In a move that has skeptics wondering whether the announcement was a result of taking the moral high ground or simply a cover-up…Countrywide CEO Angelo Mozilo says he is forfeiting some $37.5 million in severance pay, fees and perks he was scheduled to receive upon his retirement as part of the proposed buyout by Bank of America.
In a statement, Countrywide said that Mozilo, however, will still retain retirement benefits and deferred compensation that he has already earned.
In addition to $36.4 million cash severance payments, Mozilo is also walking away from $400,000 per year he was to be paid under an agreement to serve as a consultant to the company following his retirement, as well as other perks including the use of a private jet. Read.
It’s only been a week or so since Stanley O’neal was forced to step down as CEO of Merrill Lynch. Today Citigroup Inc. Chairman and CEO Charles Prince also resigned and is being replaced as chairman by former Treasury Secretary Robert Rubin. Prince is the latest executive casualty of the current banking woes…his company’s billions of dollars in losses from investing in bad debt is what ultimately led to his demise. Read.
According the New York Times, Countrywide CEO Angelo Mozilo started a plan to sell tons of stock over a period just before the sub-prime markets tanked. In fact Mozilo twice raised the number of shares that could be sold: once in December 2006, when Countrywide stock was $40.50, then again in February, when it hit a high of $45.03.
Over the course of that time Mozilo made hundreds of millions from the stock sales while his company and the rest of the mortgage industry saw one of the biggest declines in history.
Of course, Mozillo didn’t have a crystal ball. I mean he didn’t know that the market was going to tank the way it did. But what he did know is that an unprecedented number of Americans were buying houses…many of whom were financing their purchases using risky interest-only and variable rate loans in order to afford them.
Now that the market is in a steep decline, Mozilo has made his millions but has also announced that he plans to lay off over 12,000 Countrywide workers.
So the question becomes, how do you classify what Mozilo did? With hindsight as our guide, was he a sell-out? Or was he a genius to have the foresight to employ smart investment strategy and see huge personal gains?
Well the treasurer of North Carolina has written the head of the SEC and asked the agency to look into the sales. “As an investor and a Countrywide shareholder, I was shocked to learn that C.E.O. Angelo Mozilo apparently manipulated his trading plans to cash in, just as the sub-prime crisis was heating up and Countrywide’s fortunes were cooling off,” Mr. Moore wrote.
How do you feel about Angelo’s move?
Today Citigroup announced that $5.9 billion in credit-related write-offs, losses, and extra costs will cut deep into third quarter profits.
The warning reinvirograted speculation about whether CEO Charles Prince would hold on to his job. Today also marked Prince’s 4th year at the helm at Citigroup. The royal one has been under intense pressure as of late to get profits up at the banking giant.
“This to me seems to be the tipping point for a change in CEO at
In the wake of massive predicted losses caused by worldwide credit woes Swiss bank UBS has decided to make some major management changes anouncing that it plans to cut 1,500 jobs in its investment bank.
The third-quarter losses of up to $685 million are mostly linked to the subprime mortgage crisis in the United States, according to a UBS statement from the bank’s Zurich headquarters on Monday.
“We will make an overall pre-tax loss at Group level for the quarter. These events have led to management changes,” UBS chief executive Marcel Rohner said.
The Investment bank’s Huw Jenkins will depart along with UBS CFO Clive Standish. Jenkins spearheaded UBS’ bid to compete with the likes of Goldman Sachs, Morgan Stanley, & Merrill Lynch as the company strived to become one of the top-five investment banks worldwide
In the words of Gospel Singer Kirk Franklin…Do you want a revolution? Whoop Whoop! Do you want a revolution? Whoop Whoop!
Former AOL Founder and CEO Steve Case unveiled a new credit card called Revolution Money this week. Case who now runs the investment firm Revolution LLC says the new credit card and a free money exchange service will compete against eBay’s PayPal.
The RevolutionCard will also feature an unusual security element: The card will not contain a customer name or account number. Opting instead for PIN-based encrypted technology.
The new RevolutionCard will carry merchant fees that are 75 percent less than traditional payment networks. If Case’s new card catches on, Visa & Mastercard will both need a revolutionary change to keep from losing market share. Read.
