By Jason Simpkins
Kerry Killinger yesterday (Monday) was ousted from his position as Chief Executive Officer of Washington Mutual Inc. (WM), the biggest U.S. savings and loan, after a ceaseless torrent of mortgage-related losses resulted in a 90% decline in WaMu stock.
Alan Fishman, Chairman of Meridian Capital Group, will take Killinger's place.
It was the stewardship of Killinger, who first joined Washington Mutual as executive vice-president in 1982, which resulted in more than $6.3 billion in losses for WaMu over the past three quarters, and caused the company's stock to plummet 90% in the past year.
Wamu yesterday agreed to provide an updated business plan and forecasts for results, asset quality, capital, and performance to the Office of Thrift Supervision, its main regulator. The agreement did not require the company to raise any more capital, a welcome relief for a company that in April sought out a $7 billion cash infusion from TPG Inc. that further diluted shareholder value.
Killinger stepped down as chairman of Washington Mutual in June, amid pressure from angry shareholders.
"We've been surprised that [the ouster] hasn't come sooner," Patrick Becker Jr., chief investment officer at Becker Capital Management told Bloomberg. "He was the architect that put this together. Clearly the foundation of it was not built to withstand the mortgage crisis."
David Dreman, one of WaMu's 10 biggest shareholders demanded Killinger's removal in June, Bloomberg reported. Later, in July, the American Federation of State, County, and Municipal Employees echoed Dreman's request.
Killinger now joins Wachovia Corp's (WB) G. Kennedy Thompson, Merrill Lynch & Co.'s (MER) Stan O'Neal, and Citigroup Inc.'s (C) Charles O. "Chuck" Prince as the latest head to be impaled on the subprime spike.
Alan H. Fishman, 62, has more than 25 years of experience as a senior executive in banking and financial services. He was previously president and chief executive officer of Independence Community Bank Corp. and Sovereign Bank. In December 2006, Fishman took over as chairman of Meridian Capital Group LLC. He holds a bachelors degree from Brown University and a master's degree in economics from Columbia University.
"We believe Alan Fishman is the ideal executive to succeed Kerry Killinger and lead WaMu through its current challenges," Stephen E. Frank, chair of WaMu's board said in a statement. "Alan has had a distinguished career in many aspects of the financial services business and brings a unique combination of in-depth industry knowledge, an entrepreneurial approach, and strong management skills that make him the right choice to be CEO of WaMu at this critical juncture."
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Wachovia CEO Thompson Shown the Door After 32 Years of Service, WaMu's Killinger Steps Down as Chairman