Investors Angered as WaMu Shields Exec Bonuses

Bank's board of directors extracts subprime losses from bonus formula
By Jim O'Neill,  Newser User
Posted Mar 5, 2008 8:53 AM CST
A branch of Washington Mutual Bank is seen in downtown Sacramento, Calif.   (Associated Press)
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(Newser) – Washington Mutual’s directors have decided to limit the hit its executive management team can take from the subprime credit fiasco, setting cash bonus targets that exclude costs from foreclosures and mortgage-related losses, reports the Wall Street Journal. The move angered some shareholders who’ve seen their investment shrink as WaMu’s stock plunged 70% in the past year.

About 100 of WaMu’s top execs, including CEO Kerry Killinger, are part of the new bonus agreement that the board’s human resources committee approved Feb. 26, citing a “challenging business environment” for its decision. WaMu reported a $1.87 billion fourth-quarter loss attributed to the collapse in the housing market, especially on the West Coast, where it is heavily exposed.