• Since Countrywide as listed on the NYSE in 1984, Angelo Mozilo has sold $406 million worth of the company's shares, which he obtained through stock options. In the 12 months ending August 2007 (at which time the subprime crisis exploded on Wall Street), Mozillo alone sold off $129 million worth of Countrywide shares. Countrywide officials all put together sold $850 million worth of stock from 2004 to 2007. At the same time, during late 2006 and early 2007, the company paid $2.4 billion to repurchase its own stock. Countrywide shares today stand at $5.03. One year ago, it was priced at $39.03.


• Forbes lists his five year compensation total from 2001-2006 as $160.14 million. From 2003-2007, the five year compensation goes up to a whopping $391.88 million, with average annual compensation for the six year period preceding 2008 at $66.43 million per year, the highest paid CEO among all Diversified Financials companies.


• The Wall Street Journal revealed in an article on June 7th 2008, that Angelo Mozilo had a practise of granting sweetheart deals to some people close to him. These people, known as 'Friends of Angelo' within the company, received lower rates, and at least one borrower has not been able to repay his loan.


• The FBI and the Justice Department have opened a criminal investigation against Countrywide and its officials for securities fraud, for having falsified in security filings its financial condition and the status of loans it made. Countrywide also faces a class-action lawsuit in New York for insider trading and an overall failure to monitor lending practices that led to the company’s collapse. The plaintiffs in the case say they hoped to recover money for shareholders from Countrywide officials. Sen. Chuck Schumer (D-NY), has asked the FTC to investigate whether Countrywide took advantage of borrowers who filed for bankruptcy protection to try to keep their homes.

All this paints a picture of a CEO who made up the rules as he went along, at the same time filling his own coffers, often at the expense of ordinary shareholders. To top that off, considering his overall control over both the mortgage lending and the banking businesses of Countrywide, Mozilo set the tone for wanton investment of funds accrued through deposits at the Countrywide Bank into subprime mortgage loans made by Countrywide Financial, which were then packaged into mortgage backed securities and sold to large institutional investors. When the subprime crisis hit their mortgage lending business, the foreclosures started piling up and the MBS became worthless, depositers at the bank rushed to withdraw their funds, leading to a near bankruptcy in January 2008, and the company was ultimately rescued by the $4.1 billion buyout proposal from Bank of America.

References:

http://www.forbes.com/lists/2008/12/lead_bestbosses08_Angelo-R-Mozilo_7G33.html

http://en.wikipedia.org/wiki/Angelo_R._Mozilo

http://online.wsj.com/article/SB121279970984353933.html

http://www.nytimes.com/2008/05/15/business/15countrywide.html

http://about.countrywide.com/bios/Biography.aspx?CtlID=0

http://www.money-rx.com/blog/2008/06/countrywide-shareholders-to-vote-on.html

# posted by Admin @ 9:26 PM