Wachovia Ousts CEO Thompson

Wachovia Corp. ousted Kennedy Thompson as chief executive officer of the fourth-largest U.S. bank after the board blamed him for losses that cost the lender more than half its market value in the past year. The stock fell as much as 4.5 percent.

Chairman Lanty Smith was appointed interim CEO, the Charlotte, North Carolina-based company said today in a statement that cited “a series of previously disclosed disappointments and setbacks” for the change.

Separately, Washington Mutual Inc. said its CEO will step down as chairman.

Wachovia stripped Thompson, 57, of the chairman’s title on May 6 after shareholders — incensed by the company’s first quarterly loss since 2001 — demanded his removal at April’s annual meeting.

A four-member search committee headed by Smith will seek a replacement to deal with fallout from rising mortgage defaults and writedowns tied to subprime home loans.

“This company was run under Ken Thompson without very good controls,” Gerard Cassidy, an RBC Capital Markets analyst, said in a Bloomberg TV interview. Chances are even that Wachovia will seek a new CEO from outside the bank because there isn’t a clearly designated successor, Cassidy said.

Source: By Real Estate Mortgage http://blownmortgage.com/