H&R Block CEO Mark Ernst resigned today, the latest casualty of the mortgage industry meltdown that’s already claimed Citigroup’s Charles Prince and Merril Lynch’s Stanley O’Neal. How many more CEO heads will roll?
According to a recent report by the Corporate Library, a corporate governance research outfit, it may be cheaper to keep her as the old song goes. The Corporate Library estimated that severance packages at the top sixteen firms in the mortgage market—everyone from Fannie Mae to Morgan Stanely—totals nearly $1.1 billion. The top spot belongs to Lehman Bros. ceo Richard Fuld who could pocket $300 million if canned.
What about Angelo Mozilo, the embattled head of Countrywide? Always well paid, he stands to earn $73 million, twice the average of his peers. If there’s one consolation for folks who think ceos are greedy capitalist pigs, the Corporate Library estimates that the sweet sixteen would have made $360 million more if they’d all been fired at the end of last year. Why the drop in booty? Their stock prices have collapsed.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.