Corporate governance research group the Corporate Library said Friday that Countrywide Financial Corp. needs to fix its "poorly designed" executive compensation and questioned the decision-making ability of the company's directors.


The Portland, Maine-based organization said it has been complaining about Mozilo's pay for more than three years, well before the housing slump and the liquidity troubles that now haunt the Calabasas-based lender.


Mozilo signed a contract earlier this year that reduced his annual salary to $1.9 million and maximum bonus to $10 million under pressure from investors and executive compensation watchdog groups. Mozilo was paid about $43 million last year.


The Corporate Library said that Countrywide now links more of Mozilo's pay to performance but is awarding him perks and is upping his pay in other ways.


"Any board which can make such poor decisions about a CEO's compensation package is almost certain to be making poor decisions elsewhere," wrote Ric Marshall and Paul Hodgson, both analysts with the Corporate Library.


"Countrywide's executive compensation agreements are strongly tied to the company's performance, including stock and earnings results," Countrywide said in an e-mailed statement, according to a Reuters story Friday.

The statement continued, "The board of directors has established a pay-for-performance model that assures alignment of executive strategies with the shareholders' interests. (Mozilo's) personal wealth remains centered in Countrywide, further aligning him with the interest of all shareholders."

Mozilo has received about $387 million in pay and stock option gains from 2002 to 2006, regulatory filings show.

Shareholders of Countrywide in June rejected a proposal that would have given them a nonbinding say on compensation for top executives. The measure attracted 32 percent of the voting shares, with nearly 60 percent against the proposal.


Shares in Countrywide were up 1.1 percent, or 70 cents, in afternoon trading Friday on the New York Stock Exchange.

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