The fat pay packages of three CEOs whose companies are being hammered by the widening mortgage crisis came under criticism at a US congressional hearing on executive pay. In the last two quarters of 2007 alone, the three executives’ firms lost more than $20 billion on investments in subprime and other risky mortgages, said the House of Representatives Oversight and Government Operations Committee.Yet the three took home fortunes in 2007 — $120 million for Countrywide Financial Corp CEO Angelo Mozilo, a $161 million retirement package for ex-Merrill Lynch CEO Stanley O'Neal, and $39.5 million in stock, options, bonus and perks for former Citigroup CEO Charles Prince. “The mortgage crisis is having enormous repercussions. Families are losing their homes. thousands are losing their jobs. It seems like everybody is hurting, except for the CEOs who had the most responsibility,” said California Representative Henry Waxman, the committee chairman.In a hearing room packed with bank lobbyists and lawyers, Waxman said, “I have no problem with paying for success. But it looks like when you’re a CEO you get paid for failure.” Mozilo, O’Neal and Prince told Waxman’s panel that they earned their compensation. They conceded misjudgments in the subprime debacle, while one lawmaker blasted the hearing as “a sanctimonious search for scapegoats”.Virginia Representative Tom Davis said, “Punishing individual corporate executives with public floggings like this may be a politically satisfying ritual — like an island tribe sacrificing a virgin to a grumbling volcano. “But in the end, it won’t answer the questions. about corporate responsibility and economic stability.” The hearing marked US Congress’ latest foray into one of America’s most enduring controversies — sky-rocketing CEO compensations.US CEOs earn 600 times the average US worker, up from just 40 times in 1980. With companies headed into the spring annual meeting season when they disclose managers’ compensation, the winnings of some financial executives are contrasting starkly with heavy losses at many firms as a historic home price bubble deflates.
