The sub-prime mortgage meltdown and ensuing credit crisis have made some pretty powerful heads roll on Wall Street. Merrill Lynch’s CEO Stan O’Neal was the first big name to depart the CEO suite when he was forced out in October. A week or so later, Citigroup, the world’s biggest bank, bid adieu to Charles Prince in early November. Both lost billions for their banks on bad bets and bad decisions. Citigroup alone said it would write down more than $15 billion. Both executives were in high-profile posts with high stakes and they paid the price when things went south.

Sharks are circling – well, a shareholder activist group at least -- around Morgan Stanley chief John Mack as his recent tenure has chalked up $11 billion in write-offs.

Mack claims that a group of traders made a bad bet on the sub-prime market, but to his credit he took responsibility for their actions, appointed a senior risk advisor, and, drum roll, gave up his bonus. Will he survive? Analysts seem to think so.

Others in the financial arena aren’t going so gracefully or selflessly. Take Washington Mutual, for example. Its shares were tanking (down 70 percent over the last year) before a rumor surfaced that it could receive a capital infusion from Goldman Sachs or Warren Buffett this week. Last week, WaMu circled the wagons. Not to defend its reputation. Not to fend off shareholder angst. The company moved to protect executive bonuses.

The Seattle Times and Wall Street Journal reported that the company revised its bonus plan with a key result being that bonuses for more than 100 top executives would be protected from WaMu’s financial woes related to the sub-prime bust. To do this, WaMu is leaving out the cost of bad real estate loans and foreclosures to calculate its net profit, the major indicator for executive bonuses. CEO Kerry Killinger gave up his $1.8M bonus last year, but his next bonus is expected to be worth much more. That ’07 perk was 33 percent of his $3.65M salary. His next bonus, according to the Seattle Times, has a target of 365 percent of his base salary, though the “actual” bonus may be up to only 150 percent.

As the Journal put it: The move will effectively shield the pay of more than 100 top executives from the fallout of the mortgage meltdown.

A curious move, considering the company posted a $1.87B fourth-quarter loss and, according to the Journal, “is exposed to some of the worst housing markets in the U.S., where home values are sinking and foreclosures are soaring.”

WaMu cites executive retention for the move.