Posted on 03/05/2008 9:44:37 PM PST by Attention Surplus Disorder
NEW YORK (Reuters) - Washington Mutual Inc's board of directors approved a plan which helps protect its management's bonus targets from the impact of the subprime loan fallout, according to a filing with U.S. regulators.
The board's human resources committee on February 26 approved bonus targets, some of which will be calculated to exclude expenses related to business re-sizing or restructuring, foreclosed real estate assets and loan loss provisions other than related to its credit card business.
The filing, made with the Securities and Exchange Commission on Monday, refers to targets for WaMu chief executive Kerry Killinger, chief financial officer Thomas Casey, chief operating officer Stephen Rotella, and retail banking chief James Corcoran.
The board's committee said in light of the challenging business environment and the need to evaluate performance across a wide range of factors it will take a three-step approach to rewarding its executives including subjectively evaluating company performance in credit risk management.
In January, Seattle-based Washington Mutual said it awarded Killinger 3.2 million stock options for 2008 to provide a "strong incentive to restore shareholder value".
WaMu's share price sank 70 percent in 2007 as mortgage losses soared.
WaMu is one of the big players in the thrift lenders industry which suffered a record $5.4 billion loss in the fourth quarter of 2007 as the housing market deteriorated.
(Reporting by Yinka Adegoke; editing by Rory Channing)
It’s crap like this that really pisses people off.
Yes, let’s all light torches, pick up pitch forks and march on their homes...
When Obama/Hillary gets elected and the regulators comes down on these clowns like a load of bricks, they’ll have nobody to blame but themselves. All the good, reasoned arguments about keeping government’s hands off business go right out the window in the face of this stuff.
WaMu might not even exist by that point.
There are many, many crosscurrents going on in the financial sphere, and I don’t mean that to be the understatement of 2008.
I am not entirely sure where to draw the line on interference and laissez-faire.
The Enron era begat Sarbanes-Oxley, which most would agree is an onerous burden, in terms of corporate compliance. But it or something like it HAS TO BE DONE, or we go back to corporate execs (and I do NOT use the word “corporation” as a lefty bad-guy catchall buzzword) a: hiding behind the corporate veil and b: escaping with country-club penalties for fraud and misstatements amounting to hundreds of milions of dollars.
On one hand, we have Larry Kudlow bloviating about “free markets” “free markets” “free markets” “free markets” until his buddies on the Street are getting pummeled by the bad decisions they made and financial engineering they created. Then it’s “bring in the Fed and pump away”. Same with Crammer.
I’ve said this before and I will say it again:
1: Houses have cost 3x annual gross wages for perhaps 75 years. They are roughly double that, obviously more in many places.
2: A loan insufficiently collateralized cannot be made sound. If it is cheaper to walk away from an impossible burden, many people will.
The effort to prop up housing prices, IMO, is doomed.
I have some cd’s with WaMu so don’t I feel safe and lucky....
As long as the total of your CDs is under the $100K FDIC limit (or $200K for a joint-ownership) you’re fine. Even though the FDIC will insure to $200K for a dual-ownership (as in a marriage or a dual named trust) I don’t like the idea of having more than $100K in one institution.
I couldn’t agree more.
The fed and the government are trying to give shots of red bull to the housing related industries and financials to prop up bloated home prices in many markets that aren’t even remotely justified. All this interference only makes it worse and more costly as things are dragged out, instead of letting regular market forces do their thing. And red bull is just like any other drug. As time goes by, you end up having to do more and more to get the same high, and the coming down period ends up being much more tramatic.
Wamu will still exist. They aren’t going anywhere. They still have strong revenue generated from their retail banking, commercial banking, and credit card business.
Bank of America was able to buy countrywide easily because they had already greased that deal back in 2007 with the 2 billion in funding they provided for preferred stock.
Wamu’s biggest suitors for years was Citi and JPmorgan, and neither of those companies are in any financial position to attempt a buyout of Wamu in 2008, even at its lower stock price.
Stock price dives. Dollar cheapens even more. I can see a European or Asian bank moving in.
Same is true for a lot of American companies.
Wamu will still exist. They aren’t going anywhere. They still have strong revenue generated from their retail banking, commercial banking, and credit card business.
One wonders what they think of the idiots and/or racketeers in the executive suites of their company.
They think, “Lucky bastards!”
Ha! The guy on the left is short WM common stock, LOL.
I can't help being very pessimistic on the economy, and I study it quite a bit. I'll freely admit to having a bearish bias. I am not out to win converts or bum anyone out, but at the same time, it further concerns me that come August-September, things could suck so profoundly that we would have the populace just BEGGING for a socialist regime to come and make all their problems go away. Won't that be fun? Yuk.
Jim Cramer went postal on the board of directors yesterday. The CEO is at the top of his “wall of shame”
I am sure the rank and file will see no adjustment in their bonuses either.
As we all should. Where are the stockholders screaming at the Board and execs ? Ultimately it’s a problem for the shareholders because they are the ones who are last in line if the bank goes TU.
This is the kind of crap libertarian Larry Elder routinely supports.
If you can’t blame your board for allowing the company to make stupid loans that are now worthless, who should you blame?
“If you can’t blame your board for allowing the company to make stupid loans that are now worthless, who should you blame?”
That’s the proper summation, as far as I’m concerned, thank you. I didn’t post this to rag on the corporate form of business organization. Maybe they had the greediest, most unethical loan agents working for them, but there STILL had to be a committee overseeing the underwriting of loans and there STILL had to be some degree of risk management/assessment, and there STILL had to be some input from the top as to how much debt the bank was willing to take on. Now maybe a lot (or almost all, AFAIK) of these loans were going to be resold and thus not sit on WMs’ books, but those loans DID have the stuff-back feature whereby they could be forcibly “returned to lender” (play Elvis music here) where they went bad within the first year.
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