Wachovia

  • 02 Jun 2008 at 5:24 PM
  • Banks

Is Washington Mutual’s CEO Next?

This morning we asked whether the firing of Ken Thompson would lead to a new bloodbath at the top of our financial institutions. A few hours later Washington Mutual took away the chief executive Kerry Killinger post as chairman of the company’s board. Killinger has been running as a close second to Thompson as the most despised chief executive running a bank. There’ve been many calls for his head upon a platter. So how long has he got?
Felix Salmon reminds us that there were just 24 days between Thompson losing his chairmanship of Wachovia and his firing.
“At that rate, Kerry Killinger … is likely to be fired on June 26. Mark your calendars!” Salmon writes.

Whither WaMu’s Killinger?
[Portfolio]

  • 02 Jun 2008 at 4:39 PM
  • Wachovia

Ken Thompson Thanks Wachovians On His Way Out The Door

As his last day at Wachovia wraps up, Ken Thompson decided to send a note to all of Wachovia’s employees, thanking them for putting their “extraordinary talent” to work for him. It didn’t work out so well but there’s nothing to gain in pointing fingers now.
Presumably his ability to send firm wide emails will be revoked shortly. Read the parting words after the jump.

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We can’t get enough of the downfall of Ken Thompson, the as-of-this-morning former chief executive of Wachovia. Thompson hoped to preside over the growth of the bank into a universal banking powerhouse. Instead, he nearly ran it into the ground.
This morning Lanty Smith, the chairman of the company, also took over as interim CEO. One of his first duties was to send an email to Wachovia’s employees. Read the email after the jump.

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  • 02 Jun 2008 at 2:52 PM
  • CEOs

What Will Become Of Wachovia’s Ken Thompson?

This morning Wachovia shocked everyone by unceremoniously firing Ken Thompson, the ambitious corporate leader who wanted to make Wachovia into a domestic version of Citigroup. He might wonder if he succeeded too well, now that he has met the same fate of Citigroup’s one-time head, Chuck Prince.
So what will Thompson do now that he’s been tossed out for over-promising and under-delivering? We’d like to suggest that Ken take his cues from some of the other Wall Street kings who recently lost their thrones.

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Following an 80 percent drop in third quarter investment banking profits, Wachovia Bank has asked about 200 workers from its corporate and investment banking units in Charlotte, North Carolina and New York to stop coming in to the office. Apparently the severance package for first year analysts is 85K. Will 93-percent-decline-in-profits-from-investment banking-and-sure-to-be-letting-at-least-one-million-employees-go Bank of America do better? We’ll let you know (or you’ll let us know. Either way, information will be transmitted.)
Wachovia starts investment bank job cuts [Reuters]

Wachovia said today that it wrote down $1.3 billion in loans and other securities in the third quarter, which contributed to a profit decline of ten percent. WB’s net income was $1.69 billion (89 cents/share), down from last year’s $1.88 billion ($1.17/share). Analysts had predicted that the bank would perform worse, quarter-on-quarter, but had underestimated how much worse, forecasting earnings of $1.03 per share. Investment banking declined a respectable (compared to 93 percent) 80 percent, to $105 million, from last year’s $533 million. Chief Executive Officer Kennedy Thompson called the results “disappointing,” especially for those Wachovia employees who will be laid off as a result.
Wachovia’s Net Falls 10% On Loan-Loss Provisions [WSJ]

Star Wars Aficionado vs. Wall Street

obiwan.jpgRegistered Rep mag profiles Mark Theirman, a class action lawyer (it’s Class Action Day at DealBreaker) and ginormous Star Wars fan who is bringing suit against several large financial services firms for failing to compensate brokers for overtime work:

Thierman is now bringing his legal campaign east, with about 35 more class-action lawsuits, including some in New York, New Jersey and Pennsylvania. The list includes nearly every firm you’d expect, and then some: A.G. Edwards, Bear Stearns, Merrill Lynch, Morgan Stanley, Smith Barney, Edward Jones, Wachovia Securities and Raymond James & Associates. Thierman estimates that the suits represent about 100,000 brokers, past and present.

A few firms have settled with Thierman, while simultaneously arguing that they’re exempt from the Fair Labor Standards Act of 1938. In our totally inexpert opinion, they probably are, but we have trouble taking a guy with Obi-Wan vanity plates seriously in the first place.
Wall Street Wage Fight [RegisteredRep.com]