Big Payday Awaits Chairman After Countrywide Sale
By Frank Ahrens
Washington Post Staff Writer
Saturday, January 12, 2008; Page D01
Angelo R. Mozilo has pocketed $410 million in salary, bonuses and stock-option gains since he became executive chairman of mortgage lender Countrywide Financial in 1999, according to the executive compensation company Equilar.
Now, the man at the center of the national mortgage crisis stands to collect an additional $112 million in severance when Bank of America buys the company he helped found.
Equilar's numbers are based on Countrywide's most recent proxy statement, which is a year old. According to the statement, if Countrywide is acquired and Mozilo leaves, he is entitled to a cash severance of $88 million. He would also receive a retirement package worth $24 million.
Equilar said that most of Mozilo's compensation since becoming chairman -- $285 million -- has come from stock options. Mozilo has been criticized for selling pieces of his stake in Countrywide, cashing in tens of millions of dollars in options as the housing market dropped.
Mozilo, 69, is a native New Yorker and son of a butcher. He graduated from Fordham University in the Bronx in 1960. While in high school, he took a job at a mortgage company and learned the trade as a messenger and file clerk.
Mozilo went to work full time in the mortgage industry right out of college. His first success came during the population boom at Cape Canaveral, Fla., in the 1960s after President John F. Kennedy's announced goal of putting a man on the moon. He wrote loans for aerospace engineers who descended on the cape to work for NASA, and eventually underwrote home loans across Florida.
In 1969, Mozilo launched Countrywide in Calabasas, Calif., with David Loeb, a former boss and mentor. They had a novel storefront business plan that tried to simplify the mortgage process and replace salesmen with bank-like customer service.
Mozilo said that every American who wanted to buy a home ought to be able to buy one -- a sentiment that led to millions of borrowers in recent years getting mortgages they could not afford.
Fortune magazine ranked Mozilo as the 13th-highest-paid male executive in 2006, with a total compensation of $43 million. He does not crack Forbes's list of the 400 richest Americans, however, meaning that his net worth is less than $1.3 billion.
His contract as chairman of Countrywide runs through the end of next year, and he is expected to continue as a non-employee chairman of the board until the end of 2011. During that time, he will receive a director's salary, plus $200,000 a year, office space and the use of the corporate jet for business trips. His country-club dues will also be paid.
Even if Mozilo is fired as chairman, he would receive $400,000 a year to consult until the end of 2011.
Mozilo can expect pressure from shareholders and members of Congress to part with some of his compensation.
In a written statement yesterday, House Financial Services Committee Chairman Barney Frank (D-Mass.) said Mozilo, "who will be profiting from this transaction personally," should "donate a substantial portion of the $150 million he has collected over the last several years to nonprofits and other institutions that are helping us deal with the problem he helped to create."
Countrywide's stock price has fallen 79 percent in the past year, and the Securities and Exchange Commission has been looking at Mozilo's stock sales during the decline. He has said he did nothing wrong.
Mozilo holds an honorary doctorate from Pepperdine University, has been on the board of Home Depot and is a member of the board of trustees of Gonzaga University.
Staff researcher Richard Drezen contributed to this report.
Showing posts with label Union Labor. Show all posts
Showing posts with label Union Labor. Show all posts
Saturday, December 13, 2008
Friday, July 25, 2008
Unions.........What good are they?
opinion
Six little words
By David Sirota
Article Last Updated: 07/24/2008 09:08:46 PM MDT
History books teem with six-word phrases, from the comforting ("Nothing to fear but fear itself") to the inspiring ("Mr. Gorbachev, tear down this wall") to the embarrassing ("Read my lips: no new taxes"). But the six words "on the basis of union membership" could be more momentous than any of those. Though hardly Roosevelt's rhetoric, Reagan's bluster or Bush's clumsiness, the clause could solve America's wage crisis.
Of course, when Tom Geoghegan told me this in a Chicago park two weeks ago, I almost snarfed my coffee through my nose. Solving major social problems typically demands more than six words. But as the longtime labor lawyer and author explained his idea to me on a muggy afternoon, it started making sense.
Geoghegan reminded me that data show the more union members in an economy, the better workers' pay. The problem, he said, is that weakened labor laws are allowing companies to bully and fire union-sympathetic workers, thus driving down union membership and wages.
Enter Geoghegan's six words. If the Civil Rights Act was amended to prevent discrimination "on the basis of union membership," it would curtail corporations' anti-labor assault by making the right to join a union an official civil right.
"Hang on," I interrupted. "Joining a union isn't a civil right?"
Correct.
Under current law, if you are fired for union activity, you can only take your grievance to the National Labor Relations Board — a byzantine agency deliberately made more Kafkaesque by right-wing appointees and budget cuts. Today, the NLRB takes years to rule on labor law violations, often granting victims only their back pay.
Union leaders are now focused on reforming the NLRB — an admirable goal — but Geoghegan's plan implies that workers are harmed by being legally leashed to Washington in the first place. His proposal says rather than being forced to rely on an unreliable bureaucracy for protection, workers should be empowered to defend themselves.
