Wachovia chief asked to leave by board

G. Kennedy Thomson is retiring after the board asked him to leave in the wake of bad acquisitions and weak financial results.

G. Kennedy Thomson, the chief executive of Wachovia Corp. is retiring after the board of directors asked him to leave in the wake of write-downs, bad acquisitions and weak financial results.
The Charlotte, N.C.-based bank named Lanty Smith, its chairman, to the position of interim chief executive.
Ben Jenkins, vice chairman and president of the general bank, was tapped to serve as interim chief operating officer.
“No single precipitating event caused the board to reach this decision, but a series of previously disclosed disappointments and setbacks cumulatively have negatively impacted the company and its performance,” Mr. Smith said in a statement.
“The board believes new leadership will help to revitalize and re-energize Wachovia and enable it to realize its potential.”
Mr. Thomson had served as chief executive since April 2000, and held the title of chairman until last month (InvestmentNews, May 9) .
He joins a growing number of corner office executives who have been ousted since the subprime mortgage crisis began and the credit shortage hit the nation’s largest banks last summer.
Since then, Citigroup Inc.’s Charles O. Prince III and Merrill Lynch & Co. Inc.’s E. Stanley O’Neal have left their posts. Both firms are located in New York.
Wachovia posted a $708 million loss in the first quarter from write-downs connected to life insurance policies and an agreement to pay up to $144 million to settle claims of abusive telemarketing practices. It is the subject of a probe into possible money laundering.
Mr. Thomson was criticized for the bank’s $24.2 billion purchase in October 2006 of Golden West Financial Corp., an Oakland, Calif.-based mortgage specialist and savings and loan (InvestmentNews, Oct. 2, 2006) .
Mr. Smith will head a committee to search for a new chief executive, the bank’s statement said.