Angelo Mozilo, chief executive of Countrywide Financial Corp., earned $10.8 million and cashed out $121.5 million in stock gains as his company got hammered by losses on sub-prime loans last year.
The stock gains were earned when Mozilo exercised stock options and immediately sold them through so-called automatic trading plans, according to a Securities and Exchange Commission filing released Thursday.
As previously reported in The Times, these plans usually allow executives to sell shares in a regular pattern without worrying about insider trading allegations. However, in what experts called highly unusual moves, Mozilo executed two plans and amended one in the months before the sub-prime market’s implosion.
The moves allowed him to vastly increase the number of shares he sold before Countrywide’s stock tanked last fall. The SEC launched an investigation into stock trading at Countrywide late last year.
However, the 70-year-old CEO’s annual pay plunged from previous years, when he ranked among the nation’s most highly paid executives. He received $1.9 million in salary and $7.6 million in stock awards and options, and had $1.1 million added to the value of his company pension.
The company reported that Mozilo enjoyed perks worth $176,513, including $44,454 in rides on the company’s jet; $23,755 in automobile use; $8,581 in country club dues; and $31,238 in company-paid tax and investment advice.
His total pay of $10.8 million is an 80% cut from 2006, when Mozilo’s salary, stock, pension accruals and perks were worth $51 million.
“Given the attention paid to his pay by Congress and shareholders, the company appears to be showing a little more restraint,” said Daniel Pedrotty, director of the AFL-CIO’s office of investment, which has become an activist shareholder on behalf of the union’s pension plan. “But if Angelo Mozilo was truly paid for performance, he wouldn’t have earned a dime last year. In fact, he’d have to pay shareholders back.”
Calabasas-based Countrywide lost $704 million in 2007, while laying off 11,000 employees. Near the end of the year it suffered a serious liquidity crisis, leading to rumors of an impending bankruptcy.
In January, Bank of America Corp., which already had invested $2 billion in the largest U.S. mortgage lender, agreed to buy Countrywide in a stock swap valued at $4 billion.