WaMu changes how it awards executive bonuses

NEW YORK (Reuters) - Responding to shareholder criticism, Washington Mutual Inc (WM.N) said it will consider mortgage-related losses in awarding performance bonuses to top executives, including Chief Executive Kerry Killinger.

The board of the largest U.S. savings and loan had decided earlier this year that its human resources committee, which sets executive compensation, would not count mortgage-related credit losses and foreclosure costs in setting the bonuses. Among other executives eligible for these bonuses were Chief Operating Officer Stephen Rotella and Chief Financial Officer Thomas Casey.

Such losses, however, have largely been responsible for the $3.01 billion loss that Seattle-based Washington Mutual suffered in the six months ended March 31, including $1.14 billion in the first quarter. Washington Mutual is also one of the largest U.S. home loan providers.

Speaking at Washington Mutual's annual meeting, Killinger said the human resources committee will "incorporate specific credit-related targets for which we are accountable" in setting executive bonuses, and that he supported the change.

(Reporting by Jonathan Stempel; Editing by Gary Hill)