WaMu Richly Rewards CEO Failure
By Morgan Housel
September 29, 2008
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Back in March, Washington Mutual (NYSE: WM) drew all sorts of flak for concocting an executive compensation plan that made absolutely no sense. The plan effectively ignored the fallout from the credit crisis when calculating executive bonuses. In essence, it ensured that management would still walk out with fat paychecks, despite heading one of the most boneheaded subprime lenders in America --and what would ultimately become the largest bank failure in history.
Well, give 'em a hand, everybody ... WaMu just beat its own record of corporate arrogance.
Money for nothing and a terrible reputation for free
WaMu's new CEO, Alan Fishman, might go down as the ultimate showcase of executive greed if he doesn't do the right thing in the next few days. After just 432 hours on the job -- during which time he presided over the complete collapse of the company -- Fishman stands to collect more than $19 million in pay.
That's right: $19 million for 18 days work, or an annualized rate of $385 million. $1.05 million per day. $44,000 per hour. More money than most people will make in several lifetimes, all to watch one of America's largest banks spiral into failure.
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