In Sale to Bank of America, Countrywide Executives to Get $19 Million in Stock
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Sunday, March 30, 2008
Countrywide Financial's chief executive and president will receive a combined $19 million in stock next week as part of the company's pending takeover by Bank of America, according to a regulatory filing.
The payments of stock valued at $10 million for chief executive Angelo R. Mozilo and $9 million for President David Sambol were disclosed in a regulatory filing late Thursday by Bank of America.
The payments, described as "performance-based" stock rights and grants, are required by agreements the executives struck with Countrywide less than a year before the subprime meltdown forced the mortgage lender to sell itself, according to the filing.
Some lawmakers were incensed by the payouts.
"It's perverse for Bank of America to reward the principal architects of the bad business practices that caused this housing crisis," Sen. Charles E. Schumer (D-N.Y.) said in a statement.
Mozilo, who is expected to retire after the takeover, previously agreed to give up $36.4 million in cash severance benefits. But after his departure, he will receive company-paid life and health benefits worth $21,084 and medical benefits worth an estimated $85,000.
Bank of America also disclosed in the filing that it would pay Sambol $28 million to stay with the company. The bank wants Sambol to lead its consumer mortgage business when the deal is complete.
Bank of America is in the process of acquiring Calabasas, Calif-based Countrywide for about $4 billion in stock. Bank of America agreed to the acquisition in January, and the transaction is expected to close in the third quarter.
