WaMu’s $1,325 an hour consultant…

March 4, 2008

images1.jpegWe don’t mean to pick on Washington Mutual (WM) — really we don’t. But we’d be remiss if we didn’t point out this exhibit to the 10-K that they filed late Friday (which we already footnoted here).

That’s because according to the agreement with former Chief Legal Officer Fay Chapman, Washington Mutual will pay Chapman $2.65 million in consulting fees over the next two years. And because the agreement clearly states that Chapman’s consulting duties “would not exceed 1,000 hours per year”, that works out to $1,325 per hour. If Chapman exceeds those 1,000 hours, “the additional time will be paid on an hourly basis mutually agreed by the parties”. And — not to be morbid here, but it is in the contract — if Chapman dies during the two-year term, Washington Mutual is still on the hook for the full consulting fee.

When WaMu announced Chapman’s retirement back in December, it mentioned the two-year consulting gig, but never gave a dollar figure. Nor did it note that Chapman was placed on “administrative leave” on Dec. 10 through the time her consulting gig starts on July 1. And it certainly didn’t mention that it was increasing Chapman’s pay as of Jan. 1. to $1.062 million. So there’s clearly some pieces of information missing here.

UPDATE 3/5: At the risk of picking on WaMu even more, we couldn’t help but notice this story from today’s WSJ on WaMu’s bonus plan for top executives. In the filing, WaMu’s board noted the “challenging business environment”. Really?

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