Pension Plan Wants Countrywide CEO Out

Discussion in 'Wall St. News' started by THE-BEAKER, Oct 22, 2007.

  1. said it before and will say it again.

    this guy is history.

    Pension Plan Wants Countrywide CEO Out
    Saturday October 20, 6:21 pm ET
    Pension Plan Asks Board of Mortgage Lender Countrywide to Replace Chairman and CEO Mozilo

    LOS ANGELES (AP) -- A pension plan that owns shares of Countrywide Financial Corp. has asked the mortgage lender's board to oust Chairman and CEO Angelo Mozilo amid criticism of the company's management and a sharp decline this year in its stock price.

    The Washington D.C.-based American Federation of State, County and Municipal Employees, which counts 1.4 million members, asked the board to replace Mozilo with two independent directors to the board in a six-page letter sent late Thursday.

    In its letter, the union-affiliated pension plan called on the Calabasas-based company to also replace its executive compensation committee with people who have not played a role in the committee's actions.

    "Adding new independent directors is a way for stockholders to change an atmosphere that allows a dominant dual-role chairman and CEO to operate without appropriate checks and balances," Gerald W. McEntee, president of the union and chairman of its pension plan, wrote in the letter.

    A call to Countrywide on Saturday was not immediately returned.

    The pension plan's letter is the latest critical volley lobbed at the company and Mozilo in recent weeks by shareholders, many of whom are unhappy over the decline in Countrywide's stock price.

    The company has been the target of shareholder lawsuits claiming it has misrepresented its financial condition. Mozilo is also being scrutinized by federal securities regulators as they examine his own sales of the company's stock.

    Last week, North Carolina's state treasurer asked the Securities and Exchange Commission to investigate Mozilo's stock sales, raising questions about changes made to Mozilo's plan in the months before the company's stock plunged. The plan changes allowed Mozilo to significantly increase his sales of Countrywide shares.

    The plans, which stipulate the number of shares to be sold by an executive, are meant to protect against accusations of insider trading.

    Countrywide shares have lost more than 50 percent since January as the mortgage lender, the nation's largest by volume, has struggled through a severe housing slump and financial woes caused by the spike in home loan defaults and foreclosures.

    The company disclosed Tuesday that it expects to book a pretax charge of $125 million to $150 million stemming from its plan to slash thousands of jobs amid rising mortgage defaults and foreclosures. Countrywide announced in early September that it would cut as many as 12,000 jobs, or about 20 percent of its work force.

    Shares of Countrywide fell $1.28, or nearly 8 percent, to $15.23 on Friday.