An Early Rite of Spring?
As you read this, the House oversight committee is attempting to hold a hearing on two highly contentious corporate governance issues — who is responsible for the escalating salaries of CEO’s and CEO’s who made out like bandits during the subprime mortgage crisis.
A committee memorandum issued last night made clear that much of the ire this morning will be directed at Angelo Mozilo, chairman of Countrywide Financial Corp. Countrywide used to be the top mortgage lender in the country, but it collapsed when the housing market did. Bank of America is now buying it out.
It turns out that, back in 2004, Countrywide hired a compensation consultant that said Mozilo’s average annual haul of $25 million was not in the company’s best interest. So Mozilo hired another person to tell him how much he should make. That consultant said the same thing, so Mozilo then hired yet a third consultant that said Mozilo was truly earning his annual compensation.
In the memorandum, Mozilo is quoted as saying the money was not about the money but “the respect and acknowledgment for my accomplishments.”
Now, in the Rayburn House office building, committee Democrats are grilling Mozilo and committee Republicans are calling the whole thing a show trail.
“This is a sanctimonious search for scapegoats,” said top committee Republican Tom Davis (R-Va.). “It’s like an island tribe sacrificing a virgin to the volcano.”