Steel buys a million shares in Wachovia

The man hired to save Wachovia has bought a million shares in the bank, according to regulatory papers filed late Wednesday.

Chief executive Bob Steel spent just over $16 million on shares Tuesday, the day the bank announced an $8.9 billion loss and a turnaround plan. The bank has about two billion shares.

“Wachovia is a great company, and I made the investment because I believe in the core strengths of the organization,” said Steel, a Durham native who became chief executive two weeks ago.

Steel, an alumnus of the U.S. Treasury and Goldman Sachs, was brought in to clean house. He came in after the June 1 dismissal of former CEO Ken Thompson, who was blamed for Wachovia's ill-fated purchase of Golden West Financial two years ago. The bank has struggled with a falling stock price and rising mortgage defaults since it bought Golden West, a California mortgage company known for making exotic loans.

Wachovia's shares rallied 27 percent on Tuesday after Steel detailed plans to fix the bank. Its shares continued to climb Wednesday, closing at $17.65, up 5 percent. But they remain 64 percent below their price this time last year.

In 2004, the year he retired from Goldman Sachs, Steel had compiled 1.6 million shares of Goldman stock, worth around $173 million at the time. Steel could earn up to $22 million a year at Wachovia, though much of his compensation is tied to meeting certain goals for the share price.

When the markets closed Wednesday, Steel had earned $1.56million on his Wachovia investment.