With Washington Mutual’s stock price (WM) now in the Bear Stearns takeout range, JP Morgan’s Jamie Dimon (JPM) is looking to repeat history:
NYT: JPMorgan Chase executives have been studying the company in recent weeks as they considered another bid, after approaching Washington Mutual in March. James Dimon, the bank’s chief executive, has long had his sights set on the franchise for its big California branch network and its New York and Chicago operations. It is unclear if other buyers, like Wells Fargo or a foreign bank, might also be interested. But JPMorgan executives are not prepared to make an offer unless government officials request one, according to people briefed on the situation.
While the majority of the media chatter is on Lehman brothers, WaMu has quietly gone off a cliff, making us wonder why the new CEO took on this headache. Now we know:
Mr. Fishman received a sign-on bonus of $7.45 million in cash, about 612,000 shares of restricted stock, and five million stock options subject to aggressive performance targets — a package worth about $11.5 million. He will also receive a $1 million salary, an annual bonus aimed at $3.65 million, and annual stock grants worth at least $8 million, according to a pay analysis by James F. Reda & Associates.
But the drumbeat of bad news has rattled investors who believe Washington Mutual’s problems are worsening. On Monday, the bank was effectively put on probation by its regulator, the Office of Thrift Supervision, as it executes its turnaround plans. Then, Standard & Poor’s, a major rating agency, lowered the bank’s credit outlook because of concerns about the toll of a worsening housing market. And Sunday’s announcement of a new chief executive, coming just hours after the government bailed out Fannie Mae and Freddie Mac, fuelled speculation that the bank’s condition was deteriorating.
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