WaMu's Shareholders Meeting Not a Snoozer
Business Week scores yesterday's WaMu shareholders meeting, "activists three, bank zero." The Seattle Times settles for "contentious," while the P-I has this leading question for CEO Kerry Killinger from Lee Lannoye, a shareholder and former WaMu executive vice president: "You have destroyed the company--why are you not being held accountable?" MSN Money captures the executive team in action at Benaroya Hall like so:
"I just want people to calm down and have a little faith," said CEO Kerry Killinger at the company's annual shareholder meeting late Tuesday. "We will get through this."
Well, everyone except director and finance committee chair Mary Pugh, criticized in a lively fashion for her (mis)management of WaMu's risk exposure to subprime lending; she resigned. She was the squeakiest squeaker in the reelection results: 50.04% to 49.96%. Board directors James Stever, Margaret McQuade, Charles Lillis, and Stephen Frank all had substantial support withheld, around 40% in each case.
Stever, who leads the compensation committee, apparently thought it was okay to leave out mortgage-related losses when calculating the performance for executive bonuses. (WaMu just announced it's writing down $1.14 billion in bad loans this quarter.) Shareholders and most everyone else not receiving an executive bonus disagreed. Now WaMu has reversed that innovative "heads I win, tails you lose" bonus strategy.
Shareholders also voted that the Board Chairman and CEO posts, both of which Kerry Killinger has been filling with mixed results recently, should be split between two people. At least some shareholders thought that Killinger should be neither, according to the P-I. Shareholder Alan Henry questioned whether job security led Killinger chose TPG's investment offer over a rumored buy-out from JPMorgan Chase. For around $7 billion TPG has gained a 50% ownership in WaMu, at a stock price of $8.75, a discount of 33% off WaMu's trading price at the time. But then, Chief Financial Officer Thomas Casey is quoted as saying that WaMu's "best guess" is that total write-offs over the next three to four years could amount to $12 billion to $19 billion. Gruesome.
