Investment Group Calls For Resignations Of James Stever And Charles Lillis
WASHINGTON, April 16 /PRNewswire/ -- Pointing to unofficial election returns showing that shareholders rejected two additional WaMu Directors, James Stever and Charles Lillis, the CtW Investment Group called on the WaMu Board to immediately release full election results and demand the resignation of any directors who failed to win majority shareholder votes.
"Washington Mutual shareholders sent an unequivocal message today that they are ready for more independent and accountable Directors," said CtW Investment Group Executive Director William Patterson. "While we commend Washington Mutual's Board for promptly accepting Mary E. Pugh's resignation, we believe that Charles M. Lillis and James E. Stever also failed to win re-election. The Board should immediately disclose detailed election returns, and should demand the resignation of any Directors who failed to win majority support, excluding broker votes."
The letter, which is below, cites preliminary election returns showing that shareholders withheld 51.2% from Mr. Lillis, 61.9% from Ms. Pugh, and 50.9% from Mr. Stever. CtW had urged shareholders to withhold from Pugh in response to risk management failures and from Stever in response to poor executive compensation practices. AFSCME also urged withholds from Stever and Lillis.
**Note: A copy of the letter is below. For further information, visit http://www.ctwinvestmentgroup.com/ or contact Anna Mumford at 718-710-1773.**
CtW Investment Group Letter:
Mr. William G. Reed
Chairman, Governance Committee
c/o Secretary William L. Lynch
Washington Mutual Corporation
1301 Second Ave.
Seattle, WA 98101
April 15, 2008
Dear Mr. Reed:
Washington Mutual shareholders sent an unequivocal message today that they are ready for more independent and accountable Directors. As you know, the CtW Investment Group had urged shareholders to withhold from Ms. Mary E. Pugh in response to her Finance Committee's failure to oversee risk management, and from Mr. James E. Stever for attempting to insulate executive bonuses from the consequences of that risk management failure.
While we commend the Board for promptly accepting Ms. Pugh's resignation, we believe she was not the only Director who failed to win re-election. The chart below summarizes preliminary vote totals for Directors Pugh, Stever and Charles M. Lillis, excluding uninstructed broker votes.
Director; Votes For; Votes Withhold; Percent Withheld
Charles M. Lillis; 252,712,540; 264,682,272; 51.2%
Mary E. Pugh; 197,378,364; 320,016,448; 61.9%
James E. Stever; 254,195,288; 263,199,525; 50.9%
As indicated above, preliminary returns show a majority of shareholders also withholding from Directors Stever and Charles M. Lillis - who were also opposed by AFSCME - once uninstructed broker votes are discounted. Such broker votes - those cast by brokers exercising discretion over certain client shares - have been described as "legalized ballot box stuffing" since most brokers reflexively support management. The NYSE has proposed their elimination in director elections for this reason.
We therefore urge the Board to immediately disclose detailed election returns, and to demand the resignation of any other Directors who failed to win majority shareholder support, excluding uninstructed broker votes. Getting to the bottom of this matter is particularly important given WaMu's majority vote policy, as high withholds cannot be dismissed as mere symbolic efforts, but rather indicate unambiguous shareholder opposition to a Director's continued service.
Sincerely,
William B. Patterson
Executive Director
CC: Members, Board of Directors
CtW Investment Group
