USATODAY.com
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The payments of stock valued at $10 million for chief executive Angelo 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 sub-prime 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 Schumer, D-N.Y, said in a statement. 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 California-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.
And here I was thinking he should have resigned in disgrace, silly me.
I think the Feds need to change the laws on public traded companies that are going under and companies that file bank bankruptcy. Shareholders should received nothing and the senior management receive nothing and be entirely purged.
Check this store out “Fed eyes Nordic-style nationalization of US banks” http://tinyurl.com/2nerp4
Why are CEO’s rewarded for poor management??
Why do the shareholders put up with it??
What a great job! No matter how bad or good you manage the company. You will always make a lot of money!!
Here is one thing I think Bobbo and I agree on. These guys not only should NOT get paid, but pray they avoid jail time.
I would give all executives a reasonable base pay (not to exceed 6 figures) and a bonus based on a small percentage of the increase in profit. The bonus would also have to be approved in a shareholders meeting before being paid.
I would call that a real incentive program.
“The payments, described as “performance-based” stock rights…”
Stockholders should launch a class action on this guy. Most publicly traded companies are nothing but legalized theft institutions.
A (black) humourous layman’s guide to this sort of thing
http://www.brasschecktv.com/page/187.html
I was watching one of the politics talk shows yesterday morning on ABC. George Will suggested to the liberals at the table something he called Will’s Law, to which everyone agreed (included Robert Reich, Donna Brazile and Paul Krugman). He suggested any company that receives bail-out or support money from the government that their executives not be paid more than a US Gov. GS-15 (about $124k per year). I like it and Robert Reich added that companies that receive any government subsidy at all should have the same rule…
Someone should “whack” this tomato-faced goomba if he collects even one dollar from this fiasco.
I just watched the Video #5 posted.
It’s really good. I first though it was a monty python routine, and then started crying when I realized it was serious business.
Just don’t buy stock in companies you don’t like. What’s the problem? It’s not your money.
Countrywide screwed me and the wife over….
They “helped us” refinance to improve our cash flow when the Bank refused.
However, the Equity loan they insisted on doubled it’s required minimum monthly payment within six months.
Meantime, they mis-figured our Escrow figures (we’d been making insurance and tax payments ourselves), and that added about $200/month to the mortgage. Then they decided to tack on another 15% because they could – the law allows them to do that to allow for mid-year increases in the tax or insurance figures. If the increases don’t happen, they just keep the money in the Escrow account, but we lose access and interest, of course….
I wouldn’t recommend them to Khomeni at this point….
Not to mention sending monthly statements (and payment vouchers) on the sixth that are due on the 10th….
(Anybody who sends a payment to ANYBODY without their payment voucher is going to get nailed. The wife stopped by a furniture store one afternoon. We owed them about $400, and she had a spare $50, so she GAVE THEM A CHECK for that amount. The store refused to give us credit for the $50, even though I had the cancelled check “in hand”. A letter from my lawyer settled that, but I’m guessing they figured that we’d be money ahead to just let them steal it, due to the lawyer’s fees. I wish the lawyer was still alive – I’d sic him on Countrywide….)
Ten percent of that guy’s bonus would put me more or less “set for life”…. My vote is burning at the stake….
Regards,
Stu.
Set the tanning bed to BBQ.
#2 – Why are CEO’s rewarded for poor management??
Especially when people who actually work for a living rarely, if ever, get rewarded even for exceptional performance.
Just another example of how money is the real power here. Level playing field, equal opportunity, tell it to the homeless.
@10 “I wouldn’t recommend them to Khomeni at this point….”
Haha, nice one!
We should have made nice with Cuba, Venzuala and Iran and let Countrywide and pals sell them mortgages and collapse their economies.
# 9 pat
Two problems with that.
One. IT IS OUR MONEY when the government bails them out.
Two. What about the poor chumps that DID own stock in that company BEFORE these asshats screwed it up?
yipes – 10mil buys a lot of orange clown makeup
#15 J said, “One. IT IS OUR MONEY when the government bails them out.”
Countrywide was bailed out by the gov’t?? If they were, write your rep. They control where $ are spent.
“Two. What about the poor chumps that DID own stock in that company BEFORE these asshats screwed it up?”
What of it? No one forced them to buy the stock. Buying stock in a company is a risk, not a guarantee. A person who buys stock isn’t responsible for taking risk but you want personal responsibility taken by a CEO? Interesting viewpoint. This is a civil suit material but not otherwise a matter for gov’t.
So far, you are not making sense. Did mistype?
Another headache-inducing ceo story. Do these people even give a sh*t about the companies they head up? Is there some kind of ceo school where all they teach is how to get the best contracts regardless of the company being ran into the ground? arrrrrrgghhhhh!
