Union Forces WaMu Director Out

A heated proxy battle at Washington Mutual in Seattle resulted in what some news reports categorized a surprise victory when Mary Pugh, a WaMu director for nine years and chair of the finance committee for the last three years, resigned.

In a press release yesterday, WaMu said that Pugh resigned from the board. The union-backed CTW Investment Group was pressuring the WaMu board to demand the resignation of any director who failed to receive a majority of in-favor votes in this year’s proxy voting.

Proxy advisory firms RiskMetrics Group, Glass Lewis, Proxy Governance and Egan-Jones had called on investors to withhold support for one or more WaMu directors.

“Shareholders at Washington Mutual sent an unequivocal message today that they are ready for more independent and accountable directors,” said William Patterson, executive director at CTW. “We commend Washington Mutual’s board for promptly accepting Ms. Pugh’s resignation and urge them to also demand the resignation of any other directors who fail to win majority shareholder support.”

Earlier this month, WaMu announced a series of measures intended to strengthen its corporate governance in an effort it said to return the bank to profitability including the separation of the chairman and CEO's role.

Effective July 1, independent director Stephen E. Frank, retired chairman, president and CEO of Southern California Edison and most recently WaMu's lead director, becomes chairman of the board succeeding Kerry Killinger who remains CEO and will serve as a director.