A bonus for all seasons.

ANGELO Mozilo, chief executive of Countrywide Financial Corp., is a fine performer. And he is also finely paid, with just about the wackiest bonus plan I have ever encountered.

Measuring his performance between Feb. 3, 1998, the day before he became CEO of the Calabasas-based company and Oct. 22, Countrywide generated a 16.8 percent per year total return compared with a 2.8 percent return for the Standard & Poor's 500 Index. In stock price appreciation during the same period, Countrywide outperformed all but 14 percent of the companies in the S&P 500.

The 65-year-old Mozilo's pay packages have been breathtaking, considering the size of his company. From 2001 through 2003, his total pay was, respectively, $21.2 million, $15.6 million and $31.8 million.

In fairness, Countrywide's 97.4 percent total return for the year ended Dec. 31, 2003, also led the pack of similar-size lenders, surpassing No. 2 Bank of New York's return by 2.3 times. (Recent results have been less encouraging.)

The most eye-catching part of Mozilo's pay has been his annual bonus. In 2001, it was $4.7 million. The next year, it increased to $7.8 million. And in 2003, his bonus soared to $19.9 million.

Most bonuses are determined through after-the-end-of-the-year discretion on the part of a company's board compensation committee. Because sheer inertia counts for more than performance in the deliberations, bonuses under discretionary plans don't rise very fast. And they don't fall very fast either.

Not so for Mozilo. His bonus is determined by a mathematical formula. Here's the recipe, which I have applied to 2003:

Start with the EPS for 2002, $1.62. Calculate the ratio of the EPS for 2003 to that of 2002. Since the EPS figure for 2003 was $4.16, the ratio becomes 2.57.

Apply this ratio to the actual bonus for 2002, which was $7.8 million. And voila, you get a bonus for 2003 of $19.9 million. As you can infer from the formula, if the EPS figure doubles, the bonus doubles. And if the EPS figure drops in half, the bonus follow suit. What's wrong with that?

Well, we have some problems here. The first one is how to calculate the EPS ratio if the EPS in the preceding year is either zero or a negative number. In that eventuality, the ratio would be calculated, not against the preceding year, but against the first earlier year when the EPS figure was positive. Then the ratio would be applied, not to the bonus in the preceding year, which, of course, would have been zero, but to the bonus in the first earlier year when a bonus was paid.

The only way Mozilo zeroes out on his bonus is if the EPS figure drops to zero. But surely, he should zero out substantially before that. In my book, anything less than $1 a share should result in no bonus. Though in Mozilo's case, the bonus is still a quite-hefty $4.8 million.

Even worse, suppose that Countrywide continues to earn the same $4.16 a share in future years as it did in 2003. In that case, even though there had been no growth in the company's profitability, Mozilo would continue to pull down a bonus of $19.8 million a year.

Mozilo is the only executive listed in the proxy who has this mathematical formula. Given that he is 65 and that his latest employment agreement expires in 2006, the company should retire his jersey--and his bonus plan.