Washington Mutual CEO's pay cut on mortgage losses
SAN FRANCISCO, March 14 (Reuters) - Washington Mutual Inc (WM.N) cut the value of Chief Executive Kerry Killinger's 2007 pay package by nearly two-thirds after the lender suffered heavy losses from the mortgage crisis and its stock sank 70 percent, according to a regulatory filing on Friday.
Washington Mutual, the largest U.S. savings and loan, reduced Killinger's total compensation by 63 percent to $5.25 million from $14.2 million in 2006, according to the company's shareholder proxy statement filed on Friday with the U.S. Securities and Exchange Commission.
Killinger's salary remained the same at $1 million last year to maintain the tax deductibility of his full salary, according to the proxy, and he did not accept a bonus.
The value of his company stock awards fell to $669,000 from $2.25 million in part because the company did not fully achieve certain performance criteria. Banks worldwide have written down almost $200 billion of mortgage-related securities amid a wave of foreclosures in the United States.
Killinger, 58, has been the Seattle-based lender's CEO since 1990 and its chairman since 1991.
Washington Mutual also said in the proxy filing that its 2008 bonus plan for senior executives will reflect "credit risk management in light of the dislocation in the housing and credit markets and the related impact on our financial results."
Washington Mutual posted a $67 million annual loss in 2007 as it set aside money for souring home loans amid a worsening mortgage and credit crisis.
The company said in January it expected to set aside as much as $2 billion for credit losses in the current quarter and similar amounts in the following three quarters. (Reporting by Philipp Gollner)
