WaMu, Wachovia Make Changes at the Top

Two major financial institutions announced this morning changes at the top, with thrift Washington Mutual reducing its CEO’s powers and Wachovia firing its chief executive.

Charlotte, N.C.-based Wachovia announced this morning that CEO Ken Thompson had retired at the request of the bank’s board.
Current board Chairman Lanty Smith will fill the slot on an interim basis. Just last month, Wachovia took the chairman title away from Thompson and gave it to Smith.

Smith told reporters that, “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.”

 Wachovia reported a $708 million loss for the first quarter, said it would take a charge up to $1 billion in the second quarter following a court ruling on its treatment of certain lease transactions. Wachovia paid more than $24 billion for California-based mortgage lender Golden West Financial Corp. near the peak of the real estate market.

Wachovia’s market capitalization has fallen to $47.4 billion last week from $96 billion in May 2006 when it reported it would buy Golden West.

Washington Mutual, known as WaMu, reported that CEO Kerry Killinger next month would relinquish his post of chairman of the board. Independent board member Stephen Frank will replace Killinger on July 1.

Seattle-based WaMu also announced changes in the make up of several of its board committees and that it was seeking independent directors. WaMu reported assets of $319.7 billion at the end of the first quarter.