After two months of vehemently defending the performance of Wachovia Corp. CEO G. Kennedy Thompson, the company said Monday that board members have forced him to retire from the company he has run for eight years.

Mr. Thompson, 58 years old, has spent his 32-year career at the bank. He has been CEO for eight years and chairman for most of that period.


Associated Press
Ken Thompson
He was replaced as replaced as chairman in early May by lead independent director, Lanty L. Smith. But the board backed him in strong terms, insisting the move merely allowed Mr. Thompson to spend more time running the day-to-day operations of the Charlotte, N.C., company. The company said its move would, in part, strengthen its "independent leadership," as recommended by shareholder advocates.

But Mr. Thompson has been under fire for months. Wachovia posted bigger-than-expected losses in April, battered by sinking credit quality and the ill-timed acquisition in 2006 of Golden West Financial Corp., the Calabasas, Calif., mortgage lender. Wachovia's move in April to slash its dividend by 41% also angered shareholders, who had previously taken a forgiving tone towards Mr. Thompson.

MORE ON WACHOVIA


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04/26/08The latest move effectively put all of Wachovia's staff functions under Mr. Smith, who also serves as chairman and CEO of North Carolina merchant bank Tippet Capital. Mr. Smith has been a Wachovia director since 1987 and currently chairs the executive committee. He also now will head a board committee that has been formed to search for a permanent CEO, who may come from either inside or outside the company.

Ben Jenkins, who runs the general bank division of the retail giant, has also been named as interim chief operating officer. The firm's four lines of business -- general bank, wealth management, corporate, and investment bank and capital management -- will report to Mr. Jenkins.

In a statement, Mr. Smith said Mr. Thompson "has led the company with the highest integrity, loyalty and dedication," while noting "No single precipitating event caused the board to reach this decision, but a series of previously disclosed disappointments and setbacks cumulatively have negatively impacted the company and its performance."

Mr. Smith added, "Our recent successful capital raising actions provide us the solid foundation and flexibility we need in an environment which remains extremely challenging for Wachovia and the entire banking industry."

Well, it seems that with some many right downs in a financial sector, the hurricane is not over yet. However, some analysts already claimed that we reached a "puke point", i.e. the worst is over.

We will see!