WaMu Boots CEO Kerry Killinger, Shares Decline

September 8, 2008 11:08 a.m. EST

Seattle, WA (AHN) - Shares of Washington Mutual Inc., the country's largest U.S. savings and loan, decline on Monday after the company announced that it has sacked Kerry Killinger as chief executive officer.

Alan H. Fishman, who has more than 25 years of experience as a senior executive in banking and financial services, has been appointed chief executive officer and has joined WaMu's Board of Directors.

"We believe Alan Fishman is the ideal executive to succeed Kerry Killinger and lead WaMu through its current challenges," Stephen E. Frank, chair of the Board, said in a statement on Monday.

The firm indicated that it took that step after Killinger, 59, who served as WaMu's chief executive officer since 1990, failed to stop losses tied to home mortgages.

During Killinger, the company reported $6.3 billion to subprime mortgages-related losses over the last three quarters, while its shares plunged by 88 percent from a year earlier.

"I intend to hit the ground running here in Seattle with a focus on building on WaMu's strengths, addressing its weaknesses, and returning the company to profitability as quickly as possible," Fishman said in the statement.

According to the reports, the new CEO is expected to receive a $10 million signing bonus along with $1 million as his salary.

With the latest announcement, WaMu also signed an agreement with the Office of Thrift Supervision (OTS) concerning aspects of the bank's operations, principally in several areas of its risk management and compliance functions, including its Bank Secrecy Act compliance program.

Shares of Washington Mutual plunged by 6.1 percent or 26 cents to $4.01 in New York Stock Exchange composite trading after the announcement.