Congress to grill Mozilo, O'Neal, Prince over pay
High-profile execs head to Capitol Hill to defend pay packages amid mortgage crisis.
NEW YORK (CNNMoney.com) -- Two high-profile former Wall Street CEOs and the head of the nation's largest home lender will testify Friday before a congressional committee examining the link between executive pay and the mortgage crisis.
A total of 10 witnesses are due to appear before the House Committee on Oversight and Government Reform, including Countrywide Financial's (CFC, Fortune 500) founder and CEO Angelo Mozilo, former Merrill Lynch (MER, Fortune 500) Chairman and CEO Stanley O'Neal and ex-Citigroup (C, Fortune 500) chief Charles Prince.
The hearing was originally scheduled for Feb. 7, but was postponed due to scheduling conflicts.
All three executives made headlines last year for their companies' bad bets on the U.S. housing market - and for their own lofty compensation. Their pay is drawing scrutiny from lawmakers at a time when homeowners across the country are at risk of losing their homes and as the country teeters on the brink of recession.
Upon his departure from Citigroup in November, Prince left with approximately $68 million, while O'Neal collected about $161 million after he stepped down in October.
Both Citigroup and Merrill Lynch reported billions of dollars in losses on risky investments in mortgage-backed securities.
Countrywide's Mozilo reportedly stood to collect a windfall of $115 million dollars after his firm agreed in January to a yet-to-be completed $4 billion sale to Bank of America (BAC, Fortune 500). But after facing heavy criticism from lawmakers, Mozilo said he would forfeit $37.5 million in payments tied to the deal.
Calls made to Merrill Lynch and Countrywide Financial seeking comment were not immediately returned.
A Citigroup spokesman declined to comment specifically on next week's hearing but said the company was cooperating with the committee.
Pay in play
Friday's meeting marks the second time in nearly three months that legislators have attempted to tackle the issue of executive compensation.
In December, the same congressional panel, chaired by Rep. Henry Waxman, D-Calif., heard from experts about another hot issue in executive pay: Are compensation consultants who get hired by directors to advise on executive pay conflicted?
This time around lawmakers are expected to take a closer look at how the compensation and severance packages of Mozilo, O'Neal and Prince were set and approved by their respective boards.
Waxman's committee will also hear from corporate directors who signed off on their pay packages.
Due to testify is Richard Parsons, chair of Citigroup's compensation committee and former CEO of Time Warner (TWX, Fortune 500), the parent company of CNNMoney.com. The chairmen of Countrywide and Merrill Lynch's compensation committees are also scheduled to address the committee.
In mid-January, the committee sent letters to John Thain, current chairman and CEO of Merrill Lynch, and Citigroup chief Vikram Pandit requesting documents related to Prince and O'Neal's pay compensation packages.
What color is your parachute?
Excessive compensation and hefty severance packages or "golden parachutes" have been burning issues in recent years. Many companies have rewarded CEOs handsomely through multi-million dollar salaries, eye-popping bonuses or attractive perks like country club memberships.
Even though Prince, O'Neal and Mozilo will garner plenty of attention on Capitol Hill Friday, they are not the first, nor will they be the last, top execs to enjoy handsome pay packages.
In December, Goldman Sachs (GS, Fortune 500) Chairman and CEO Lloyd Blankfein took home nearly $68 million in restricted stock, options and cash, making it the largest bonus ever given to a Wall Street CEO.
And current Chrysler Chairman and CEO Robert Nardelli made headlines when he was forced out of Home Depot in January of last year and left with $210 million in cash, stock options and retirement benefits.