No Severance Cash, No Plane, but Respect?

The most tragic flaw in the character of Angelo Mozilo, the chief executive of Countrywide Financial, may be his apparent inability to see how he has become the unsympathetic face of the subprime crisis. "Perhaps the most hated business executive in America," says Douglas McIntyre on bloggingstocks.com.

The announcement that Mozilo plans to relinquish some $37.5 million in severance as part of Bank of America's $4 billion acquisition of Countrywide shows that some recognition, and a scramble at damage control, has finally begun. Yet it is difficult to believe that it will be enough to shift the spotlight, whether public opinion or regulatory inquiries, away from him.

It's no mystery why Mozilo has become a convenient target for politicians and pundits. The perpetual tan, the gleaming white teeth, and the sharp suit haven't helped. Neither has his relentless optimism about the housing market, about Countrywide -- even about the collapse of the subprime market. But mostly it is about the money. His more than $400 million in estimated gains from pay and stock sales in the last few years dwarfs the compensation of any other C.E.O. of a company that has been in the heart of the subprime storm, from home builders to Wall Street. Giving up $37.5 million doesn't sound quite as magnanimous in comparison.

According to some estimates, Mozilo had stood to receive more than $70 million in his severance package. Others had put that figure as high as $115 million. But in Countrywide's statement this morning, the company said Mozilo "would be entitled to $36.4 million in cash severance pay and $400,000 per year in consulting fees, as well as private airplane use and other perquisites."

"These are the amounts and benefits he will be forfeiting," the company said.

Mozilo said in the statement: "My primary focus today -- as it has been for the past 40 years -- is to do what is in the best interests of Countrywide's employees, customers, and shareholders."

(Mozilo, of course, is still a large shareholder in Countrywide, the biggest mortgage lender in the country, which he cofounded in 1969.)

The announcement comes as the House Oversight Committee prepares for a hearing into the compensation and severance packages of C.E.O.'s involved in the mortgage crisis. Mozilo, Charles Prince (former C.E.O. of Citigroup, left with $41 million), and Stan O'Neal (ex-chief of Merrill Lynch, $161 million) have been asked to testify.

In the letter to Mozilo, the committee says: "You should plan to address how it aligns with the interests of Countrywide's shareholders and whether this level of compensation is justified in light of your company's recent performance and its role in the national mortgage crisis."

The hearing had been planned for February 7, but now appears to have been rescheduled to February 28, according to the committee's web site.

Should be quite a show.

Jeffrey Cane