Three of Wall Street's best-paid bankers, whose institutions have been at the heart of the sub-prime lending crisis, will face a grilling from a congressional committee today over their sky high executive salaries.

The House Oversight and Government Reform Committee will question former chief executives of Merrill Lynch and Citigroup, Stanley O'Neal and Charles Prince, who were both forced to resign when their banks revealed heavy losses caused by exposure to sub-prime loans.

Angelo Mozilo, chief executive of Countrywide Financial, is also expected to testify before the committee, which is chaired by congressman Henry Waxman.

The California Democrat is expected to focus on the executives' large pay packages, after a report published by the committee yesterday revealed that the executives earned hundreds of millions through their salary, pensions and share sales last year, despite their institutions losing a combined $20 billion (£9.9 billion) in the second half of 2007.

Mr Waxman's staff have examined SEC filings and internal documents to track the pay of the three executives. Yesterday's report revealed that Mr Mozilo, the founder of Countrywide Financial, received more than $120 million in compensation and share sales last year.

Mr O’Neal left Merrill Lynch in October with $161.5 million in shares, options and retirement benefits, after leaving the brokerage with its biggest-ever quarterly loss and Mr Prince left Citigroup last autumn with a $10 million bonus, $28 million in stock and options and $1.5 million in other perks.

Mr Waxman is expected to focus on the Citigroup chief's $10 million bonus and to say he did not have a “contractual entitlement” to it when he stepped down as CEO because he did not have an employment contract with the bank.

The politicians are also expected to question the terms of Mr O’Neal’s $161 million retirement package, of which $131 million was in unvested stock and options. It was granted despite the fact that Mr O'Neal was forced out of the world's biggest brokerage after it reported the largest quarterly loss in its 94-year history.

Investors are becoming increasingly concerned about the stark contrast between the poor performance of many financial firms and the hefty rewards given to senior managers.

"There is a major disconnect between the pain being suffered by average investors and the huge bonuses being enjoyed by the investment bankers,” said Barbara Roper, director of investor protection at the Consumer Federation of America.

However, the leading Republican of the Committee, Tom Davis, of Virginia, is expected to defend the exceutive pay packages. Last night he said in a statement: “Markets correct themselves, and we need to let that process proceed. Directors and shareholders already have begun to work to correct the problems.”

Mr Prince resigned from Citigroup in November as the largest US bank warned it would write off billions of dollars in sub-prime mortgage-related losses. Mr Prince's severance package was worth $40 million and included more than $28 million in unvested restricted shares and share options

Despite leaving the bank, Mr Prince is allowed to use an office, an administrative assistant and a car and driver for five years in a package of perks that is worth more than $1.5 million a year.

Citigroup’s shares have fallen to a nine-year low this week on continuing concerns over its exposure to bad loans.

Mr Mozilo will be quizzed about the discrepancy between his pay and Countrywide’s performance. In 2007, Countrywide, the largest US mortgage lender, announced significant losses and saw an 80 per cent drop in its stock price.

In 2007, Mr Mozilo was paid $1.9 million in salary, received $20 million in stock awards based upon performance and sold millions of dollars worth of stock.

The Committee's report says: “Mozilo stands out as the only CEO who sold large numbers of shares in his company” while the company itself was buying back stock. The report also quoted from an October 2006 e-mail message Mr Mozilo sent to Countrywide’s compensation consultant that slammed board members who have been “under enormous pressure by the left- wing antibusiness press and the envious leaders of unions” to limit compensation for top executives.

In the e-mail, Mr Mozilo argued that “a decade from now there will be a recognition that entrepreneurship has been driven out of the public (corporate) sector resulting in underperforming companies.”

Mr Mozillo clinched a deal to sell Countrywide, the nation’s biggest mortgage lender, for $4.1 billion earlier this year. The sale value represented a steep decline from the company’s value last year. The Countrywide Financial founder's stock sales are also the subject of an informal investigation by the SEC.

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