Countrywide NYSE: CFC) chief operating officer David Sambol cannot get a job as a garbage man. He is viewed as being too closely tied to policies whereby his company made subprime mortgage loans to people who, in many cases, could not repay them. That helped lead the current default crisis.
While Sambol should be drawn and quartered, he is, instead, getting a $28 million pay package to run Countrywide once it has been taken over by Bank of America NYSE: BAC). As Reuters points out "The amount, which vests over three years, is 37 percent higher than the $20.4 million that Bank of America Chairman and Chief Executive Kenneth Lewis was compensated in 2007 to run the second-largest U.S. bank."
The move is extremely bad judgment on the part of Bank of America’s management. There are other people, including its own mortgage executives, who could probably do the job just as well. Keeping Sambol is a signal that what went on at Countrywide was OK. By almost all accounts, it was not.
Perhaps the bank wants someone close to Countrywide to clean up the mess there. What that is worth is anyone’s guess. The government is not done looking into the mortgage-lender’s practices and Sambol may not make it out of that woods. There is always that hope.
Douglas A. McIntyre