CEO, 5 other Washington Mutual executives leaving

[October 03, 2008]  WASHINGTON (AP) -- The CEO of failed Washington Mutual Inc. and five other senior executives of the largest U.S. thrift, now owned by JPMorgan Chase & Co., are leaving their positions soon.

Employees of Seattle-based WaMu were told Thursday that Chief Executive Officer Alan H. Fishman and the other executives are departing. A memo to employees from Charlie Scharf, CEO of JPMorgan Chase's retail financial services, said the combination of the two companies made their positions redundant.

The employees will be told by Dec. 1 whether their jobs will continue -- which will be the case for most of the 43,000 employees -- moved to other jobs or eliminated, according to a separate memo Thursday from Scharf.

"The largest number will continue as employees of JPMorgan Chase," the memo said. "We will ask other employees to serve in transition roles over a number of months or longer, and will give them financial incentives to remain through the transition period. Finally, we will tell other employees -- the smallest group -- that their jobs are ending in the near term."

All employees' key benefits -- salary, health insurance, bonus plans, 401(k) retirement plans and pension plans -- will remain the same "for now," Scharf said.

Fishman held the job only a few weeks before Washington Mutual was seized by the government on Sept. 25 and sold to the Wall Street investment bank for $1.9 billion. He is not taking any of the multimillion-dollar severance pay under the employment contract he signed with WaMu, a spokesman for Fishman said Thursday.

It is doubtful that Fishman would be entitled to severance payments because of regulations governing the disposition of the thrift's holding company, the spokesman said, but in any event he is not accepting severance under these circumstances.

Fishman's employment agreement with WaMu provides around $6 million in cash severance and retention of his $7.5 million signing bonus if he leaves his job, according to a company filing with the Securities and Exchange Commission.

Fishman's spokesman declined to say whether he planned to keep the signing bonus.

Sen. Maria Cantwell, D-Wash., said she was happy that JPMorgan Chase will honor the supplemental pension plans of WaMu employees.

"While some of their retirement savings were secured by the federal government, supplemental pensions and other earned income were not," Cantwell said in a statement. "Until today, JPMorgan remained silent on whether they would honor these benefits."

Cantwell said she had been working to ensure that JPMorgan Chase did so.

The board of WaMu reached out to Fishman to replace Kerry Killinger as CEO as the thrift was in a downward financial spiral, struggling with cascading losses from soured mortgages. On Sept. 8, the same day WaMu announced Fishman's appointment as chief executive, the bank signed an agreement with federal regulators to provide an updated business plan and forecast for its financial performance.

In addition to Fishman, the departing executives are President and Chief Operating Officer Stephen Rotella; Todd Baker, executive vice president of corporate strategy and development; Daryl David, executive vice president and chief human resources officer; Michael Solender, executive vice president and chief legal officer, and Frank Baier, whom Fishman hired to assist him.

JPMorgan Chase asked these executives to stay: Alfred Brooks, president of the commercial group; Chief Information Officer Debora Horvath; Chief Enterprise Risk Officer John McMurray; David Schneider, president of home loans; and Anthony Vuoto, president of credit card services. Chief Financial Officer Thomas Casey was asked to remain through the end of the year.

[Associated Press; By MARCY GORDON]

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