Banking

Once a rising star, former Wachovia CFO moves on from banking

Former Wachovia CFO Tim Wurtz
Former Wachovia CFO Tim Wurtz WACHOVIA

Since Wachovia’s near-collapse in 2008, almost all of the Charlotte bank’s former top executives have resurfaced in other finance jobs except for one: its former chief financial officer.

At just 44, Tom Wurtz became Wachovia’s CFO in January 2006, marking him as a rising star at the nation’s fourth-biggest bank by assets. But less than three years later, he was gone, departing shortly before tottering Wachovia was sold to Wells Fargo at the peak of the financial crisis.

Wurtz’s post-Wachovia life has been a mystery even to former colleagues. But court filings in an Iredell County divorce case, finalized last year, offer new details about the path he took after leaving the company.

He moved to Florida, lost hundreds of thousands of dollars at casinos and took a younger girlfriend before his wife, Nanci, filed for divorce, according to allegations in the court filings. At one point, the documents show, he explored buying a Jersey Mike’s Subs franchise.

The divorce case sheds light on the millions of dollars that executives can take home when they leave a big bank, even one struggling to survive. Filings in the case indicate Wurtz planned to retire and live off his Wachovia earnings.

Wachovia’s demise in fall 2008 was a major blow to the Charlotte region, costing shareholders billions of dollars in lost stock value, spurring layoffs for hundreds of employees and battering the city’s reputation as a major financial hub. Wells Fargo bought the bank for about $7 per share, far below previous heights of about $60.

Despite the bank’s spectacular fall, many of its former leaders returned to the financial industry.

Of 18 top Wachovia executives who worked at the bank in 2008, all but Wurtz have turned up in other jobs, according to an Observer count. Fifteen of those executives either stayed at Wells or returned to financial services for some period. Among them, former CEO Ken Thompson works for an investment firm, and his replacement, Bob Steel, leads a Wall Street investment bank.

It’s not clear what motivated Wurtz to leave the industry or whether he’s pursued work since the divorce case. Wurtz did not respond to calls, emails and a certified letter sent by the Observer. Nanci Wurtz and Andrew Wingo, the attorney who represented Tom Wurtz in his divorce, declined to comment.

More than a half dozen former colleagues contacted for this story said they haven’t kept in touch with Wurtz, although they occasionally wonder among themselves what he’s doing. Some said they were surprised by Wurtz’s career turn, while one said the former CFO had indicated that once he made enough money he would leave the business.

Just months after Wurtz became CFO, Wachovia agreed to buy California-based lender Golden West Financial. That gave the Charlotte bank coveted West Coast branches but also a portfolio of mortgage loans that later soured in the financial crisis. Some employees inside the bank later blamed Wurtz for the deal because he once worked for the regulator that oversaw Golden West.

One former colleague said he suspects Wachovia’s travails in the financial crisis weighed on Wurtz.

“It was very hard on him. He cared a lot,” said the executive, who like others spoke on the condition of anonymity to preserve business relationships. “I think it really did bother him that so many different people’s lives were disrupted. I think that’s what ultimately led to his decision to pursue other things.”

Smartest guy in the room

Originally from western New York, Wurtz majored in engineering at West Virginia University but turned to finance, earning an MBA at Arizona State, according to a 2006 magazine article.

In the late 1980s, he worked at the regulator that monitored savings and loans, based in California, before joining California Federal Bank, according to the Business North Carolina article.

In 1994, he moved to First Union – the Charlotte bank that later became Wachovia. He rose to treasurer and then replaced Bob Kelly as CFO in January 2006, when Kelly left to become CEO of Mellon Financial, now known as Bank of New York Mellon.

Inside Wachovia, the soft-spoken Wurtz was known for his sense of humor. He sometimes dressed casually, wearing mock turtlenecks among suited executives.

Multiple former Wachovia executives said Wurtz was often the smartest guy in the room. Deron Smithy, a former Wachovia executive who is now treasurer at Regions Financial, said Wurtz helped him learn the business of managing a bank’s balance sheet, as well as leading a team.

“From an analytical standpoint, he was one of the smartest people I’ve ever been around,” Smithy said. “I learned a lot of technical things. ... But when I look back I could have learned those from anybody. But learning to be a good leader is something I got from him.”

Still, another former executive said Wurtz needed more seasoning compared with Kelly, and his joking sometimes seemed out of place for a big bank’s finance chief. Another former Wachovia executive said Wurtz could come off as arrogant.

