Ex-CEO at fault for bank's fate?
Former Wachovia chief Ken Thompson's past judgment, particularly with regard to the purchase of Golden West, is debated in light of company's sale this week.
10/01/2008 12:00 AM
02/03/2015 11:06 AM
Ken Thompson didn't want to talk Tuesday when he answered the door at his Charlotte home.
But many in the community were talking about him.
“Everybody has always had a lot of respect for him as a human being, as a man, as a banker,” said Charlotte Chamber chair Pat Riley. “Best I can guess, from the bleachers, is he got caught up in looking at opportunities through rose-colored glasses.”
Some spoke highly of the former Wachovia chief executive, who is currently chairman of the board of the Charlotte-based Foundation for the Carolinas. Others questioned his judgment and blamed him for this week's sale of his former bank.
“Ken's ears have got to be burning,” said the wife of a retired Wachovia executive, who didn't want to be quoted criticizing her husband's former employer. “Nobody wants a sizable chunk of money to go down the drain. This was not a happy thing.”
It was Thompson's decision, with board approval, to buy mortgage specialist Golden West Financial in 2006. The deal proved disastrous and faced immediate investor backlash because the housing market was showing signs of slowing.
In June, Thompson was forced to retire by the board after eight years at the helm and 32 years at the company.
His exit package was modest compared with the huge payouts of some top executives forced from their jobs by dismal company results. He received severance pay of $1.45 million, the equivalent of 16 months' base salary. He also got office space and the services of an executive assistant for up to three years.
He has likely suffered heavy stock losses since his June 1 departure. A securities filing dated June 4 showed that he and family members held a total of 820,869 shares of Wachovia stock. Immediately prior to his ouster, those shares were worth more than $19.5 million. At Tuesday's closing price of $3.50, they were worth $2.87 million.
Business and civic leaders said this week that the CEO doesn't act alone making decisions. Thompson chaired a board that voted to buy Golden West.
“We ought to ask about the board,” said Hugh McColl Jr., retired CEO of Bank of America. “Nobody does anything in a vacuum.”
High Point businessman Robert Brown, who was on the Wachovia board that approved the Golden West deal, agreed that board members share the burden of the decision with Thompson.
“We all have some responsibility and some remorse for what has happened,” he said Tuesday, adding that no one had a crystal ball to predict the massive foreclosures that were to come.
Former University of North Carolina system president C.D. Spangler said it's important to remember the success Thompson brought to Wachovia.
“He was part of the team that helped build first Union and Wachovia into a major national strength,” said Spangler, who lives near Thompson in Charlotte's upscale, tree-lined Eastover neighborhood.
In online responses to the Observer's Wachovia stories, some readers expressed anger at Thompson and the board, raised prospects of shareholder lawsuits and criticized Thompson's vetting of the Golden West deal.
Spangler knows there are those who believe Thompson and the Wachovia board should have foreseen problems the Golden West deal would bring.
“My experience is,” said Spangler, “that it's almost impossible to see these things.”
Stella M. Hopkins, Rick Rothacker and Kerry Hall contributed.
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