Washington Mutual ensures top exec's pay protected from sub-prime losses

This story from Reuters highlights how far gone US banks really are, when time and resources are squandered to ensure bonus packages for management are protected from sub-prime fall out.

The board's committee said in light of the challenging business environment and the need to evaluate performance across a wide range of factors it will take a three-step approach to rewarding its executives including subjectively evaluating company performance in credit risk management.

Subjective evaluation of company performance as opposed to objective evaluation of crippling losses related to Wamu's core thrift lending practices in the mortgage markets?

Surprisingly not everyone is suffering from the sub-prime fiasco:

In January, Seattle-based Washington Mutual said it awarded CEO Kerry Killinger 3.2 million stock options for 2008 to provide a "strong incentive to restore shareholder value".
WaMu's share price sank 70 percent in 2007 as mortgage losses soared

What incentive is needed to convince a CEO to restore shareholder value if their rewards may exclude the poor performing aspects of their business... that account for the lion's share of the share price losses to date?