of America(BAC Quote) announced plans to acquire Countrywide. On Jan. 28, after the committee called Mozilo as a witness to the hearing to be held Friday morning, the CEO forfeited severance and benefits totaling $37.5 million.