The six words would do just that. Regardless of whether the NLRB is strengthened or further weakened, persecuted workers would be able to haul union-busting thugs into court. There, unlike at the NLRB, plaintiffs can subpoena company records and win costly punitive damages.
Bolstering his argument, Geoghegan told me to consider variations in corporate behavior.
For example, because the Civil Rights Act bars racial discrimination, businesses are motivated to try to prevent bigotry — they want to avoid being sued. But when it comes to unions, there is no such deterrent. The lack of civil rights protection effectively encourages businesses to punish pro-union employees — and publicize the abuse to intimidate their workforce. By making the six words law, the dynamic would shift. Companies would have a reason — fear of litigation — to respect workers' rights.
When Geoghegan and I finished chatting, I remembered why I believe he is America's most talented writer and thinker on labor issues. His relative anonymity is a tragicomic commentary on the media and the American left. The Milton Friedmans are celebrated by pundits and cast in bronze by conservative think tanks, while the Geoghegans are dismissed by the chattering class and ignored by a progressive movement that regularly venerates Hollywood celebrities as its heroes.
Perhaps, though, this proposal will change things. In developing a way to shift incentives, Geoghegan has discovered a solution that both unionists and economists can love. It cribs the best from liberals' pro-union sympathies and conservatives' distrust of Big Government, and should make him famous (or at least a cabinet secretary).
After all, anyone who can bring such disparate ideologies and adversaries together is worthy of serious consideration — as is his six-word stroke of genius.
Denver political analyst David Sirota (www.credoaction.com/sirota) is author of "The Uprising," published in June. He is a fellow at the Campaign for America's Future and a board member of the Progressive States Network.
Six little words
By David Sirota
Article Last Updated: 07/24/2008 09:08:46 PM MDT
History books teem with six-word phrases, from the comforting ("Nothing to fear but fear itself") to the inspiring ("Mr. Gorbachev, tear down this wall") to the embarrassing ("Read my lips: no new taxes"). But the six words "on the basis of union membership" could be more momentous than any of those. Though hardly Roosevelt's rhetoric, Reagan's bluster or Bush's clumsiness, the clause could solve America's wage crisis.
Of course, when Tom Geoghegan told me this in a Chicago park two weeks ago, I almost snarfed my coffee through my nose. Solving major social problems typically demands more than six words. But as the longtime labor lawyer and author explained his idea to me on a muggy afternoon, it started making sense.
Geoghegan reminded me that data show the more union members in an economy, the better workers' pay. The problem, he said, is that weakened labor laws are allowing companies to bully and fire union-sympathetic workers, thus driving down union membership and wages.
Enter Geoghegan's six words. If the Civil Rights Act was amended to prevent discrimination "on the basis of union membership," it would curtail corporations' anti-labor assault by making the right to join a union an official civil right.
"Hang on," I interrupted. "Joining a union isn't a civil right?"
Correct.
Under current law, if you are fired for union activity, you can only take your grievance to the National Labor Relations Board — a byzantine agency deliberately made more Kafkaesque by right-wing appointees and budget cuts. Today, the NLRB takes years to rule on labor law violations, often granting victims only their back pay.
Union leaders are now focused on reforming the NLRB — an admirable goal — but Geoghegan's plan implies that workers are harmed by being legally leashed to Washington in the first place. His proposal says rather than being forced to rely on an unreliable bureaucracy for protection, workers should be empowered to defend themselves.
The six words would do just that. Regardless of whether the NLRB is strengthened or further weakened, persecuted workers would be able to haul union-busting thugs into court. There, unlike at the NLRB, plaintiffs can subpoena company records and win costly punitive damages.
Bolstering his argument, Geoghegan told me to consider variations in corporate behavior.
For example, because the Civil Rights Act bars racial discrimination, businesses are motivated to try to prevent bigotry — they want to avoid being sued. But when it comes to unions, there is no such deterrent. The lack of civil rights protection effectively encourages businesses to punish pro-union employees — and publicize the abuse to intimidate their workforce. By making the six words law, the dynamic would shift. Companies would have a reason — fear of litigation — to respect workers' rights.
When Geoghegan and I finished chatting, I remembered why I believe he is America's most talented writer and thinker on labor issues. His relative anonymity is a tragicomic commentary on the media and the American left. The Milton Friedmans are celebrated by pundits and cast in bronze by conservative think tanks, while the Geoghegans are dismissed by the chattering class and ignored by a progressive movement that regularly venerates Hollywood celebrities as its heroes.
Perhaps, though, this proposal will change things. In developing a way to shift incentives, Geoghegan has discovered a solution that both unionists and economists can love. It cribs the best from liberals' pro-union sympathies and conservatives' distrust of Big Government, and should make him famous (or at least a cabinet secretary).
After all, anyone who can bring such disparate ideologies and adversaries together is worthy of serious consideration — as is his six-word stroke of genius.
Denver political analyst David Sirota (www.credoaction.com/sirota) is author of "The Uprising," published in June. He is a fellow at the Campaign for America's Future and a board member of the Progressive States Network.
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