Wamu Decides to Drop Great Western's Top Execs

The top executives of recently acquired Great Western Financial Corp. will not be asked to stay at the combined company, Washington Mutual Inc. said Wednesday.

"We decided to run with the team that got us here," said Kerry K. Killinger, chief executive officer of Seattle-based Washington Mutual, whose acquisition of Great Western closed late Tuesday.

"There are some terrific people on the Great Western team, but we simply had some duplication," he added. The executives are expected to leave by the end of July.

The announcement coincided with the news that Washington Mutual had received regulatory approval to proceed with the integration of Chatsworth, Calif.-based Great Western in a deal valued at about $8 billion.

The acquisition, which followed a nearly four-month-long hostile takeover battle initiated by H.F. Ahmanson & Co. of Irwindale, Calif., will make the new Washington Mutual by far the largest thrift in the country, and the 11th-largest financial institution, with $88.5 billion of assets.

The announcement of the departures generally did not surprise analysts because Washington Mutual followed the same script in its December acquisition of American Savings Bank. Only two senior officials from American Savings, Craig Davis and John Donohue, remain at Washington Mutual.

"When you have a deal like this you have a buyer and a seller, and typically the buyer wants to insert their own players," said Thomas Theurkauf, an analyst at Keefe, Bruyette & Woods Inc.

"Not to discredit the Great Western team, but execution now is critical, and you want your own folks in there," he added.

Analysts said that Great Western's senior-level pay scale is higher than that of Washington Mutual, a difference that might have caused disruptions.

Perhaps more surprising to observers Wednesday was the decision by John F. Maher, chief executive officer of Great Western, not to accept a board seat with the new company, at least not in the near term. He had previously indicated that he would join Wamu's board.

"John concluded that he didn't want to sign on to do that if he couldn't do it properly," said Ian Campbell, a Great Western spokesman. "He couldn't do justice to all these prior commitments and to his role on the Wamu board, but the door is still open."

Mr. Maher, 54, has said that he plans to spend some time this summer with his family, including a trip to Italy as well as to a northern California ranch. He also is on the boards of several companies.

Typically, the chief executive of the acquired company stays on for at least several months to provide information to the acquirer and to help smooth out the transition-an anxious time for the acquired company's employees, analysts said.

"That is a bit of a surprise to me," said Mr. Theurkauf. "It usually doesn't hurt to have the remaining oversight from the selling CEO." Three other members of Great Western's board will become Washington Mutual directors.

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