January 14, 2008 / 10:40 PM / 10 years ago

Congress panel seeks subprime CEO testimony on pay

WASHINGTON (Reuters) - A congressional committee on Monday asked three current and former CEOs of major financial groups -- Countrywide Financial Corp CFC.N, Citigroup Inc (C.N) and Merrill Lynch & Co Inc MER.N -- to testify at a February 7 hearing about their pay and severance packages.

The House Oversight and Government Reform Committee said it was seeking testimony from the executives at companies linked to the subprime mortgage crisis “as part of its ongoing investigation into executive pay.”

The panel said it had invited Countrywide CEO Angelo Mozilo, former Citigroup CEO Charles Prince and former Merrill Lynch CEO Stanley O‘Neal to appear and answer questions.

In a letter to Mozilo, committee Chairman Henry Waxman wrote: “According to recent press reports, if Bank of America (BAC.N) completes its proposed purchase of Countrywide Financial, you stand to collect tens of millions of dollars in severance payments and other compensation.”

Waxman, a California Democrat, asked Mozilo to “be prepared to provide your perspective on this reported pay package.”

    The lawmaker said Mozilo should plan to explain how his pay aligns with shareholders’ interests and “whether this level of compensation is justified in light of your company’s recent performance and its role in the national mortgage crisis.”

    Bank of America said on Friday it had agreed to acquire Countrywide -- the largest U.S. mortgage lender and the poster child, say critics, for the subprime crisis -- for $4 billion.

    Reporting by Kevin Drawbaugh; Editing by Andre Grenon

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