Countrywide resists oversight on pay
Countrywide Financial Corp., which has been criticized over its top executives’ pay packages, Wednesday mounted a campaign against a proposal to give shareholders a say in setting compensation for Chief Executive Angelo Mozilo.
The largest U.S. mortgage lender voiced its opposition hours before Ingersoll-Rand Co. shareholders endorsed a similar proposal at the manufacturer’s annual meeting.
Shareholders of at least four public companies this year have backed proposals to give them nonbinding votes on pay for top executives in a bid to thwart perceived runaway compensation. Companies have generally opposed such proposals.
The American Federation of State, County and Municipal Employees said it would offer its “say on pay” proposal at Countrywide’s June 13 annual meeting, after getting more than 40% support last year. It said the Calabasas-based lender had not publicly identified it as offering the proposal.
For 2006, Mozilo received $48.13 million in total compensation. Countrywide has said his pay may be cut in half for 2007. The company’s shares have fallen this year in the wake of the U.S. housing slowdown.
“Mozilo has been one of the most highly paid corporate executives for many years,” Richard Ferlauto, the federation’s director of corporate governance and pension investment, said in an interview. “The company has stepped back a little bit, but his pay has simply been reduced from astronomical to merely extraordinary.”
The federation has offered say-on-pay proposals at 10 companies this year.
In a Securities and Exchange Commission filing, Countrywide said it should not be “singled out” with a say-on-pay proposal. The company said it had generated shareholder returns of 340% over five years and 561% over 10 years.
It said giving shareholders a vote on pay would make it harder to recruit talent, and that Countrywide’s board was best positioned to make compensation decisions.
Proxy Governance, a shareholder advisory firm, on Monday said it backed the federation’s proposal.
