Kerry Killinger
Encyclopedia
Kerry K Killinger is an American businessman and a former chairman and chief executive officer
of Washington Mutual
, a failed savings and loan association
that became the largest bank failure in U.S. history.
, from which he received his BBA
in 1970 and MBA in 1971. He began his career in the financial services industry in 1972, as an investment analyst with Bankers Life Insurance Company of Nebraska, and moved on to Murphey Favre in the 1976, at which he was a securities analyst and eventually a vice president.
acquired Murphey Favre in 1983, and Killinger was named executive vice president, and was promoted in 1986 to senior vice president, and to director in 1988. He was named president of the company that year, CEO in 1990, and chairman in 1991. American Banker
named him its 2001 Banker of the Year. In 2003, Killinger predicted that by 2008, Washington Mutual would not be identified as a bank. He said "We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe’s-Home Depot did to their industry."
Faced with mounting losses from the mortgage market and deep declines in the stock price as a result of the subprime mortgage crisis
, the board of directors removed Killinger as CEO on September 8, 2008. The Office of Thrift Supervision (OTS) seized Washington Mutual's banking divisions on September 25, 2008 and named the Federal Deposit Insurance Corporation as their receiver in the largest bank failure in the history of the United States.
While CEO of Washington Mutual in 2007, Killinger earned a total compensation of $14,364,883, which included a base salary of $1,000,000, a cash bonus of $0, stocks granted of $10,120,731, and options granted of $2,846,400.
In 2008, the year Washington Mutual ceased to exist and Killinger was fired as CEO, he took home $25.1 million in compensation. Killinger received a $15.3 million severance payment in September 2008 "as well as a $445,200 lump-sum payment for vacation benefits and a $300,669 'special payment'".
for his role in the collapse of Washington Mutual:
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of Washington Mutual
Washington Mutual
Washington Mutual, Inc. , abbreviated to WaMu, was a savings bank holding company and the former owner of Washington Mutual Bank, which was the United States' largest savings and loan association until its collapse in 2008....
, a failed savings and loan association
Savings and loan association
A savings and loan association , also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans...
that became the largest bank failure in U.S. history.
Early life and career
Killinger received his education at the University of IowaUniversity of Iowa
The University of Iowa is a public state-supported research university located in Iowa City, Iowa, United States. It is the oldest public university in the state. The university is organized into eleven colleges granting undergraduate, graduate, and professional degrees...
, from which he received his BBA
BBA
BBA may refer to:*Bachelor of Business Administration, degree*Bachpan Bachao Andolan, an NGO against child labour in India*Backyard Brawlers Association, a wrestling promotion based primarily out of Rockville Centre, NY*Balanced Budget Act, U.S...
in 1970 and MBA in 1971. He began his career in the financial services industry in 1972, as an investment analyst with Bankers Life Insurance Company of Nebraska, and moved on to Murphey Favre in the 1976, at which he was a securities analyst and eventually a vice president.
Washington Mutual
Washington MutualWashington Mutual
Washington Mutual, Inc. , abbreviated to WaMu, was a savings bank holding company and the former owner of Washington Mutual Bank, which was the United States' largest savings and loan association until its collapse in 2008....
acquired Murphey Favre in 1983, and Killinger was named executive vice president, and was promoted in 1986 to senior vice president, and to director in 1988. He was named president of the company that year, CEO in 1990, and chairman in 1991. American Banker
American Banker
American Banker is a daily trade newspaper covering the financial services industry. Founded in 1836and based in New York, American Banker has approximately 50 reporters and editors in six U.S. cities who monitor developments and breaking news affecting banks...
named him its 2001 Banker of the Year. In 2003, Killinger predicted that by 2008, Washington Mutual would not be identified as a bank. He said "We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe’s-Home Depot did to their industry."
Faced with mounting losses from the mortgage market and deep declines in the stock price as a result of the subprime mortgage crisis
Subprime mortgage crisis
The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
, the board of directors removed Killinger as CEO on September 8, 2008. The Office of Thrift Supervision (OTS) seized Washington Mutual's banking divisions on September 25, 2008 and named the Federal Deposit Insurance Corporation as their receiver in the largest bank failure in the history of the United States.
While CEO of Washington Mutual in 2007, Killinger earned a total compensation of $14,364,883, which included a base salary of $1,000,000, a cash bonus of $0, stocks granted of $10,120,731, and options granted of $2,846,400.
In 2008, the year Washington Mutual ceased to exist and Killinger was fired as CEO, he took home $25.1 million in compensation. Killinger received a $15.3 million severance payment in September 2008 "as well as a $445,200 lump-sum payment for vacation benefits and a $300,669 'special payment'".
Legal Fallout From Washington Mutual Collapse
In March 2011, Killinger was indicted by the FDICfor his role in the collapse of Washington Mutual:
In a complaint filed Thursday (17th March 2011), in Federal District Court in Seattle, regulators accused the former chief executive, Kerry K. Killinger, of leading Washington Mutual on a “lending spree” even though he knew that the real estate market was in a bubble. The suit also said that he failed to put in place the proper risk management systems and controls.