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Published Feb. 11, 2008

You've heard the expression "it's good enough for government work." The implication is that government workers are subpar when compared with their private sector counterparts.

Unpacked, the snide suggestion says that since people who work for government will be rewarded regardless of performance, they don't put forth exceptional effort. The corollary is that those working in the private sector have to prove their merit every day, otherwise their security and livelihoods are threatened.

But what is true in America today is that the most unaccountable worker is not the local firefighter, the U.S. passport issuer or the federal government auditor, it is the CEO. These top corporate managers receive riches beyond imagining and it doesn't matter whether they do the job or undo the corporation's fundamentals, either way, they get to be a bazillionaire upon exit.

It was big news last week when it was announced that Angelo Mozilo, the chief executive of the Countrywide Financial Corp., was voluntarily relinquishing $37.5-million in severance and consulting pay. Countrywide, the largest U.S. mortgage lender, was hit hard by the subprime mortgage meltdown and drop in housing prices. With record levels of loan defaults, its stock lost about 86 percent of its value last year and the company was rumored to be teetering on bankruptcy until the Bank of America Corp. offered a $4.1-billion takeover.

But don't cry for Mozilo or marvel at his self-sacrifice just yet. As Countrywide's customers face foreclosure in startling numbers, as its employees worry about their future job security and as its shareholders fret over their lost investments, Mozilo will still be entitled to $36.4-million in cash severance and $400,000 a year in consulting fees. Oh, and the use of a private plane - what ex-chieftain could possibly live without that!

On top of this, Mozilo reaped nearly $450-million from sales of company stock sold from April 2004 to August 2007, according to a lawsuit filed by New York state and city comptrollers and pension funds.

These captains of industry have no compunction about taking the first seat on the lifeboat as their corporate ships are going down - sinking because they ran them onto the shoals. Then they claim the remaining provisions as their own.

Let's look at the payday of some other former chief executives who are sitting pretty even as the firms they ran are not.

E. Stanley O'Neal was kicked to the curb at Merrill Lynch in October. Only days before, the firm had posted a $8.4-billion quarterly write-down due in large part to the souring of mortgage-backed securities. Yet O'Neal whistled down the road with $161-million in earned benefits and compensation.

Then there is the former chief executive at Citigroup, Charles Prince, who was let go following a loss of $64-billion in market value due to the mortgage mess. His jewel-crusted parachute reportedly was worth about $68-million, including a $12.5-million cash bonus and a car and driver for five years.

The subprime casualties aren't the only companies that award top managers jackpots even as they rack up losses. Home Depot ex-CEO Robert Nardelli walked out the door with a package worth $210-million. Under his watch the company lost market share to its rivals after Nardelli cut costs by replacing knowledgeable sales staff with cheap part-timers.

The "heads I win, tails you lose" CEO compensation model seems endemic in America's second Gilded Age.

The defenders of this system say that disgraced CEOs typically walk away with far less compensation than they would have gotten had the company soared, so there is a pay-for-performance element.

If so, it's a matter of being bestowed only 10 lifetimes' worth of riches rather than 20. Poor, poor CEO.

Really, this can't be okay even in the most laissez-faire circles. Corporate boards are willingly colluding on a raiding of corporate wealth.

If there aren't any actual laws against such avarice, at least there can be public reprobation. Rep. Henry Waxman, chairman of the Committee on Oversight and Government Reform, and one of the Hill's most effective watchdogs, is holding hearings on Feb. 28 on executive compensation and severance for CEOs involved in the mortgage crisis. He's asked Mozilo, O'Neal and Prince to testify, as well as the chairs of the compensation committees at their companies.

The invite letter tells these CEOs that they will be expected to explain how their pay package "aligns with the interests" of their shareholders in light of their company's performance.

Good luck with that.

Meanwhile we can all adopt a new phrase when extravagant remuneration is combined with incompetence: "That's CEO work for ya."