Mortgage boss forfeits $37.5m pay

Mr Mozilo says his decision is the right thing to do

The boss of America's largest mortgage lender, Countrywide Financial, has agreed not to accept $37.5m (£19m) owed to him following the bank's takeover.

Angelo Mozilo, Countrywide's chief executive, had been set to earn the sum upon completion of the firm's $4bn all-share sale to Bank of America.

Mr Mozilo, who is set to retire after the deal is completed, said the decision "was the right thing to do".

He has been widely criticised for Countrywide's sub-prime losses.

Back in October, Countrywide said it would have to write off $2.9bn of bad sub-prime debt for the period from July to September 2007.

The write-off contributed to the firm's first quarterly loss in 25 years.

Countrywide is now expected to unveil further losses related to bad debt when it presents its results for the three months to December 2007 later this week.

Inquiry call

Analysts say the company's sale to Bank of America - first announced earlier this month - is a lifeline for Countrywide, as it had reportedly been close to seeking bankruptcy protection.

Executive pay analyst Damon Silvers of AFL-CIO said Mr Mozilo had recognised that there was "something wrong" with him being paid the $37.5m.

"It would be best if Countrywide and Bank of America froze all of his compensation until a thorough inquiry could be completed as to exactly what happened at Countrywide," he added.

Despite turning down the $37.5m, Mr Mozilo is still set to pocket a retirement package of $23.8m, according to Countrywide's most recent filing with the US financial watchdog.