Reply #33: WaMu’s executive bonuses ignite backlash

[Robbien]

Washington Mutual's annual shareholder meeting April 15 will be no lovefest. Last month, an investor group targeted the company’s risk committee directors with a “no” vote campaign, claiming their failure to manage mortgage-related risk cost shareholders $28 billion in 2007, as shares lost 70% of their value; they currently trade at a 12-year low. Now that group is considering adding to its hit list the board’s human resources committee, which last week chose to protect executives’ 2008 bonuses by rejiggering its pay formula to exclude the impact on profit of any further housing-related loan losses—a maneuver that has only further enraged shareholders, coming on the heels of the bank’s $1.87 billion loss in the fourth quarter.

“It’s like a brazen daylight robbery,” said Richard Clayton, research director at CTW Investment Group, an advisory firm to union-sponsored pension funds that is orchestrating the “no” vote campaign. “The idea that performance bonuses ought to be exempting the consequences of irresponsible lending practices is not only astonishing, it’s unjust. I can’t believe the board thinks this would be acceptable to anyone.”

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080310/REG/392147957/1023/OTHERVIEWS