BofA to pay mortgage head more than CEO got in 2007
|
|
|
By Jonathan StempelNEW YORK (Reuters) - Bank of America Corp agreed to pay David Sambol, COO of takeover target Countrywide Corp $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)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
Wall Street stocks gain on optimism for US economy
New York - US stocks rose Wednesday after three separate reports offered signs that the US recovery is gaining steam. Consumer spending and new home sales rose more than expected in October, while weekly jobless claims dropped to their lowest rate si...
Washington Post shutters all US bureaus outside capital - Summary
Washington - The Washington Post will close its remaining domestic bureaus outside the US capital, the paper said Wednesday, in an attempt to cut costs in the prevailing economic climate. The daily said it would close bureaus in New York, Chicago and...
Washington Post shutters its remaining bureaus outside US capital
Washington - The Washington Post will close its remaining bureaus outside the US capital, the paper said Wednesday, in an attempt to cut costs in the prevailing economic climate. The daily said it would close bureaus in New York, Chicago and Los Ange...
FDIC: 'Problem' banks at 16-year high in US
Washington - The number of US banks in danger of collapse has risen to the highest level in 16 years, a government regulator reported Tuesday in a sign that the country's worst financial crisis in decades is still lingering. The Federal Deposit Insur...
American shoppers lace up racing shoes for Black Friday
Los Angeles - Up to 134 million Americans are expected to splash out with their cash when the holiday shopping season kicks off on traditional Black Friday. The National Retail Federation Tuesday said it anticipated that the easing recession will sen...
US stocks edge lower on revised growth figures
New York - US stocks fell slightly on Tuesday as government figures showed that last quarter's economic rebound was smaller than initially thought. The Commerce Department in an updated estimate said the economy grew at an annual rate of 2.8 per cent...
US economic rebound smaller than thought; Fed optimistic - Summary
Washington - The US economy's rebound from a deep recession was smaller than initially thought, according to new government figures Tuesday, while the Federal Reserve said it expects the country's recovery to pick up...
|
|
|
|
|
|
|
|
