Wachovia CEO takes the walk of shame
June 2, 2008 by Tisa Silver
Filed under Finance
Wachovia CEO Ken Thompson opted for an early retirement, succumbing to pressure from the recently troubled bank’s board of directors.
Thompson began work at Wachovia’s predecessor, First Union, in 1976 and assumed the role of CEO eight years ago.
In 2006, Thompson orchestrated the purchase of Golden West Financial, a seller of “option” adjustable rate mortgages, which allow homeowners to pay less than their full monthly mortgage until the balance reached a certain threshold. The purchase raised Wachovia’s risk exposure to the housing market downturn and proved to be a costly mistake.
The board’s disdain reached a peak after a series of unfortunate events…
In April, the company announced a 41% cut in quarterly dividends after posting an unexpected loss of $350 million for the first qurater. Soon after, that number was later revised to DOUBLE the original amount.
After factoring in job cuts and a new stock issue, shareholders would be within reason to suggest change.
Mr. Thompson leaves with $1.45 million in severance pay and $7.25 million in stock awards.
