CNN reports that a house oversight committee is preparing to investigate why three CEOs with ties to the mortgage crisis were paid $460 million over five years.
The panel, chaired by Rep. Henry Waxman, D-Calif., will hear testimony from Charles Prince, former CEO of Citigroup Inc.; Stanley O’Neal, former CEO of Merrill Lynch & Co.; and Angelo Mozilo., chief executive of Countrywide Financial Corp., the nation’s largest mortgage lender.
The memo states that the three companies combined lost more than $20 billion in the last two quarters of 2007, as investments related to subprime mortgages fell apart. Meanwhile, the stock of Citigroup, Merrill Lynch and Countrywide declined drastically.
“The hearing provides a lens through which to examine whether the executive compensation and severance arrangements at these companies provided appropriate incentives to protect shareholders from these losses,” the committee said.
While we don’t agree that those executives deserved such insane compensation, is it really the government’s job to decide what appropriate compensation is? Perhaps the shareholders and investors who lost money should be determining the appropriate course of action.