Just when you thought it was safe to go back in the water… Wachovia CEO Ken Thompson has been gobbled up in a subprime shark attack after 32 years with the company.
“The Board believes new leadership will help to revitalize and reenergize Wachovia and enable it to realize its potential,” said the excellently-named interim CEO Lanty Smith.
Ken will now join Citibank’s Charles Prince, and Merrill Lynch’s Stanley O’Neal at the failed CEO pool party.
Wachovia’s woes, however, have only surfaced recently. In mid-April, the nation’s fourth-largest bank reported a surprising first-quarter loss of $350 million – hurt, in part, by its ill-timed 2006 acquisition of California mortgage lender Golden West Financial Corp.
Shortly thereafter, the company drew the ire of its shareholders by announcing plans to raise $7 billion in capital through a stock offering and to slash its quarterly dividend by 41%.
Thompson defended the actions at the time, saying the capital raising was done to gird the company’s balance sheet against a protracted downturn in the housing market.
The news only got worse last month when Wachovia restated its losses. The company said its losses were, in fact, closer to $708 million following a review of its life insurance portfolio.
Meanwhile, it looks like Kerry Killinger, WaMu’s CEO, is gonna need a bigger boat. The company said it would split the role of chairman and chief executive…which is exactly what Wachovia did to Thompson before dropping him.
Wachovia CEO out at board’s request [CNNMoney](Thanks, Evan!)