How does Thompson right Wachovia's ship?
Source: Charlotte Observer (Original Article)
How does Wachovia chief executive Ken Thompson, taking heat for a troubled acquisition and a litany of recent miscues, turn things around?
Analysts say he needs to fix his mortgage company, beef up controls of the bank’s business practices and restore frayed investor trust. Perhaps most importantly, he needs the torrent of bad news flowing from the company in recent weeks to dry up.
The job will take a while, but isn’t as daunting as the one Thompson faced when he took over predecessor First Union in 2000 and shut down a subprime lending unit and slashed jobs, analysts said. Such dramatic changes aren’t expected. It’s also not the major overhaul that awaits troubled Citigroup, which last week announced plans to shed $500 billion in assets.
The question now is whether Charlotte-based Wachovia can make the right moves — and whether Thompson can keep his job through the turmoil. On Thursday, the bank’s board voted to remove his chairman title, handing the post to independent lead director Lanty Smith.
The bank said the move gives Thompson more time to focus on running the company, while some analysts saw it as a rebuke of his leadership.
Starting with Thompson’s presentation today at a conference in New York, investors will be seeking answers about the direction of the nation’s No. 4 bank by assets. The bank said Thompson was unavailable for comment for this story. But at the annual shareholder meeting, he touted the company’s strong “core businesses.”
Wachovia’s retail bank posted $5.5 billion in profits last year and is known for sterling customer service. Brokerage and wealth management businesses are faring well. The corporate and investment bank, which plans 500 more job cuts, is getting squeezed by the credit crunch but some areas in this unit are healthy.
Last month, Thompson said the company, which employs more than 20,000 in Charlotte, had already taken painful but needed actions St George No Annual Fee Card to prepare it for a weakening …continue reading