More millions for Mozillo?

Now that Bank of America is stepping in to buy ailing mortgage lender Countrywide Financial, many are wondering about the fate of the company's founder Angelo Mozilo.

While initial reports on the deal have The Orange One staying on at least until the ink is dry on all the paperwork for the deal, some are already starting to inspect the paperwork on his severance package, notably, Kathy M. Kristof in this LA Times story.

Countrywide Financial Corp. founder Angelo Mozilo, one of the nation's highest-paid chief executives, stands to reap $115 million in severance-related pay if his troubled company is acquired by Bank of America Corp., regulatory filings show.

Free rides on the company jet are also included in Mozilo's departure deal, and the company will pick up his country club bills until 2011.

Graphic courtesy of the New York Times

Other executives, including Home Depot Inc.'s jettisoned CEO, Robert Nardelli, have garnered bigger going-away packages. But critics say Mozilo's arrangement is especially nettlesome given the losses that Countrywide investors have suffered in the last year. Company shares rallied Thursday to $7.75, up $2.63, but that's still down 82% from their high last year.
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If Mozilo is fired or resigns voluntarily, his employment contract guarantees him three times his base salary, plus a cash payment equal to three times the amount of whichever is greater: his average bonus over the last two years or his bonus from the previous year.

That combined total would be $87.9 million, according to Countrywide's most recent proxy statement.

In addition, Mozilo has two pensions that his severance pact gives him the right to receive as a lump sum upon his departure. Those pensions were worth $24 million as of December 2006, the last time the company was required to report their value.

Finally, Mozilo would be eligible for accelerated payment of stock options and stock grants if the buyout goes through. Those are worth at least $3 million at current market prices, estimated Richard Ferlauto, director of pension and benefits policy at the American Federation of State, County and Municipal Employees.

Add it all up, and the severance package is potentially worth $115 million.

"He has driven the stock price into the ground and the company has been destroyed," Ferlauto said. "Their customers have lost their homes and he is potentially walking away with more than $100 million. For us, that's unconscionable enrichment."

It's a great country, isn't it?

Aside from the new downloadable protest signs available at the Disinvite Mozilo website, there is no word yet on how these latest developments might impact Tangelo's speaking enagement later this month in San Diego.