Ken Thompson

What's up with Wachovia?

Jim Kim — Tue, 24 Jun 2008 21:41:05 -0400

First a CEO, now loan portfolios? After Wachovia ousted Ken Thompson, it reportedly hired Goldman Sachs to help it find a new CEO--an odd move to be sure, given the executive headhunting specialists out there. Now comes word that Wachovia has hired Goldman again, this time to advise on its loan portfolio. True, Goldman's moves with the SIV formerly known as Cheyne Finance suggest it has some savvy in this area. On the other hand, you have to wonder if there's more going on. Are we moving toward Goldman being retained by Wachovia to find a buyer? That's not out of the question. JPMorgan Chase has been rumored to be interested, as Wachovia's stock tanks.

For more:
- here's the article

Countrywide to be Ken Lewis's undoing?

Jim Kim — Sun, 08 Jun 2008 10:35:21 -0400

The sacking of former Wachovia CEO Ken Thompson shows how one deal really can blow a guy's career. True, Wachovia had run into considerable problems, but the bank's ill-timed Golden West deal was the final straw for the board. Will the Countrywide deal wreak the same sort of havoc (except on a grander scale) at Bank of America? Ken Lewis, CEO of Bank of America, remains convinced the bet will pay off. But there are many reasons to doubt him. The mortgage business remains uncertain, to say the least. The New York Times takes a long look at Countrywide's loan servicing business. Once the company's crown jewel, it has also run into some thorny problems that will be hard to fix. The jury's still out. We've said all along that Lewis has bet his career on the deal.

For more:
- here's the New York Times article

Thompson's legacy at Wachovia

Jim Kim — Thu, 05 Jun 2008 08:21:25 -0400

Ken Thompson's career was built on savvy deals only to be undone by a single deal. The make-the-man deal was First Union's merger with Wachovia. As CEO of First Union, Thompson struck a savvy deal that paid Wachovia shareholders a middling premium; he also retained the Wachovia brand. Another deal added Prudential Financial's brokerage staff to Wachovia without having to pay a dime. The deal that overshadowed all, however, was his disastrous plunge into the California mortgage market at exactly the worst time. In hindsight, the $26 billion deal for Golden West was either going to make him or break him. Wachovia would end up an elite bank, or Thompson would have to pay. The board made him pay.

For more:
- here's the Business Week article

Washington Mutual board makes big changes

Jim Kim — Mon, 02 Jun 2008 21:31:21 -0400

The board of Washington Mutual is getting busy, as it should. It certainly doesn't want to be seen as a done-nothing sort of board that fiddled while the company burned. It announced that it has stripped controversial CEO Kerry Killinger of the chairman title. This is somewhat foreboding. Recall that Ken Thompson of Wachovia was similarly stripped before he was ousted outright. The WaMu board also issued a requirement that directors receive a majority of votes. And it named key outside directors as chairmen of the finance, governance and corporate relations committees. It also said it wants to hire more outside directors. Will this be enough? The jury is still out, but the at least the board is making the right moves.

For more:
- here's the release

Wachovia CEO is ousted

Jim Kim — Mon, 02 Jun 2008 08:56:35 -0400

Another CEO bites the dust. Analyst Richard Bove was among those who predicted that G. Kennedy Thompson, CEO of Wachovia for the past 8 years and employee for more than 30 years, would be sacked. In hindsight, it seems like an easy call. No board right now wants to be seen as going easy on the top guy in the face of a plethora of troubles. The deal for mortgage giant Golden West at the top of the market will likely be his undoing. Of course here were some great deals over the years; First Union and A.G. Edwards come to mind. But the credit crunch outweighs all right now. The New York Times notes a host of other issues, its life insurance woes, iffy telemarketing alliances and even a money laundering situation. Will this be the last of the CEOs to get canned in the wake of the credit crunch? We'll see. As for the new CEO, let the speculation begin.

For more:
- here's the article

Will CEO turmoil continue?

Fri, 18 Apr 2008 06:59:56 -0400

We've seen a lot of high profile CEO lose their jobs. Stanley O'Neal. Chuck Prince. Jimmy Cayne. But at least one MarketWatch commentator thinks at least two other fairly big name CEOs ought to be similarly shown the door. He says that Ken Thompson, of Wachovia, and Kerry Killinger, of Washington Mutual, "were exposed as overhyped pedestrian CEOs this week." Ouch! PR folks, do something. Killinger was rapped for the $1.1 billion loss and the required dilutive $7 billion capital infusion from private equity investors. Thomson was pilloried for the disastrous Golden West purchase. The jury remains out on several CEOs, including Ken Lewis of Bank of America, who's betting big on Countrywide.

For more:
- here's the commentary