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Countrywide Shareholders Look to Lower Executive Compensation

A proposal to cut out-of-control executive compensations was introduced by shareholders at Countrywide'ss annual meeting this month.



The proposal, led by the AFSCME Employees Pension Plan, will offer shareholders an annual advisory vote on the board'ss executive compensation report. The purpose of the proposal is to stop the Financial CEO and Chairman of Countrywide Angelo Mozilo from receiving what many shareholders believe to be an excessive compensation package.



Similar proposals have been put to vote at U.S. Bancorp, Merrill Lynch and Home Depot. Mozilo has a position on the board at Home Depot. The proposal at the Home Depot meeting gained more than 40% of the vote.



Mozilo made over $160 million last year at Countrywide. His current contract guarantees him $200,000 in annual raises and multi-million dollar pay bonuses no matter how the company performs.



Mozilo was awarded 1.4 million in new annual stock options in 2005. His base salary was raised to $2.7 million. He was given $149,794 for the personal use of the company jet, $40,282 for country club fees and $29,750 for tax and investment advice.



Only 43% of voters supported the resolution at the Countrywide meeting, leaving it unpassed. However, most new shareholder proposals fail to even reach the 20% level.



The more investors learn about the proposal the more momentum gets generated behind it, said Richard Ferlauto, director of pension and benefit policy for AFSCME.



Countrywide has a very large base of institutional investors who are concerned about runaway pay and Mozilo'ss gargantuan pay package -- even given the company'ss good performance -- drew the attention of many shareholders.



Countrywide defends Mozilo'ss pay, noting that the company'ss earnings have expanded over the last five years by 48%. The company released a statement indicating that the board alone should decide executive pay, because it has the knowledge to do so.



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