Countrywide Financial Corp. founder Angelo R. Mozilo, one of the nation's highest-paid chief executives, stands to reap $115 million in severance-related pay if his troubled company is acquired by Bank of America, regulatory filings show.
Free rides on the company jet also are included in Mozilo's departure deal, and the company would pick up his country club bills until 2011.
Other executives, including Home Depot's jettisoned chief executive Robert L. Nardelli, have garnered bigger packages. But critics say Mozilo's arrangement is especially nettlesome given the extensive losses that Countrywide investors have suffered.
"This is a failed chief executive - a failed and overpaid chief executive - who has driven his company to the brink of bankruptcy," said Daniel Pedrotty, director of the office of investment at the AFL-CIO. "I think shareholders are going to be especially outraged if he walks away with another pay-for-failure package."
Neither Mozilo nor Countrywide officials returned calls for comment.
Bank of America announced yesterday that it would acquire Countrywide for $4.1 billion in stock. If the deal wins all the necessary approvals, Mozilo potentially could stay on with the company.
But he probably could make more money by leaving, compensation experts say.
For one thing, Bank of America is unlikely to pay Mozilo more than its own chief executive, Kenneth D. Lewis. Lewis, whose company has a market capitalization of $174 billion, earned $27.9 million in 2007, according to regulatory filings. Mozilo earned $48.1 million last year, and Countrywide's market capitalization is $4.5 billion.
If Mozilo is fired or resigns voluntarily, his employment contract guarantees Mozilo three times his base salary, plus a cash payment equal to three times the amount of whichever is greater: his average bonus over the past two years or his bonus from the previous year.
That would be $87.9 million, according to Countrywide's most recent proxy statement.
In addition, Mozilo has two pensions that his severance agreement gives him the right to receive as a lump sum upon his departure. Those pensions were worth $24 million as of December 2006, the last time the company was required to report their value.
Finally, Mozilo would be eligible for accelerated payment of stock options and stock grants if the buyout goes through. Those are worth at least $3 million at current market prices, estimated Richard C. Ferlauto, director of pension and benefits policy at the American Federation of State, County and Municipal Employees.
