WaMu Bailout a Bonus Bonanza for Brooklyn Bigwig
Towards the bottom of the New York Times’ account of the seizure of Washington Mutual, the nation’s largest savings and loan and a big player in troubled mortgage market, were some interesting details about longtime Brooklyn player and brand-new WaMu CEO Alan Fishman’s non-role in the takeover proceedings and the big bucks he stands to…
Towards the bottom of the New York Times‘ account of the seizure of Washington Mutual, the nation’s largest savings and loan and a big player in troubled mortgage market, were some interesting details about longtime Brooklyn player and brand-new WaMu CEO Alan Fishman’s non-role in the takeover proceedings and the big bucks he stands to reap for his three weeks of service to the company:
But the seizure and the deal with JPMorgan came as a shock to Washington Mutual’s board, which was kept completely in the dark: the company’s new chief executive, Alan H. Fishman, was in midair, flying from New York to Seattle at the time the deal was finally brokered, according to people briefed on the situation. Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus, according to an analysis by James F. Reda and Associates.
Fishman is the former head of Brooklyn-based Independence Community Bank and later Sovereign Bank; he’s also served as the chairman of the Brooklyn Academy of Music and the Brooklyn Navy Yard Development Corp. (As a commenter notes, he’s also on the board of the Downtown Brooklyn Partnership and used to be the chairman of the Brooklyn Chamber of Commerce.) Nice work if you can get it!
Government Seizes WaMu and Sells Some Assets [NY Times]
I like Alan Fishman. And he dedicates alot of time and energy to civic causes. In addition to the positions that Brownstoner listed, he was also on the Board of the Downtown Brooklyn Partnership and the Brooklyn Cha,ber of Commerce (and I think the Library too). There is no more civic-minded businessman in all of Brooklyn. But please. How am I supposed to trsut an institution with my money if they keep on makeing lamebrained deals that reward someone for being fired. When are we going to make these golden parachite deals illegal already?
“If money isn’t loosened up, this sucker could go down,†President Bush declared as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.
Stupidity reigning.
DIBS I work on Wall Street and if the finance guys in NY really thought there was money to be made buying those assets, they would have been bought up already. Private equity and hedge funds are not afraid of risk and are ruthless when they smell blood. If existing money isn’t buying them it’s for a reason. They are willing to chance that (a) the gov’t will overpay for them, or (b) they can get them even cheaper. It’s like the old joke that went around when I was in school, how much does it cost the Board of Ed to buy a lightbulb? At that time it was like $25 or something for a 5 cent bulb.
Buying complex financial products is not something I would trust our gov’t to do properly, nor would I assume that even if it’s done perfectly that it will work. The idea is that the regional banks will start offering more credit to Main Street again once their balance sheets are cleared up. Guess what, you could give all $700B to Chase or Citi or whomever, and do you really think they are going to loosen lending standards again (no 20% down, bad credit?). The lending standards are going to be tight for a while no matter how much money the gov’t gives these banks, and that’s as it should be, so we don’t get into a bigger foreclosure/credit card mess than we already are. Easy money is what caused the problem, and the banks realize this. Clear up their balance sheets and the same problem still exists. The American consumer has spent more than they can afford. That’s just going to have to be ridden out.
If the goddamn media would stop referring to this as a “bailout” then these congressmen would pull their heads out of their asses and pass a bill that allows the government to purchase these assets. Even the Director of the OMB says that taxpayers are likely to make money off of this deal as the assets they are buying will have extremely high yields being paid. Stupidity reigns.
Greed and stupidity reigns supreme! Awesome!!! Shock and awe!!!
What really kills me is that the retail bank branch employee always get paid the least amount of money and make the most amount of money for the banks. Retail is saving investment bankers and the retail employees make a tenth of what these guys make that are losing money for these companies.
he got a great deal and should be happy and retire.
This is exactly why the financial industry is in trouble. Executives make rediculus amounts of money for either not doing much (like in 3 weeks) or even if the company does bad (like all the big firms, the CEOs are still getting millions even though the company lost billions). The math just doesn’t add up. It’s the individual investors that get screwed.
The one consolation, and a very poor one at that, is that he is going to have to pay significant income tax to the Federal, State and City governments on this little windfall. That is if he is dismissed by JP Morgan Chase. He probably negotiated this package because everyone knew that WaMu was going down the tubes and he was taking a risk leaving his previous job. WaMu’s board probably thought that if anyone could save them, it was this guy, hence the bucks.
Ok, he seems like a nice enough guy but why oh why must these folks get such high sign on bonuses and why should he be entitled to this ridiculous amount of severance for less than 3 weeks of service? this (the high bonus $ across the board, not this particular gentleman) is part of the reason why we are in such deep doo doo.