CHARLOTTE, N.C. - Less than a month after he lost his chairman post, and more than two years after an ill-timed acquisition of California mortgage lender Golden West Financial Corp., Wachovia Corp. said yesterday that board members have forced CEO Ken Thompson to retire from the nation's fourth-largest bank.
The board of the Charlotte-based bank said it had asked Thompson to leave a few days ago, and acted Sunday to replace him on an interim basis with Chairman Lanty Smith. Smith replaced Thompson as chairman last month in a move the bank said "strengthens independent leadership" at the company.
But several analysts yesterday wondered if Thompson's ouster means more problems at Wachovia, a bank that has weathered a series of setbacks, including mounting losses and federal investigations, in recent months. The analysts also speculated that Wachovia could be a takeover candidate, though the bank said yesterday that it plans to remain independent.
"Golden West doesn't help," said Nancy Bush, an independent analyst with NAB Research LLC in Aiken, S.C. "Makes you wonder if there's more trouble or change ahead."
The high-priced deal gave Wachovia a means to expand aggressively into the booming home-lending business while also adding hundreds of branches on the West Coast. It also exposed the bank to collapsed housing markets and has led to billions in loan losses that continue to build.
Shares of the bank's stock have fallen 58 percent in the past year. Wachovia shares lost 40 cents, to close at $23.40 yesterday.
Thompson, 57, is the latest financial-services executive to be ousted amid turmoil in the U.S. housing market.
Thompson, who has spent his 32-year career at the bank, won't get any incentive pay for the 2008 fiscal year, but according to a filing with the Securities and Exchange Commission, he will get a severance of $1.45 million and accelerated vesting of $7.25 million in restricted stock. *