The SEC has apparently commenced an informal investigation into Countrywide Financial CEO’s sales of stock in recent months. Angelo Mozilo’s miraculous sense of timing captured our attention at Finlay ON Governance. We’re glad the SEC has been watching too.
Last week we had some thoughts about Countrywide Financial’s subprime corporate governance and the phenomenon of miraculously timed stock sales on the part of CEO Angelo Mozilo. For him, the miracle was in pocketing millions from the sale of his shares just months before the subprime disaster jolted the market and hammered its stock. (more…)
Over the past four years, the board of Countrywide Financial paid CEO Angelo Mozilo nearly $400 million. If he had made, say, just $100 million during that time, would the company be facing any greater crisis than it is today. If he had been paid twice as much, would his interests have been so much better aligned with investors in avoiding the current disaster that he would have invoked superhuman skills to do so? It is against the gales of logic and reason that the self-serving arguments of profligate boards and New Gilded Age CEOs quickly become demolished and shown for the rubbish they are.
Countrywide Financial is a name that has become synonymous with the fiasco in the subprime loan market. It rode the wave of dubious mortgages with apparently little regard for, or understanding of, the laws of economics or physics. When it was working, it paid off handsomely for many in the company, especially CEO Angelo Mozilo. Last year, Mr. Mozilo received $43 million in pay and a further $79 million from the exercise of stock options. (more…)