WaMu executives face tough questions

Washington Mutual shareholders re-elected 12 board members at a contentious annual meeting today, but a narrow majority also endorsed a call for separating the jobs of chairman and CEO.

WaMu Chairman and CEO Kerry Killinger faced some tough questions about the company's downward spiral and the recent decision to raise $7.2 billion in capital on terms that were criticized by several shareholders.

"You have destroyed the company — why are you not being held accountable?" asked Lee Lannoye, a shareholder and former WaMu executive vice president.

Killinger acknowledged that "no constituency is happy" with the company's results but asked stockholders to "have a little faith."

Several proxy advisory firms had urged shareholders to withhold their votes from various board members. But with the exception of Mary Pugh, whose resignation was announced at the start of the meeting, a preliminary vote count showed the directors received a majority of votes, Killinger announced from the stage.

Pugh and director James Stever had come under particular fire for their roles chairing the board's finance and compensation committees, respectively.

The measure calling on WaMu to have an independent chairman passed by a preliminary tally of 51 percent, Killinger said. The company had recommended shareholders vote against the measure.

Earlier in the meeting, Killinger said the 2008 executive bonus plan, which has been roundly criticized for not taking into account WaMu's mortgage-related losses, will be revised to do so, though he didn't offer specifics.

He predicted that a year from now, this month would be seen as a turning point for WaMu. "2007 was an extraordinary and difficult year for WaMu, but I believe we are at the beginning of the road back," Killinger said.

Just last week, the company raised $7.2 billion from a consortium of private-equity firms and outside shareholders. The investment, which essentially gave the new investors a 50 percent stake in the company, will "be more than enough to see us through the credit cycle," Killinger said.