As a former US Army paratrooper, I know a little bit about parachutes. As a businessman, I know that profit is a return for risk. What I don’t understand is how a man who risked nothing personally, yet ruined the lives of thousands of employees, set our financial markets into a tailspin, is granted a $115 million dollar golden parachute?
If you haven’t seen “Enron, the smartest guys in the room”– I suggest you hurry up. It’s this kind of financial smoke and mirrors that will ruin our country.
If there isn’t a Congressional investigation and charges brought, we may as well admit that we have criminals in Congress. Of course, if you look to see who Mr. Mozilo gave money to in Washington, you may understand why they look the other way.
Countrywide’s Mozilo To Leave In Luxury – Forbes.com
Angelo Mozilo made nearly $150 million selling Countrywide shares before they tanked. The mortgage lender’s chief executive can nearly double that windfall and also earn some luxurious perks if he leaves his post following the struggling company’s acquisition by Back of America.
Mozilo will reportedly receive up to $115 million in severance in cash and stock if he resigns or is fired. Mozilo’s future at the company he founded is in doubt after its sale.
Mozilo, the son of a Bronx butcher, would be able to have some fun in style thanks to some perks in his severance package. In addition to the huge payout, Mozilo can take free rides on the company jet and have his country-club bills paid for, according to a Friday report in the Los Angeles Times.
Countrywide suffered as mortgages it made to borrowers with poor credit histories defaulted at higher-than-expected rates. The spiking defaults have forced the company to lay off thousands of employees and line up billions of dollars in financing to stave off bankruptcy. In a sign of how desperate Countrywide’s situation has become, Countrywide accepted an offer from Bank of America that was at a 8.9% discount to its Thursday closing price. (See: “Countrywide On Clearance”)
Mozilo raised eyebrows by selling progressively larger amounts of company shares prior to a rash of bad news that drastically reduced the value of those shares. Mozilo made around $150 million in the stock sales. Shares of Countrywide have plummeted 82.5% over the past year.
If we don’t put an end to this outrageous CEO and stock market casino, we’ll end up with no jobs, and no way to pay for capital goods. Investing isn’t done for a day or two, and no man is worth over a million a year if he’s laying people off (unless he owns the company, lock, stock and barrel).
Shareholders and stakeholders are taking a beating, but in the long run, when a company as big as Countywide bites it- all of us pay. This man is a criminal, and those that allow him to profit by his actions are also liable.
It’s time we had a voice in Washington who had the guts to ask for the money back.