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WaMu directors survive attempt to oust them

/ Source: The Associated Press

Washington Mutual Inc. shareholders re-elected its entire board, despite efforts by some groups to oust the directors responsible for managing the thrift's exposure to risky subprime mortgages.

Mary Pugh, chairwoman of WaMu's finance committee, resigned and will not be returning to the board, despite being re-elected with 50.4 percent of the shareholder vote, according to results made public Wednesday.

A shareholder group representing major labor unions' pension funds had urged others to vote against Pugh. Shareholder groups had also called for votes to be withheld for members of the human resources committee, which devised a way of calculating executive bonuses in 2008 that did not factor in much of the impact of the mortgage crisis.

About 40 percent of shareholders voted against several directors who served on the human resources committee, including James Stever, Stephen Frank, Charles Lillis and Margaret Osmer-McQuade.

During the meeting, Chief Executive Officer Kerry Killinger said the board committee would revisit the compensation formula for 2008 and make specific recommendations for incorporating credit costs.

About 89 percent of shareholders voted to re-elect Killinger, also WaMu's chairman, to the board. However, a nonbinding resolution urging WaMu to require a non-employee to serve as chairman of the board passed with 51.5 percent of the votes.

WaMu, the nation's largest savings and loan, on Tuesday reported a first-quarter loss of $1.1 billion and said it needed to set aside $3.5 billion to cover bad loans in its $250 billion portfolio during the first quarter.