BREAKING: Bank Of America Buys Countrywide, CEO Gets Up To $115 Million Parachute

Hey there, sports fans: Bank of America will buy everyone’s favorite evidence-forging subprime lender, Countrywide for a cool $4 billion dollars.

Countrywide’s CEO will receive up to $115 million dollars when he leaves after the sale is complete, says ABCNews.

During calendar 2006, the latest period available for review in Securities and Exchange Commission filings, Mozilo took home $48.1 million in compensation. An early analysis of SEC filings by the Los Angeles Times suggests he could get upward of $115 million when he leaves after the sale is complete, despite the fact that the company tanked during the recent subprime mortgage crisis.

In December, Countrywide reported a record number of foreclosures and delinquencies in its loan portfolio. The value of shares has fallen more than 84 percent since mid-May of last year.

Bank of America today confirmed that Mozilo will stay on with the company through a “transition period.” Countrywide wouldn’t comment on Mozilo’s pay.

In addition, ABC says that Bank of America will continue to employ Mozilo as a “consultant” until 2011. For this he will be paid a salary of $400,000 a year.

He will receive office space, secretarial support, use of the company jet, and country club dues. He will continue to receive life insurance and financial planning benefits for 3 years, after which he and his wife will receive free health insurance for life.

Sick.

Lavish Payout, Perks for Failed Mortgage CEO [ABCNews]
(Photo:ABCNews)

PREVIOUSLY: Bank of America Can’t Afford Soap For Employee Break Room
Countrywide Invents Evidence In Foreclosure Hearing
Countrywide Says It’s So, Like, Totally Not Going To Go Bankrupt, OK?
Bank Of America May Buy Countrywide
86,000 Mortgage Related Jobs Cut In 2007

Comments

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  1. DeeSarco says:

    Doesn’t sound like he’s getting paid enough for a company doing so well.

    NOT!!!

  2. OPRAH says:

    Only in America.

  3. Dervish says:

    Uh oh…guess who owns our mortgage!

  4. warf0x0r says:

    The best part is the PREVIOUSLY tag that shows a huge list of articles with names like BoA has no money for soap. Awesome.

  5. B says:

    I’m sure he deserves it. He did such a good job, right?

  6. ARP says:

    And you wonder why we’re so litigious. The people at the top get paid huge amounts of money to do nothing (or worse, ruin a company) while everyone else gets laid off, crappy insurance, no vacation time, etc. So when there’s an opportunity to stick it to a big company with even a questionable claim, we gladly do so. I know some blame the “entitlement” attitude for litigation, but I think its more frustration when they see things like this.

  7. Meg Marco says:

    @warf0x0r: I just had to.

  8. bohemian says:

    He should get downsized in the merger just like everyone else does. They should be able to fire a CEO for incompetence and this guy kinda qualifies.
    I generally don’t advocate angry mobs but for this guy I would make an exception. I think sending his home address, a plane ticket and a complimentary pitch fork or torch to anyone who fell victim to Countrywide would be a reasonable idea.

  9. picantel says:

    This is great news. About a year ago Countrywide did some bad things to my wife and it took about 6 months to fix. I let them off the hook. BOA was a party to bank account hacking and told me to F off basically. Now I can hit countrywide knowing I am really hitting BOA. woot

  10. shrtcrt says:

    Reading this like this just makes me sick. Like it was said above, companies lay off workers, but the top executives take home MILLIONS. Now couldn’t they give up a few things to keep people employed? Really a country club membership!! Give me a break.

  11. sir_eccles says:

    @warf0x0r: They’ll just get a loan, duh!

  12. Aphex242 says:

    For the record, Mozilo co-founded Countrywide about 40 years ago and built it from the ground up with essentially nothing.

    Not saying the guy deserves this, he doesn’t, but at the same time, some of the comments here are completely ignorant on what his history is with this company.

    He didn’t ruin the company, he built it up from a 5 man shop into the largest mortgage lender in the country. Period.

    I’ll be the first to agree most CEOs in America are overcompensated. But you have to learn when to pick your battles, and this one’s not an easy one to argue. He literally spent his entire adult life running this company.

  13. TechnoDestructo says:

    You know, if you were all deciding how much your coworkers get paid, and they were all deciding how much you get paid, you’d get paid 115 million dollars to get fired, too.

  14. chrisgeleven says:

    Can you imagine what they would have gotten if they had sold before the mortgage crisis?

    Although I guess Bank of America would not have bothered to purchase Countrywide then…

  15. chiieddy says:

    To be honest, as a non-subprime borrower from Countrywide, I’m not sure which is worse, the mortgage company I have going under or being owned by Bank of America. I’ve previously declared I never want to do business with BoA again. Now what are my choices? Refinance again? (Not worth it) Or deal?

  16. Aphex242 says:

    Not worth it. I worked in the mortgage industry in customer service and I can only tell you your loan could easily be resold, on a whim, to BofA or anyone else. Don’t believe anyone who tells you otherwise. Ever.

    Having said that, refinance if you have a solid, fiscal reason for doing so. Emotional ones, however, should be left on the wayside.

    I’ll be the first to agree that reality sucks, but then again, that doesn’t change facts.

  17. headon says:

    @aphex242: looks like he spent his life building a predator and a failure. Can him pay him nothing!

  18. pinkbunnyslippers says:

    Gee – wonder why we’re having a fucking mortgage crisis.

