A pension fund group has demanded that Harley Snyder resign as Countrywide Financial Corp's lead director and compensation committee chairman, saying he lacks the independence to make the largest U.S. mortgage lender's board accountable to shareholders.
CtW Investment Group, which is affiliated with seven labor unions, in a November 7 letter to Snyder criticized him for letting Chief Executive Angelo Mozilo and other executives reap hefty pay packages and gains from stock options.
It also faulted Snyder for last week extending stock option expiration dates for eight senior executives, including Chief Legal Officer Sandor Samuels, reducing the chance the options would be worthless. CtW said Snyder also netted $7.2 million from selling three-fourths of his own Countrywide shares since the beginning of 2006, before the U.S. housing market slumped.
Your excessive compensation, together with your aggressive divestment of your own Countrywide stock at the peak of the housing bubble, militates powerfully against any inclination you might have to lead your fellow independent directors or hold Mr. Mozilo accountable, CtW Executive Director William Patterson wrote in the letter to Snyder.
CtW last month demanded Mozilo's resignation. Neither Mozilo nor Chief Operating Officer David Sambol was among the executives granted new option expiration dates.
Countrywide, based in Calabasas, California, could not immediately be reached for comment.
Shares of Countrywide have fallen 68 percent this year, hurt by mounting delinquencies and defaults among borrowers and losses on loans that have already been made.
It is cutting as many as 12,000 jobs, and has shifted its loan mix to focus on smaller, safer loans. Despite a $1.2 billion third-quarter loss, Mozilo on October 26 said Countrywide has a much better chance of success than other mortgage industry participants.
The U.S. Securities and Exchange Commission is examining Mozilo's own stock sales.
Countrywide shares closed Wednesday at $13.63 on the New York Stock Exchange. They began the year at $42.45.
(Reporting by Jonathan Stempel; Editing by Steve Orlofsky, John Wallace)