CtW Investment seeks resignation of WaMu board members who fail to win majority vote

By Lisa Kerner

Charlotte, N.C., April 14 - CtW Investment Group demanded that Washington Mutual, Inc. request the resignation of any directors who fail to win a majority vote, excluding broker votes, at the annual meeting on Tuesday.

The investor's research director, Richard Clayton, will attend the meeting, according to a CtW news release.

CtW cited specifically directors Mary Pugh and James Stever for their "respective failures to independently oversee risk and maintain the link between pay and performance."

Current New York Stock Exchange rules allow brokers to vote on behalf of certain shareholders in director elections. Last year, such votes accounted for over 19% of the total at WaMu, CtW said.

According to the release, the Securities and Exchange Commission has failed to act on the NYSE's attempt to eliminate broker votes in director elections.

"Reports that WaMu spurned a takeover offer from JPMorgan in favor of a TPG deal that permits current management to stay in place underscore the need for a strong, independent and accountable board that will put shareholder interests first," CtW executive director William Patterson stated in the release.

On April 8, WaMu announced it had entered definitive agreements to raise $7 billion through the direct sale of equity securities to an investment vehicle managed by TPG Capital and to other investors including several of WaMu's top institutional shareholders.

TPG's investment vehicle will purchase $2 billion in newly issued WaMu securities, a WaMu news release stated.

In February, CtW asked WaMu directors Pugh, Stephen E. Frank and William G. Reed Jr., all members of the company's finance committee, to explain what they did to protect shareholders from "excessive mortgage-related risk over the past two years."

CtW said it will urge shareholders to vote against the directors at the 2008 annual meeting.

In addition to WaMu, CtW targeted "culpable directors" at Bank of America, Citigroup, Merrill Lynch, Morgan Stanley and Wachovia in its "Subprime Director" Focus List for the 2008 proxy season, the investor said.

WaMu is a Seattle-based consumer and small business bank.

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