Let's give all of our money to the rich!!!

Alan Fishman, CEO WAMU

I have been watching this one closely for obvious reasons. The last two companies I worked for are Chase and Providian (Purchased by Wamu). I have good friends at both companies and financial interest in Chase. I have been harping on the inequities of our current system for some time, but everyday more details come out that even shock me.

Carc sent out the message last week about Wamu's CEO. Turns out that FDIC regualtions (GASP!) will prevent him from receiving his multi-million dollar severance after just 3 weeks on the job. My favorite is the following statement from Chase's Corporate Communications secretary.

"It is doubtful that Mr. Fishman would be entitled to severance payments under his contract because of FDIC regulations, but in any event, he would not accept severance under these circumstances," the spokesman said Wednesday in an interview.

How can you not be impressed by that mastery of the human language. The message is basically, we found out that he CAN'T get the money and now that we KNOW that we are comfortable in saying he would have never taken it anyway... But it gets better...

He would not comment on whether Fishman would keep a $7.5 million signing bonus or whether he is still employed at WaMu. Fishman's employment contract made him eligible for $11.6 million in cash severance, according to James F. Reda & Associates, a compensation-consulting firm in New York.

No comment on whether or not he will keep the $7.5MM signing bonus for 3 weeks work. I guess he doesn't have the same crisis of conscious about a signing bonus, OR maybe it has something to do with there being no law to prevent him from cashing in.

As if that wasn't funny enough for your afternoon reading. Try this for the employees of Wamu

Washington Mutual employees will not find out for another two months whether they have a job and the fate of their pensions remains unclear, according to a JPMorgan Chase executive who spoke to employees from both companies in a frank, hourlong conference call Thursday.

JPMorgan (NYSE: JPM) also plans to rebrand WaMu branches across the country with the JPMorgan Chase name, said Charlie Scharf, head of JPMorgan Chase’s Retail Financial Services group.

WaMu employs about 43,000 employees nationwide — including 3,500 in downtown Seattle — and JPMorgan Chase has about 195,600.

Scharf, who spent a chunk of the conference call answering blunt questions from employees, said employees’ pension plans are part of WaMu’s business that’s held up in Chapter 11 bankruptcy, so it’s not JPMorgan’s responsibility to honor them.

However, Scharf said JPMorgan is attempting to transfer the pensions to his company. He also said there are plans to “replace obligations so people don’t lose money.”

As for layoffs, Scharf said JPMorgan is taking 60 days to sort through WaMu’s organization to determine which employees it will cut and keep.

“By Dec. 1, our goal is to be able to tell everyone in the organization what the future is here,” said Scharf. “Unfortunately there is duplication. There will be losses of jobs. We don’t know where that job loss is and we’re going to figure it out.”

Severance and potential job cuts

Scharf said employees will be divided into three categories: those who are laid off immediately, those who will keep their jobs at JPMorgan for the long term, and those who will be asked to stay during the transition period and then will be cut at the end.

Employees who are asked to stay through the transition period will receive a massive incentive. Not only will they receive their severance, they’ll also receive their 2008 bonus, a pro-rated 2009 bonus and an additional salary payment based on the length of the transition period.

“If the transition date is at the end of February, you’ll get an additional five months worth of salary at the end of that transition,” said Scharf.

Employees who are laid off immediately will receive severance pay and outplacement assistance. Employees who remain long-term will receive their yearly bonuses as usual and “we’ll have a combined incentive plan for everyone,” said Scharf.

“We do intend to retain most of the people here,” he said.

Employee awards

Several employees asked Scharf about employee equity awards that were handed out in the form of stock options.

After federal regulators took over Washington Mutual last week and sold the bulk of its operations to JPMorgan, the WaMu company’s stock plunged to 16 cents and was delisted from the New York Stock Exchange, leaving shareholders with next to nothing. JPMorgan did not assume any shareholder debt.

Scharf told employees that JPMorgan would not replace any stock awards.

“Those are worth what they’re worth,” he said, sparking laughter. “I’m really not trying to make light of it. It is all your money.”

Transition talk

Scharf said JPMorgan, which closed on WaMu’s banking operations in only 26 hours, is working to assemble merger committees with executives from both companies to work through the transition.

JP Morgan’s goal is that by the beginning of next week, the two companies will be working together. Scharf added that JPMorgan plans to be as open as possible about transition activities.

“There’s a lot more work to do,” said Scharf. “We’ve got to report joint earnings in about two weeks, which is kind of remarkable and difficult.”

Advertising and branding

JPMorgan Chase plans to rebrand WaMu branches with its name, largely because the new company already has such a massive advertising base and spends $2 billion a year on building its brand.

Once again the mastery of language is beautiful as they somehow got the writer to include the word "massive" to describe the incentive package for employees who stay during the transition. Almost makes you forget that high-salaried executives are generally the folks that stay on through the transition.....