#18 – It’s called the MBA program.
Of course, what you all fail to realize, is that according to the way these companies think lately, a mere $10 million dollar package IS a disgrace. I’m sure that his inability to buy the yacht he really had is his eye on will make him feel properly chastised.
#10, why didn’t you read the details of your contract?
Basically, your bank refused, and then you decided that Countrywide was better, and now we should feel sorry for you? According to the posters on this board, it is criminal for people like Countrywide to give you any money, you’re just not creditworthy.
# 17 pat
“Countrywide was bailed out by the gov’t?? If they were, write your rep. They control where $ are spent.”
Well not directly yet but all those bad loans they made will cost the taxpayers in one way or another. Lower property values in areas where all those foreclosures take place. All the tax right offs for bad debt that Countrywide will use. Don’t pretend that the tax payer isn’t going to be flipping the bill.
“What of it? No one forced them to buy the stock. Buying stock in a company is a risk, not a guarantee.”
That isn’t the point. The point is the asshats that made the decisions that lost the money still walk away with their millions.
“A person who buys stock isn’t responsible for taking risk but you want personal responsibility taken by a CEO?”
YOUR GOD DAMN RIGHT!!!!!!! THEY MADE THE DECISIONS THAT LEAD TO THE MONEY BEING LOST!!!!
“This is a civil suit material but not otherwise a matter for gov’t.”
Bullshit they are a publicly traded stock therefore under government regulation.
“So far, you are not making sense. Did mistype?”
Only to people who have their head up their ass.
#22 – “YOUR GOD DAMN RIGHT!!!!!!! THEY MADE THE DECISIONS THAT LEAD TO THE MONEY BEING LOST!!!!”
I agree. Making poor investment decisions results in lost money. Why are you yelling when you agree with me?
# 23 pat
No pat stop being dense.
The CEO’s are responsible for the lost money. Why should they walk away with millions while the rest of the stock holders get screwed? This loss of money isn’t because of fair competition. It is due to the mis management by the CEO and how he ran the company. Yet you seem to think that is ok that they get these payout’s while the stockholder and employee’s get screwed.
I can tell you are a person of moderate wealth who thinks one day they will let you play in their game so you are ok with these ridiculous inequities taking place because one day you might be on the winning end of it. Guess what? You won’t.
#24 – Wrong. But, let me take a stab about you.
You are the type of person who, knowing the rules of a game and gambles $, cries when he loses as per those same rules. Not only that, you then demand that some agency come and make you whole despite your foolishness. I think that is what your mindset is.
# 25 pat
Wrong! I am about to profit from the Countrywide debacle. Buy low sell high! lol. That is why I am rich and you are a wanna-be who thinks it is ok to be unethical and screw people to make money. I have never once had to screw someone to profit nor has anyone lost a job because of the money I have made.
So you think it is ok to reward people when they cause the collapse of a company from bad decision making?
“Not only that, you then demand that some agency come and make you whole despite your foolishness.”
When someone is doing possibly illegal things?YES!!!! It is the Job of the SEC to do just that!
RULES?
Part of the RULES is that publicly traded companies are that they act in best interest of the company and the shareholders. They are regulated by the SEC as part of those RULES. When a CEO asshat violates that they should be held accountable.
They were not making decisions that were in the companies best interest only their own.
#25 – The rules are that the Board sets compensation policy. Did the CEO violate any laws? If not, then it was “by the rules”. Quit while you are Waaaay behind.
# 27 pat
“Did the CEO violate any laws?”
He very well may have.
“If not, then it was “by the rules”. ”
Really? Do you even know the rules that govern publicly traded companies? I do.
“Quit while you are Waaaay behind.”
LOL. That’s a laugh. Let me know when you make your first Million.
Maybe you ought to read the Executive Compensation Disclosures report and see where the SEC stands on CEO compensation and the RULES that govern it.
At least those SOBs should have to pay back the money they cost the American taxpayer from that compensation package.
#28–J==for my education==are the SEC rules just for disclosure or do they set any actual requirements?
I have a recollection they were going to limit the tax deductible portion to the first million or so–don’t know if that got passed or not.
Do you know of a website that is on point?
PS–I’m thinking “sometimes” excessive ceo compensation packages are poison pills designed not to compensate but to discourage take-overs and sometimes perhaps as here they aren’t well crafted?
Obvious change in the law needed here as “Boards” aren’t doing their jobs when corps go into the tank and yet “performance provisions” still gush out millions.
When something is broken, you can let it stay broken for years, but “eventually” it needs to be fixed?