Washington Mutual Chief Executive Alan Fishman was hired on September 7 to replace former WaMu CEO Kerry Killinger and help turn the troubled savings and loan around. Little could be done in three weeks, and some would argue that given their troubled loan portfolio it would have taken years to work out, if at all. In any event, federal regulators stepped in to seize the bank last night, and they immediately turned Washington Mutual over to JPMorgan Chase in an asset purchase deal. This followed a quiet run on WaMu deposits in the past couple of weeks in which depositors took out some $16 billion.
So while I don’t blame Fishman for his package, which is pretty typical of the big bank CEO employment agreements we see all the time, he gets to take out a little bit more than your average depositor, and I do think he’s making out like a prince. Here’s how it breaks down according to the SEC filing discussing his compensation (his personal employment or severance agreement are not available, but I have linked to some sample employment contracts as well as a sample termination or severance agreement):
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A signing bonus of $7.5 million
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On his termination, 2.5 times his base salary, for a total of $2.5 million
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On his termination, his full first year bonus, equal to $3.65 million
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Relocation bonuses and other payments under their executive benefits plans
Total compensation under these packages is approximately $14 million, which excludes the value, if any, he might receive under his option grants in the Washington Mutual Equity Incentive Plan, as well as the cost of any income tax liability he might incur if his payments are subject to excise taxes (see my post on IRS Section 409a for additional information). Not a bad month.
Here are some links to review and search across thousands of executive employment agreements or termination and severance agreements written by top law firms. I’ve also provided a link to an agreements and contracts site which allows you to do free searching for specific agreement clauses and provisions, and for anyone who wants to see my previous post on severance agreements during the big Wall Street shakedown, help yourself.
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