A Congressional committee scrutinized the outsized pay packages of Stanley O'Neal, Charles Prince and Angelo Mozilo and the chairman of their compensation committees against the backdrop of the mortgage crisis. Minorities seen as subprime target More Videos

NEW YORK (CNNMoney.com) -- A trio of high-profile CEOs defended their oversized pay packages to Congress on Friday, even as their companies and shareholders lost billions of dollars as a result of the ongoing mortgage crisis.

Countrywide Financial's (CFC, Fortune 500) founder and CEO Angelo Mozilo, former Merrill Lynch (MER, Fortune 500) Chairman and CEO Stanley O'Neal and ex-Citigroup (C, Fortune 500) chief Charles Prince testified before the House Committee on Government and Oversight Reform, calling reports of their pay "grossly exaggerated" in some instances and pointing out that they lost millions as well.

Their remarks found little sympathy however, as a number of lawmakers chastised the execs for helping to foster the current mortgage crisis at a time when homeowners are at risk of losing their homes and as the country teeters on the brink of recession.

"If you don't bear personal responsibility, I don't know who does," said Rep. Elijah Cummings, D-Md.

All three executives made headlines in the past year for their lofty compensation after their companies lost billions in the U.S. housing market.

Between 2002 and the close of 2006, the three executives were paid $460 million, according to a report issued by the Congressional committee just a day earlier.

Mozilo, who grew Countrywide from its modest beginnings into the nation's largest mortgage lender, reportedly stood to collect a windfall of $115 million after his firm agreed to a yet-to-be completed sale to Bank of America (BAC, Fortune 500). After facing heavy criticism from lawmakers, Mozilo forfeited $37.5 million in payments tied to the deal.

In his testimony, Mozilo called reports of his pay package "grossly exaggerated."

Upon his departure from Citigroup in November, Prince left with approximately $68 million, while O'Neal collected about $161 million after he stepped down in October.

Defending lofty pay packages

Both men contended that their compensation was in line with pay scales in the broader financial services industry and that reports about their pay packages were "inaccurate."

Their compensation was tied directly to the performance of the company, via stock and options that the executives have held over time. Prince, O'Neal and Mozilo argued that their pay was buoyed by impressive profits the companies delivered in the years leading up to the mortgage crisis. They also said that they have lost millions since as their companies have seen the price of their stock plummet in recent months.

In all three instances, the terms of their pay packages were determined independently by members of their respective board of directors who commonly rely on handsome pay packages to attractive and retain top talent.

But also in focus were the cozy relationships between the directors responsible for determining pay and compensation consultants who get hired by directors to advise on executive pay, which was the centerpiece of an earlier hearing sponsored by the committee in December. Lawmakers have argued that these consultants are merely getting paid to tell the board and CEO what it wants to hear.

One remedy proposed Thursday by Nell Minow, editor and co-founder of the corporate governance research group The Corporate Library, was to give shareholders greater rights in determining members of the board or creating an indexing system where pay would adjust based on the company's performance in relation to its peers.

Minow argued that hefty pay packages for CEOs are sensible, but only when they generate such returns for shareholders.

"We want CEOs to be paid hundreds of millions of dollars," Minow told lawmakers. "But there is no excuse for people getting so much for doing so little."

Rep. Henry Waxman D-Calif., who heads the committee and was one of the CEOs staunchest critics, offered similar sentiment during his opening remarks.

"The obvious question is how can a few execs do so well when their companies are doing so poorly?" asked Waxman, D-Calif.

Pay in focus

Even though Prince, O'Neal and Mozilo garnered plenty of attention on Capitol Hill Friday, they are not the first, nor will they be the last, top execs to enjoy handsome pay packages.

In December, Goldman Sachs (GS, Fortune 500) Chairman and CEO Lloyd Blankfein took home nearly $68 million in restricted stock, options and cash, making it the largest bonus ever given to a Wall Street CEO.

Chrysler Chairman and CEO Robert Nardelli made headlines when he was forced out of Home Depot (HD, Fortune 500) in January of last year and left with $210 million in cash, stock options and retirement benefits.

Excessive compensation and hefty severance packages or "golden parachutes" have been burning issues in recent years. Many companies have rewarded CEOs handsomely through multi-million dollar salaries, eye-popping bonuses or attractive perks like country club memberships.

Executive pay has drastically outpaced the pay gains experienced by the average American worker, according to an annual study published in August by The Institute for Policy Studies and United for a Fair Economy.

Between 1996 and 2006, CEO pay rose 45%, at a time when the average pay for an American worker grew just 7%.

That same study revealed that CEOs at 386 of the Fortune 500 companies took home $10.8 million in total compensation in 2006, more than 364 times what the average worker earned that same year.

Friday's hearing marks the second time in nearly three months that legislators have attempted to tackle the issue of executive compensation.

Friday's hearing was originally scheduled for Feb. 7, but was postponed twice - once due to scheduling conflicts and again last week following the death of Mozilo's mother.