Wachovia Throws CEO Overboard

Posted by John Carney, Jun 02, 2008, 9:32am

The board of Wachovia has ousted Kennedy Thompson as chief executive, blaming him for losses that have cut its market cap in half over the past year. Chairman Lanty Smith has been appointed interim CEO, effective immediately.

Although Wachovia is saying that "no single event" brought about the firing of Thompson, the purchase of Golden West Financial in 2006 is sure to be blamed by most. As you might guess by the name "Golden West" about half of the unit's lending is in California and Florida, two states that both might consider their motto to "the Foreclosure State."

Of course taking a $708 million loss for the first quarter probably didn't help things. Wachovia recently was forced to raise $8 billion in capital to help weather the mortgage slump. That's the kind of thing that keeps the institution alive but tends to piss off existing shareholders.

Next question: is Thompson's ouster the start of a second round of c-suite executions?

By the way, the announcement of the Golden West buy pushed Lehman Brothers, which advised Wachovia, from 15th to 2nd place among M&A advisors to financial companies on deals announced in 2006. Good work, Lehman.


Wachovia ousts CEO Thompson after losses mount [Reuters]

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Comments

Posted by guest, Jun 02, 2008 9:41AM

totally related to the capital raise

Posted by guest, Jun 02, 2008 9:46AM

Weird things. I saw a bus in NYC yesterday the whole side of the bus was a painted ad that said "World Savings Bank is now Wachovia"

who the fuck on the east coast even knows what WSB is? There were no GDW branches within thousands of miles of here.

Posted by guest, Jun 02, 2008 10:03AM

There were World Savings Bank branches in New Jersey and Long Island.

Posted by guest, Jun 02, 2008 10:12AM

Oh, retracted!

Posted by guest, Jun 02, 2008 10:27AM

Looks as if Golden West gave Mr. Thompson a Golden Shower. Let's hope he had a nice Golden Parachute.

As hard as BAC and Wachovia strive to be big boy banks, you can't miss the training pants they both wear to prevent anal leakage.

The folks at CFC and Golden West thank the kind people from Charlotte for keeping their poopy banks solvent.

Posted by guest, Jun 02, 2008 10:27AM

Looks as if Golden West gave Mr. Thompson a Golden Shower. Let's hope he had a nice Golden Parachute.

As hard as BAC and Wachovia strive to be big boy banks, you can't miss the training pants they both wear to prevent anal leakage.

The folks at CFC and Golden West thank the kind people from Charlotte for keeping their poopy banks solvent.

Posted by Anal_yst, Jun 02, 2008 11:11AM

Next up: Ken lewis, anyone wanna take over/under, i'll set it at November, takers?

Posted by Investorcluzo, Jun 02, 2008 12:11PM

@anal_yst: agreed, kenny lew is the next to go. bofa's stock price says it all ($52 in oct, $33 today). shareholders are screaming for change. ironic that neither charlotte bank could break into the buldge no matter how hard it tried and both are headed by a guy named "ken"...

Posted by guest, Jun 02, 2008 12:42PM

I guess he wasn't Wachovia assets. I mean he wasn't Wachinovia assets

Posted by guest, Jun 02, 2008 1:05PM

"As hard as BAC and Wachovia strive to be big boy banks, you can't miss the training pants they both wear to prevent anal leakage."


Doesn't firing the CEO and writing off billions prove that they ARE big boy banks? Like Merrill, UBS, Bear, and others to come?

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