Washington Mutual's board of directors decided that its senior executives deserved huge bonuses in spite of the huge losses, layoffs and the devastating impact on their customers. At the end of last year, WaMu announced that it was setting aside $1.6 billion for loan losses in the fourth quarter, closing 190 of its 336 loan centres and sales offices and laying off 3,000 employees. WaMu expects another $1.8 to $2 billion in loan losses this quarter.
And how were executives punished for this dismal performance? Well senior executives including WaMu chief executive Kerry Killinger, chief financial officer Thomas Casey, chief operating officer Stephen Rotella, and retail banking chief James Corcoran had their bonus targets protected by their board of directors. In January WaMu awarded Killinger 3.2 million stock options in order to "provide strong incentive to restore shareholder value."
I for one find this incredible. The only place these guys should be is on the unemployment line with other former WaMu employees. Or better yet in jail. The subprime mess is a case study in why markets must be regulated to protect consumers and the economy from the greed and corruption that cause such devastation. But no. Once again it's regular people pay the price and these criminals get richer still. I wonder if we'll ever learn.