Outside the bank, Wurtz didn’t have a high profile in the Charlotte community, although Nanci Wurtz is the founding director of a children’s advocacy center in Iredell County called Dove House.

During his time as CFO, the Golden West deal was a major challenge for Wurtz. Days after the purchase was announced, he held an unusual conference call designed to alleviate the worries of skittish investors.

“The more he talked, the worse it sounded,” said one former Wachovia executive. Wurtz faced the challenge of “defending the indefensible” in the deal, but he also had a lack of credibility with investors, the executive said.

The bank’s stock continued to fall that Friday, ending down 8 percent for the week.

Some former Wachovia executives have suggested former CFO Kelly, who departed Bank of New York Mellon in 2011 after tensions with his board, might have opposed the deal. Wurtz “got some of the blame,” said one former Wachovia employee.

In 2007 and 2008, Wurtz and Thompson would increasingly spend their time talking to investors about rising losses in Golden West’s portfolio, as well as big writedowns in the company’s own investment banking unit. In June 2008, the board ousted Thompson, and Wurtz was gone soon after.

“Wachovia,” Wurtz said in a departing statement, “is an excellent company with a very bright future.”

Within months, Wachovia was on the verge of failure, and Wells Fargo would win a bidding war with Citigroup to buy the bank.

Gambling losses

For his work as CFO, Wurtz was well-compensated.

In 2006 and 2007, he received a total of $5.5 million, including stock awards, according to securities filings, though still far below the $45 million CEO Thompson earned in that period.

His family’s standard of living was “very high,” according to a 2013 judge’s order dividing marital assets. Married in 1988, the Wurtzes lived in a Mooresville home on Lake Norman worth more than $1 million and traveled to Hawaii numerous times, the order says.

Wurtz also “gambled and the family and their friends enjoyed the fruits of complimentary trips to casinos,” according to the order.

When he left the bank, Wachovia did not disclose his exit package, although securities filings said he had a contract that entitled him to severance.

The Wurtzes’ taxable income in 2009 and 2010 totaled $8.1 million, according to another filing. Nearly all of that income stemmed from his exit from Wachovia, the filing states.

Not all of his Wachovia compensation panned out. “Defendant has many stock options but due to the declining stock market said options have no value,” a filing by Wurtz states.

In 2009, Tom Wurtz became a resident of Florida to “avoid North Carolina income taxes,” according to the judge’s order. He spent more than half his time at a home the couple bought in Fernandina Beach, near Jacksonville, according to the filing.

By August 2010, the Wurtzes had separated, according to court filings. Nanci Wurtz alleged her husband had a younger girlfriend that he took on gambling trips to Las Vegas, according to the filings.

From the time the couple separated until February 2011, Wurtz lost at least $598,000 gambling, according to the judge’s order.

In one filing, Wurtz said he had capacity to borrow money at a Hard Rock hotel in Florida, Caesars Palace in Las Vegas and Seneca Allegany Casino in New York. He also said in a filing that he gambled on online websites.

After leaving Wachovia, Wurtz turned down job offers with salaries exceeding $700,000 a year, his wife said in court filings. However, he did investigate buying a Jersey Mike’s franchise, filling out a pre-evaluation form in 2010, according to court filings. Wurtz, in a filing, said he spent two hours looking at a franchise.

The divorce case came to a close after a final appeal last year. The judge awarded Nanci Wurtz $3.7 million in assets. Tom Wurtz received $3.3 million, including the house in Florida. Staff researcher Maria David contributed.

Rothacker: 704-358-5170; Twitter: @rickrothacker

Wachovia severance

Former Chief Financial Officer Tom Wurtz wasn’t the only Wachovia executive to receive severance despite the bank’s near-collapse in the financial crisis.

Ten executives, according to a securities filing, were eligible for a total of $98.1 million in severance after Wells Fargo bought the bank in 2008, although several officials gave up payments by staying at Wells.

The filing didn’t identify the individuals receiving payments, although former CEO Bob Steel, who engineered the Wells Fargo deal, wasn’t one of them. He didn’t have an employment contract when he joined the struggling bank in July 2008.

Separately, former CEO Ken Thompson, whom Steel replaced, took home around $28 million, including stock that was worth about $20 million at the time of his departure, along with pension and deferred compensation, according to securities filings. Rick Rothacker

  Comments