House Oversight and Government Reform Chairman Henry Waxman (D-Calif.), for a hearing next month, wants to question three current and former CEOs of companies involved in the subprime mortgage crisis about their own multi-million pay packages.
Waxman has sent letters to Angelo Mozilo, CEO of Countrywide FInancial, Charles Prince, former CEO of Citigroup, and E. Stanley O'Neal, former CEO of Merrill Lynch, asking them whey they "stand to collect tens of millions of dollars in severance payments and other compensation," even as their current or former companies are losing billions of dollars in the subprime mortgage meltdown.
Citigroup announced today that is would write off "as much as $20 billion in mortgage-related investments," according to the Wall Street Journal, while laying off as many as 20,000 employees. According to the WSJ, Prince left Citigroup with "accumulated benefits" valued at more than $29 million, mostly in company stock. Prince also got a "prorated bonus for 2007." Citigroup is seeking billions in new funding from investors, mainly overseas, to help it weather the subprime crisis.
O'Neal did even better, walking away from Merrill Lynch with "accumulated benefits" worth more than $161 million. Merrill Lynch has lost billions of dollars due to the subprime crisis.
Mozilo, whose company is being bought by Bank of America for $4 billion (a fraction of its market value only a year ago), "stands to get a severance package valued at more than $110 million," reported the WSJ. That's on top of $140 million in Countrywide stock that he sold off duing 2006-07. Mozilo was also paid $48 million in 2006. As the subprime crisis worsened during the last year, Countrywide stock lost more than 80 percent of its value, according to media reports.
Waxman has scheduled his panel's hearing on the subprime crisis and CEO pay packages for Feb. 7.