WaMu CEO Walks Away With $20 Million
Alan H. Fishman was CEO of Washington Mutual for 17 days before the bank failed last week. For his 17 days on the job, while investors and employees lose millions, he will walk away with $20 million.
Just more evidence that Wall Street's greed has driven our economy to the brink of disaster. This happened on the Republican watch. They had the White House and the Supreme Court for the last 8 years and Congress for 6 of the last 8 years. They bear the responsibility.
http://www.foxnews.com/story/0,2933,428641,00.html
WaMu Gives New CEO Mega Payout as Bank Fails
Nice work — if you can get fired from it.
That's just what one Alan H. Fishman might have thought when he woke up Friday morning.
Fishman was the new chief executive officer for Washingon Mutual — WaMu — the nation's largest savings and loan, which was taken over Thursday night by federal bank regulators and quickly dumped in a fire sale to JPMorgan Chase for the Wal-Mart-like price of $1.9 billion.
But don't cry for Fishman, who reportedly was sky-high — literally — last night, on a flight from New York to Seattle, when WaMu collapsed. Even though he's only been on the job for less than three weeks, he's bailing out with parachute worth close to $20 million, according to an executive compensation analysis conducted for the New York Times by James F. Reda Associates.
That's right, $20 million for 17 days on the job ... and his company failed.
Fishman, who formerly was chairman of Meridian Capital Group, apparently was much coveted by WaMu, which was counting on him to lead the failing thrift out of mortgage troubles that pushed the bank to a $3.3 billion second-quarter loss.
According to filings with the Securities and Exchange Commission, WaMu threw a $7.5 million bonus at Fishman when it hired him on Sept. 8, and guaranteed him an immediate cash severence of $11.6 million — both of which he gets to keep.
He also was eligible for annual bonuses of up to 365 percent of his annual base pay — set at $1 million — to go with millions of shares of company stock.
Fishman does lose out on a big bonus that would have kicked in had he remained on the job through 2009.
Documents show WaMu was going to pay their new boss $8 million to simply not screw up and get fired — all negotiated as the Seattle-based banking giant's loses climbed to an estimated $20 billion.
posted by Glenn Jonas at 12:54 AM
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4 Comments:
I'd like to be a CEO at a place like WAMU for just a day. I'd do more good than these bozos and get paid (not earn) enough to retire and fund my favorite theological schools in eastern and southern Africa.
Our country needs an Amos and a Micah. We get Land and Dobbs.
7:34 AM
"According to filings with the Securities and Exchange Commission, WaMu threw a $7.5 million bonus at Fishman when it hired him on Sept. 8, and guaranteed him an immediate cash severence of $11.6 million — both of which he gets to keep."
The board of WaMu should bear the brunt of this fiasco. They were the ones who knew before they hired him that the company was in trouble and yet hired him with this much guaranteed money.
9:39 AM
No Jr. I disagree. Fishman should give back the money. Or the government should take it from him. Seriously. When employees and investors are potentially losing their life savings in the company's stock (not to mention employee jobs) wouldn't it be a great example if he simply gave back the money and said, "in good conscience I can't keep it."
What would Jesus do?
10:27 AM
I agree...he should do something with it other than stockpile it or reinvest it for himself, but the fact that they agreed to give it to him makes it his money (for better or worse). I hope he donates the vast majority of it to charity. He can't just give it back to the company because it's obvious that the people running it (i.e. those that hired him) don't know what they're doing. Giving it to the government would be a waste too because that's what the government does...waste money (besides, he still has to pay taxes on it which will probably end up putting about half of it in federal and state governments, I would guess).
I'm not exactly sure how he could get it back into shareholders' hands...I think that would be ideal, but I don't know how that would work logistically.
It becomes a dangerous thing when we are open to letting the government come in and take, willy-nilly, what they believe we should not have when the two parties involved had a legal, contractual agreement.
Analogously, do sports stars (who do nothing but play a game for exorbitant sums) give back money for the time they spend on the bench because of an injury (especially phantom "soreness")? No, because they have a contract (unless there are stipulations spelled out in the contract). We can't go back and change agreements after the ink is dry...that's one of the reasons giving bankruptcy courts the ability to rewrite mortgages is so dangerous. It undermines the centuries old common law that has sustained order since long before this country was founded.
All that being said, I definitely think he should do something with the money other than keep it to himself. I think it would qualify as "ill gotten gain." What's happened isn't illegal but him keeping the money would be immoral, I think.
12:38 PM
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