  19. shadow735 says:

    Aphex242 thank God someone here isn’t joining in the rock throwing by basing their comments on gossip and their own opinions when they don’t have a clue in hell about the whole story. Mozillo didn’t destroy countrywide it was stupid loans to stupid people that were greedy for fancy toys and money to take out of their personal ATM homes.
    The mortgage market made countrywide take the wrong path if they didn’t they would have been left behind, its just too bad they didn’t take the other road if they had then Countrywide not Bof A would have been doing the buying.

  20. CurbRunner says:

    Golden parachutes that large should not be handed out without a faulty rip-cord.

  21. Aphex242 says:

    @shadow735: Well even I’m not certain I’d characterize CW as such a victim in this, they definitely made their own bed here. Greed definitely did win, and the industry itself (which frankly they had a large role in the shaping of) is fairly broken, I’d say.

    Greed definitely ‘won’, but when you employ people on a commission basis, won’t it always?

    The industry needs to change pretty fundamentally to prevent another meltdown like this, IMHO. I won’t say CW was a victim, but they’re hardly the biggest bad guy. Alot of what I saw, while I worked there, was downright admirable compared to some of the garbage I’ve seen lenders pull.

  22. Joe says:

    that fucker should fry

  23. Parting says:

    I’m sure money won’t follow him to hell ,,

  24. cashmerewhore says:

    @chiieddy:

    I’m in the same boat as you. I closed my BoA CC last year (they bought it from MBNA and it just went to shit) and now my mortgage is going to be in their hands. I believe this is the LAST time my mortgage should be changing hands (My closing documents said up to three owners IIRC), BoA will technically be the third. Since it is a 30 year fixed they can’t change anything, but damn, they still suck.

    Wonder if that does away with the 15 day grace period?

  25. deserthiker says:

    What he should get is lynched in a back alley.

  26. iamme99 says:

    I lost my job last week from the screwed up, poorly managed, tier 3 company I was working for.

    Know what I got? Zlich, nada, nothing! Just a pat on the ass and a see-ya around. I even had to threaten legal action to get all the vacation time owed me.

    Ain’t life grand? We live in a Superman Bizarro world where everything is backwards.

  27. pastabatman says:

    @shadow735:

    “The mortgage market made countrywide…”

    Nuthin made nobody do anything. Countrywide is a big boy and can make educated decisions don’t you think? If everyone was jumping of the brooklyn bridge, would countrywide do that too? why didn’t the market MAKE Goldman Sachs do it?

    The one thing that is certain. It will take at LEAST $115 mil to bring his face back to something resembling human form.

  28. TMurphy says:

    We need to get one of the Consumerist faithfuls to reach CEO of a large company, and set an example of how to make better use of a proposed $115 million bonus.

  29. PICKLES_IN_MY_TUNA says:

    UGH!

  30. KJones says:

    His $115m “golden parachute” should be in the form of Enron shares…back when they were worth more than $100.00, that is.

    That chump is more deserving of a golden shower than a golden parachute.

  31. thorzdad says:

    So…when do we just start shooting CEOs on sight? I mean…that much cash and bennies really should come with some kind of commensurate risk, shouldn’t it?

  32. shadow735 says:

    APHEX242, while I agree Countrywide went the wrong way when the subprime market started to get crazy due to increasing home values and all the different Arm loan products out there.
    The borrowers are also to blame, it’s a two way street, greedy borrowers that wanted to use the equity in their homes for their own personal ATM machine, new fancy cars, put their kids thru college, vacations ect, ect. Borrowers getting houses way out of their means, not reading and understanding the docs, just signing on the dotted line without making sure they could afford future pmts when the loan reset.
    It’s a two way street, borrowers and Mortgage companies are both to blame but the blame tips squarely on the borrowers shoulders for not doing their homework.
    After all Alcohol is available to buy in the store but if you act irresponsible and drink and drive you get a DUI, you cant go sue the store because they made the alcohol available.

    People cry predatory lending but its also predatory borrowing. Lies on both side, just as both sides were honest. It’s a mixture.

    Oh PASTABATMAN you don’t know much about economics, Countrywide took the path it did so it didn’t get left behind, it’s the name of the industy.. If you don’t follow the trend you will get left behind Countrywide wants to stay ahead as a leader in the indusrty, Too bad that Countrywide didn’t decide to not follow the subprime train if they had decided to not provide the risky loans they would be strong and unaffected by this crash and they not B of A would be gobbling up the Companies that were struggling on the side of the road.

  33. skeleem_skalarm says:

    Ah shit! No wonder my escrow fees increased by $20/month with no actual changes in what they need to pay out for us. Should have handled our own property taxes!

  34. shadow735 says:

    Skeleem if your taxes and insurance didnt change the $20 increase could be due to an escrow shortage of $240 or a lack of the reserve amount. your escrow statement that you received should have listed why or what the increase is due to.
    If it is due to a escrow shortage mort companies usually mail out a escrow disclosure statement that gives you the option to pay the shortage so that a escrow shortage impound isnt added to your account.

  35. skeleem_skalarm says:

    Shadow, that thought crossed my mind, but they didn’t send us anything by way of explanation, at least according to my husband. He just noticed on our last mortgage statement (due February 1) that our escrow had risen by $20/month. I’m out of town now, but when I get back home, I’m going to check into this further. Any way it goes, I’m not real excited about BoA owning my mortgage, especially after reading all the complaints about them here.