NEW YORK (Reuters) - Washington Mutual Inc <WM.N>, a nationwide bank and home lender slammed by the mortgage slump, said on Monday that it would strip Chief Executive Kerry Killinger of his title of chairman next month.
By Joseph A. Giannone
NEW YORK (Reuters) - Washington Mutual Inc <WM.N>, a nationwide bank and home lender slammed by the mortgage slump, said on Monday that it would strip Chief Executive Kerry Killinger of his title of chairman next month.
The Seattle-based savings and loan said independent director Stephen Frank would become chairman of the board on July 1. Killinger, who has presided over WaMu amid a fall in stock price and earnings, will remain CEO and a director.
"This is a clear acknowledgment of the important failings by Killinger and the board in managing risk to shareholders," said Steve Abrecht, executive director of SEIU Master Trust, a union-affiliated fund that lobbied for the CEO-chairman split.
!ADVERTISEMENT!Frank, 66, has been a director since 1997 and is the retired CEO of utility company Southern California Edison, a subsidiary of Edison International <EIX.N>.
WaMu said in April that it would consider splitting the CEO and chairman roles at a future board meeting. Angry stockholders have agitated for management changes at the bank, shares of which have plunged 79 percent during the past year.
"We heard the feedback and the input from our shareholders. The board took that all into account," WaMu spokeswoman Libby Hutchinson said.
The board meets later this month for a two-day session at which key issues such as strategy, dividends and cost-cutting will be under consideration.
WaMu's board shake-up comes the same day Wachovia Corp <WB.N> announced it had ousted Ken Thompson as CEO after a host of troubles and an ill-timed takeover of a big mortgage lender dragged down its earnings and its stock.
Last month Wachovia, the fourth-largest U.S. bank, split its CEO and chairman roles. On Monday Lanty Smith, who replaced Thompson as chairman, was named interim CEO.
Charlotte, North Carolina-based Wachovia said Thompson, who had run the company since April 2000, was retiring at the request of its board.
Killinger and Thompson join a growing list of banking chiefs whose careers were derailed by the global credit crisis that began last summer. Citigroup Inc's <C.N> Charles Prince and Merrill Lynch & Co's <MER.N> Stanley O'Neal also were forced out by their boards.
Further on Monday, Washington Mutual revised its rules so that director nominees must receive a majority of votes cast in uncontested elections. In addition, it changed the leadership of key board committees and announced a search for new independent directors.
Shares of Washington Mutual fell 10 cents, or 1.1 percent, to $8.92 in afternoon New York Stock Exchange trade.
(Reporting by Joseph A. Giannone; Editing by Gerald E. McCormick and Lisa Von Ahn)
