Billions of dollars in losses and a falling stock price can cost a CEO his job. Wachovia (WB) announced today that its current Chairman, Lanty Smith, has been appointed interim Chief Executive Officer, succeeding Ken Thompson, who is retiring at the request of the Board.
The bank’s stock has dropped from a 52-week high of $54.95 to $23.80, near a one-year low.
If the firing begins a trend, a number of bank and investment firm chiefs could go this summer. No one should be surprised if John Mack is pushed out a Morgan Stanley (MS) if it has a poor Q2. The investment bank’s share are off by half ove the last three quarters and the firm has already fired its president.
Richard Fuld could be let go at Lehman (LEH). The brokerage’s shares are off 60% and he has indicated the worst is behind his firm. That better turn out to be true.
The other prime candidate for a sacking is Ken Lewis at Bank of America (BAC). The money center operation has a share price at its bottom and investors are unhappy about its buy-out of Countrywide (CFC).
Boards don’t want investors suits, so they need to find someone to blame.
Douglas A. McIntyre