Have Wachovians found their hero? Many are worried, but they're not panicking, say my peeps who peep at The Jukebox Building. The main reason? Bob “Iron Man” Steel, is a “very experienced, calming and in-control force during a rocky time” says an insider. Iron Man held a reassuring call with senior leaders Tuesday, I'm told. But can his mettle address the leaden stock? Meanwhile, many wonder about their long-lost “kin.” What is Mr. Thompson up to?I'd been skeptical of Steel as a savior simply because I wasn't convinced Wachovia could have been saved as a stand-alone bank by the time he'd arrived on the scene (even housewives can do some research). Events were too far gone. And he didn't have the makings of a hero to me; in fact he seemed quite slippery. See here and here.
At the advice of a reader, I probed a little more into Steel's past career, as this was never really properly explored by our Charlotte media -- mentioned yes, explored no. Here's what I found.
It's a ''private market-oriented situation,'' he said, referring to attempts by banks to work out plans to capitalize companies such as Ambac Financial Group Inc. that insure municipal and asset-backed bonds.
Of course, when Steel was at the Treasury, he was also the chairman of the Board at Duke University. The Washington Post contended in Treasury Undersecretary's Dual Roles Raise Questions that it was ethically-challenging to hold these these two posts simultaneously.
(My comment - Conflict of interest...hmmm!?)
I lay this all out as I read today in our Observer, "Ex-CEO At Fault for Bank's Fate." Ken Thompson is thrown under the bus. He put Wachovia on the national map, but did make the grave error in purchasing Golden West and thus sealed the eventual end of Wachovia. When Thompson was fired by the Wachovia's Board, its stock was trading at $22.80.
Did Steel attempt to sell Wachovia at a Merrill Lynch-style, discount before Washington Mutual collapsed? I don't know. We do know there was a "bid" by Wachovia for Morgan Stanley. (How exactly would that have happened? Unsuccessful bluff, more like it.)
Posts
1 comment:
Charlotte Mom,
This is your best post to date.
Bob Steel was entirely the wrong choice to lead Wachovia and the best reason that Lantie Smith be immediately removed from the board. Lantie's selection, based on his longstanding friendship with Steel is the kind of back room maneuvering that most large corporations eliminated decades ago. Where was the rest of the board when all this when on and what were they thinking when they decided to pick a new leader in the midst of an industry meltdown, and to pick someone who had no experience in commercial banking. The man was rich and well conected, but he had no experience whatsoever. Perhaps Smith felt that was OK because he had just appointed himself interim CEO and his only CEO experience was running a textile mill (and we wonder why the folks in NY consider us a bunch of rubes).
Bob Steel was graciously pushed out of GS after he hit a ceiling, several levels below CEO. He was given the title of Vice Chairman (a title used at GS for several other moderately active, but customer-connected execs). His tenure at Treasury was marked by several strike outs that you correctly note, but also included his original plan to the GSE's that fell apart before launch.
Bob came to town with a massive comp package ($38MM first year) heavily weighted in stock and then promptly bought $16MM more. Nice move, until he boldly declared that the company was sufficiently capitalized and would not raise any more. Think he might not have wanted to dilute his new WB shares???
As time went on it was clear to many that Bob was the wrong guy at the wrong time, but never was that more apparent than when with WB fighting for its life but with a reasonable chance of surviving, that he declares he wants to buy MS (with Mack leaving and Bob as CEO). That when you could have heard WB taking it's last deep breath, if it hadn't been for all the boys on Wall Street choking with laughter.
This is a sad story.
Ken Thompson deserves a lot of the credit for saving WB after the Money Store debacle and then building it in to a powerhouse. He also deserves the the blame for the terrible acquisition of GW which was the major contributor to the company's demise. You can't haelp but wonder however, if the compny wouldn't have been better off by telling Lanty to hit the road instead of Ken. If only Bob Steel was nothing ore than a short but disturningly bad dream.
Post a Comment