Subprime CEOs Explain Why They Made Millions While Americans Lost Homes

Prince and O'Neal both spoke about the difficulties they overcame to become some of the top executives in corporate America.

Prince, who was the first in his family to go to college, said he is "extremely grateful for the opportunities Citigroup gave me."

O'Neal said: "Whatever I have achieved in life has been the result of the unique combination of luck, hard work and opportunity that can only exist in this country. My grandfather, James O'Neal, was born into slavery in 1861. He was eventually able to carve out a life for himself and his family through hard work and perseverance."

They Made Millions

In just a five-year period, these three CEOs received more than $460 million in compensation.

And as two have stepped down — with the third planning to do so soon — because of the subprime crisis, the three CEOs have and stand to take in even more money.

This comes as the three companies recorded dramatic losses in the second half of 2007.

Countrywide lost $1.6 billion, Merrill Lynch lost $10.3 billion and Citigroup lost $9.8 billion.

When O'Neal left Merrill Lynch in October 2007, he was given a retirement package worth $161 million.

The largest component of his retirement package was $131 million in unvested stock and options. Staff for Waxman, the committee's Democratic chairman, noted that if the Merrill Lynch board had terminated O'Neal for cause he would have forfeited these stock and options because they had not yet vested.

"It is unclear why this decision was in the interests of Merrill Lynch shareholders," Waxman's staff wrote.

When Prince left Citigroup in November 2007, he received a cash bonus worth $10.4 million. The board also allowed him to retain more than $28 million in unvested restricted stock and stock options.

Mozilo also stands to make millions if Bank of America's proposed $4 billion acquisition of his company goes through.

Facing mounting public opposition, Mozilo has already said that he would give up $37.5 million of severance pay, fees and benefits linked to his expected departure after the Bank of America deal closes. He also gave up some other benefits, such as use of the company's aircraft.

"I voluntarily gave up these benefits because I did not want this issue to detract from, or in any way to impede, the important task of completing the Bank of America transaction," Mozilo said.

But he still won't leave empty-handed. Separate from his severance package, Mozilo will still keep various retirement benefits and deferred compensation already earned. Those add up to about $44 million.

He has also sold millions of dollars in stock options as his company started to face financial troubles.

The Boards Approved the Pay

All three CEOs spoke about how it was their company boards that approved their pay packages. They also all noted that their companies are now working to assist homeowners facing foreclosure.

"Executive compensation levels, particularly in the financial services industry, are driven by a highly competitive market to attract and retain talent," said Richard D. Parsons, who heads Citigroup's compensation committee and is also chairman of the board of Time Warner. "The competition for talent is especially important for a company with the scale and scope of Citi."

Harley Snyder, chairman of Countrywide's compensation committee, noted that his board was advised by compensation consultants every time it changed Mozilo's salary.

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