JPMorgan Chase & Co. is emptying out the executive floor of Washington Mutual Inc.'s Seattle headquarters.
A week after purchasing banking assets belonging to the nation's largest savings-and-loan association, New York-based JPMorgan told new employees Thursday that Wamu Chief Executive Alan Fishman; President Steve Rotella; Chief Legal Officer Michael Solender; Executive Vice President Todd Baker; Daryl David, chief human resources officer; and Frank Baier, special assistant to Mr. Fishman, wouldn't continue working for JPMorgan. Their last day is Friday. Ironically, Mr. Rotella had run JPMorgan's mortgage business before he joined Wamu at the end of 2004.
Chief Financial Officer Thomas Casey will stay through December, then depart from the company, according to a person who participated in a conference call Thursday about the changes.
Among former Wamu executives who stay are Alfred Brooks, president of the commercial group; David Schneider, president of home loans; and Anthony Vuoto, president of card services, the person said.
JPMorgan told employees it would pay deferred compensation and some form of severance for employees who qualify under existing Wamu benefit plans. The deferred compensation was the responsibility of Wamu's holding company, which filed for bankruptcy Sept. 26. JPMorgan, which bought Wamu's bank assets for $1.9 billion, wasn't obligated to honor those benefits.
JPMorgan also is trying to resolve issues surrounding $5 billion in cash held by the holding company before regulators seized it Sept. 25. Bondholders are hoping to get some of that cash.
However, JPMorgan won't honor change-in-control clauses for top executives, many of whom had contracts stipulating exit packages in the event of a sale. Mr. Fishman's contract with Wamu's holding company, for instance, would have awarded him an additional $11.6 million if he resigned or was terminated, on top of a $7.5 million signing bonus. Mr. Fishman has decided to keep the $7.5 million bonus and not pursue the $11.6 million, according to people familiar with the situation.
In conference calls, Charles Scharf, head of JPMorgan's retail operations, said Wamu's roughly 43,000 employees would be notified of their status by Dec. 1. Jobs will be retained, terminated or kept on for a transition period that hasn't been specified yet. It isn't known how many jobs will be in each category, but a JPMorgan spokesman said the biggest group will be those who will be retained.
Meanwhile, JPMorgan has overhauled Wamu's advertising campaign to trumpet the new ownership. Although Wamu bank branches will ultimately be rebranded as Chase, it may take more than a year for the integration to be completed.
"We're now backed by one of the largest and most stable banks in America," says one radio commercial now airing in the New York area. The bank also is running newspaper ads that say "Wamu & Chase. Safe & secure."
JPMorgan is also expected to start cutting the unusually high interest rates Wamu was paying for deposits in an effort to attract new customers. As of Thursday, Wamu was offering an annual percentage yield of 4.25% on an eight-month certificate of deposit. That is significantly higher than many other banks across the country.