BofA to pay mortgage head more than CEO got in '07

NEW YORK (Reuters) - Bank of America Corp (BAC.N) agreed to pay David Sambol, COO of takeover target Countrywide Corp CFC.N $28 million, considerably more than its own CEO received in 2007, to lead the bank's consumer mortgage business.

The pay, which vests over three years, is 37 percent higher than the $20.4 million Bank of America Chairman and Chief Executive Kenneth Lewis was compensated in 2007 to run the second largest U.S. bank.

Bank of America disclosed the amount in a filing on Thursday with the U.S. Securities and Exchange Commission.

"To me, it meant that they really need him and that they have no one else who could handle the job," said Alan Johnson, compensation consultant at Johnson Associates, Inc. "It shows that BofA is making a serious effort to make a go of it."

Paul Sorbera a president at Alliance Consulting said: "Compensation always reflects a company's level of commitment. This deal shows BofA is very much interested in keeping CFC's business intact and maximizing and monetizing the value of the franchise."

Sambol, who is also Countrywide's president, was named in January to run the mortgage business after Charlotte, North Carolina-based Bank of America completes its purchase of the largest U.S. mortgage lender. That transaction was valued Thursday at about $4.1 billion.

According to the filing, Sambol would be entitled to a $20 million retention bonus payable in equal installments on the first and second anniversaries of the merger, which is expected to close in the third quarter.

Sambol would also receive $8 million of restricted stock, vesting in three installments on the first, second and third anniversaries of the merger, the filing shows.

Awards replace cash severance payments to which Sambol would be entitled at Calabasas, California-based Countrywide, according to the filing.

Sambol would also be entitled at Bank of America to a $500,000 annual base salary, an annual incentive award targeted at $4 million and an annual equity award targeted at 150,000 Bank of America options.

Bank of America was not immediately available for comment.

The U.S. Federal Reserve plans to hold public hearings on April 22 in Chicago and on April 28 and 29 in Los Angeles on the Countrywide takeover. The combined company would make about one in four U.S. home loans.

Some consumer groups have criticized Bank of America for not doing more to help troubled borrowers. Consumer groups, borrowers, lawyers and politicians have faulted Countrywide for lending excesses they say fueled the nation's housing crisis.

Sambol has also received criticism over his role at Countrywide. Lewis, however, has praised Countrywide for its management expertise.

Bank of America agreed to issue 0.1822 of a share for each Countrywide share. The merger values Countrywide at about $7.04 per share, based on Bank of America's closing price on Thursday of $38.64. Countrywide shares closed at $5.88.

BofA shares fell 1.48 percent to close at $38.07 a share on the New York Stock Exchange.

(Additional reporting by Steven Bertoni; Editing by Michael Urquhart/Andre Grenon)