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Countrywide CEO Angelo Mozilo dumps $138 million in stocks; shareholders stock value shrinks

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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 03:57 PM
Original message
Countrywide CEO Angelo Mozilo dumps $138 million in stocks; shareholders stock value shrinks
Countrywide CEO sold big as stock dropped

Quick changes in Mozilo's trading plan raise red flags, experts say. The mortgage firm says the sales were in line with company policy.

By Kathy M. Kristof, Los Angeles Times Staff Writer
September 29, 2007
http://www.latimes.com/news/la-fi-mozilo29sep29,0,6718989.story?coll=la-tot-topstories&track=ntottext

As the mortgage industry swooned in late 2006 and 2007, Countrywide Financial Corp. Chief Executive Angelo Mozilo cashed in stock options valued at $138 million -- vastly expanding his wealth even as his shareholders watched their stock shrink in value.

<<snip>>

But most executives adopt a plan and stick with it, compensation and securities experts say. Mozilo didn't.

Instead, he shifted course twice in late 2006 and early 2007, according to regulatory filings, amid mounting signs of trouble in the housing and mortgage industries. Mozilo adopted a new trading plan, added a second and then revised it, allowing him to unload hundreds of thousands of additional shares before Countrywide stock went into a tailspin.

<<snip>>

Compensation experts who reviewed Mozilo's trading activity, however, said the changes he made could prove to be a liability as Mozilo and Countrywide defend themselves against shareholder suits.

<<snip>>

Six days later, on Dec. 12, Mozilo filed a new stock trading plan, Samuels said. Mozilo and Countrywide declined to provide copies of this or his other trading plans, but the company confirmed that the Dec. 12 plan allowed Mozilo to sell an additional 115,000 shares each month.

<<snip>>

On Feb. 2, Mozilo revised the trading plan he had adopted less than two months earlier, doubling the number of additional shares Mozilo was authorized to sell under his second plan to 230,000 a month. Between the two plans now in effect, Mozilo could sell 580,000 shares each month.

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acmavm Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 04:00 PM
Response to Original message
1. And? Is this not the 'American way' nowdays? The rich get richer by
using insider info and the stockholders lose their investments?

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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 04:03 PM
Response to Reply #1
2. Unfortunately, it is n/t
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whistle Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 04:06 PM
Response to Original message
3. An insider who knows what to do and when to do it
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 04:12 PM
Response to Reply #3
6. Numerous times n/t
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BlooInBloo Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 04:09 PM
Response to Original message
4. Yup. A year ago. Genius.
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L. Coyote Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 04:11 PM
Response to Original message
5. Close to a record, but not. = "Tenet Healthcare CEO Jeffrey Barbakow, $143 million..."
from: CEOs' fat checks "Tenet Healthcare CEO Jeffrey Barbakow, $143 million..."
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=853813&mesg_id=855921

======================
CEOs' fat checks "Tenet Healthcare CEO Jeffrey Barbakow, $143 million..."

CEOs' fat checks belie troubled times
By Gary Strauss, USA TODAY
http://www.usatoday.com/money/companies/management/2002-09-30-cover-cms.htm

Stock prices may still be down, but CEO pay continues to rise.

If early 2002 proxy statements are a barometer, the disconnect between executive compensation and performance remains wide. While average worker salaries are rising just 3.6%, many CEOs are getting double-digit salary increases, fat bonuses, large stock option grants and lavish perks more reminiscent of the bull market 1990s .....

...Among 2002 compensation packages:

* Procter & Gamble CEO Alan Lafley, $87.8 million. ...
* Symantec CEO John Thompson, $66.2 million. ....
* General Mills CEO Steve Sanger, $62.8 million. ...
* Tenet Healthcare CEO Jeffrey Barbakow, $143 million. Barbakow gained $111 million exercising stock options, and he received fresh options worth up to $26.4 million. "This was his first stock option exercise since he became CEO in 1993," says Tenet spokesman Harry Anderson....
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-01-07 11:10 AM
Response to Reply #5
12. And they're using this in his defense...
"This was his first stock option exercise since he became CEO in 1993"

AMAZING!!
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snappyturtle Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 05:02 PM
Response to Original message
7. Enron? nt
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blondeatlast Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 05:15 PM
Response to Reply #7
9. What's that they say about great minds? nt
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snappyturtle Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 05:18 PM
Response to Reply #9
10. Great!
:applause:
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MasonJar Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 05:05 PM
Response to Original message
8. I hope he got fired. What a despicable act. Bush did the same thing
when his dad was either VP or P.
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-30-07 08:00 PM
Response to Reply #8
11. His co. says he did nothing wrong n/t
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