Wells Fargo & Co (NYSE: WFC) announced that Richard Kovacevich will step down as chairman of the bank at the end of 2009 after staying an entire year beyond the company’s mandatory retirement age so that he could oversee Wells Fargo’s takeover of Wachovia Corp.
Wells Fargo’s Chief Executive Office, John Stumpf, will assume the role of chairman as of January 1st, 2010. Stumpf will maintain the duties of his current role as CEO. Stumpf, age 56, took over as CEO in 2007 when Kovacevich stepped aside.
In November of 2008, Wells Fargo & Co waived Richard Kovacevich’s mandatory retirement so that he could manage the merger of Wachovia and Wells Fargo. Kovacevich, age 65, engineered the deal by providing a more competitive bid than Citibank, who was widely expected to take control over Wachovia.
At the time, Wachovia was near bankruptcy because of significant losses tied to adjustable rate mortgages. Just as the federal government was engineering a buyout with Citibank, Wells Fargo under Kovacevich’s helm stepped in and provided a more competitive bid that would not require the federal government to layout any taxpayer funds. The Wachovia deal was Kovacevich’s biggest-takeover since he led Norwest Corp’s purchase of Wells Fargo back in 1998. During the deal, Kovacevich met with Wachovia’s CEO, Robert Steel, who worked with regulators and pressed Wachovia to sell to Wells Fargo.
Most analysts are neutral about the transition of leadership. In a recent Bloomberg article, Jennifer Thompson, analysts at Portales Partners LLC in New York stated, “We’re past crisis mode for the banking sector so I think the timing makes sense.” Portales Partners currently gives Wells Fargo a “hold” rating.
