tinyurl.com/5ajge4 -> online.wsj.com/article/SB121240774837437279.html
CEO G Kennedy Thompson, the company said Monday that board members have forced him to retire from the company he has run for eight years. Mr Thompson, 58 years old, has spent his 32-year career at the bank. He has been CEO for eight years and chairman for most of that period.
Associated Press Ken Thompson He was replaced as replaced as chairman in early May by lead independent director, Lanty L Smith. But the board backed him in strong terms, insisting the move merely allowed Mr Thompson to spend more time running the day-to-day operations of the Charlotte, NC, company. The company said its move would, in part, strengthen its "independent leadership," as recommended by shareholder advocates. Wachovia's move in April to slash its dividend by 41% also angered shareholders, who had previously taken a forgiving tone towards Mr Thompson. The latest move effectively put all of Wachovia's staff functions under Mr Smith, who also serves as chairman and CEO of North Carolina merchant bank Tippet Capital. Mr Smith has been a Wachovia director since 1987 and currently chairs the executive committee. He also now will head a board committee that has been formed to search for a permanent CEO, who may come from either inside or outside the company.
Wachovia Is Under Scrutiny 04/26/08 Ben Jenkins, who runs the general bank division of the retail giant, has also been named as interim chief operating officer. The firm's four lines of business -- general bank, wealth management, corporate, and investment bank and capital management -- will report to Mr Jenkins. In a statement, Mr Smith said Mr Thompson "has led the company with the highest integrity, loyalty and dedication," while noting "No single precipitating event caused the board to reach this decision, but a series of previously disclosed disappointments and setbacks cumulatively have negatively impacted the company and its performance." Mr Smith added, "Our recent successful capital raising actions provide us the solid foundation and flexibility we need in an environment which remains extremely challenging for Wachovia and the entire banking industry." Mr Smith said on a conference call that new leadership is needed to revitalize the bank. He also said the bank sees no need to raise more capital in 2008. Citigroup analysts said the turnaround in the board's view of Mr Thompson will raise questions about what changed at the bank over the past month. Deutsche Bank analyst Mike Mayo warned investors to guard against negative surprises, particularly when Wachovia reports its second quarter earnings. "We continue to have a downward bias to our estimates and this move only heightens concerns about earnings and asset quality problems short-term," Mr Mayo wrote in a note to clients. Analysts at UBS were comforted by the bank's indication that no new financial surprises have arisen, but said Wachovia nevertheless faces pressures that could precipitate a restructuring of the bank under a new CEO. All of those analysts speculated Wachovia would be a good candidate for a sale, though the bank said in its release that it plans to remain independent.
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