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Last Updated: Friday, 7 March 2008, 21:45 GMT
Sub-prime CEOs defend high wages
Angelo Mozilo
Mr Mozilo: 'As our company did well, I did well'
Executives have been defending before a Congressional committee large salaries and pay-off packages earned while their firms were hit by the sub-prime crisis.

Angelo Mozilo, boss of Countrywide Financial, Merrill Lynch ex-head Stanley O'Neal and ex-Citigroup boss Charles Prince all faced the panel.

The three firms were hit by the US home slowdown and subsequent credit crunch.

"It seems that CEOs hit the lottery when their companies collapse," said House Oversight chair Henry Waxman.

'Broken down'

At the opening of the hearing Mr Waxman said: "Any reasonable relation between their compensation and the interests of their shareholders appears to have broken down."

Mr Waxman highlighted the fact that Mr Mozilo received more than $120m in compensation and sales of Countrywide shares in 2007, at the same time that the firm registered losses of $1.6bn.

And Merrill Lynch lost $10bn in 2007, but Mr O'Neal got a $161m retirement package.

Meanwhile, Mr Prince was paid a bonus of $10.4m for 2007 as well as $28m in stock and stock options.


The three told the committee the reasons behind their packages.

Mr Mozilo said his direct compensation and value of his shareholdings fell heavily in 2007 and will not receive a bonus for 2007 and 2008.

"As our company did well, I did well," said Mr Mozilo, founder of Countrywide, the nation's largest mortgage lender.

"But when our company did not do well, as in 2007, my direct compensation and the value of my holdings declined materially, which is as it should be."

Mr O'Neal also said: "I received no bonus for 2007, no severance pay, no 'golden parachute.'

"The amount discussed in the press consisted mainly of deferred compensation, stock and options that I had earned during the years prior to 2007."

"I'm proud of my accomplishments," Mr Prince said, referring to his contributions to Citigroup's growth.

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