Ken Thompson on the Hot Seat? Finally, Someone Said It
The aftershock of Wachovia's bad news on Monday is still reverbrating around the city today. The tremors weren't lightened any when the Observer's Rick Rothacker reported in today's paper that some analysts say that CEO Ken Thompson is on a "short leash" and that his job may ultimately be in danger. Analysts quoted in the Wall Street Journal were more direct:
"I will never touch [Wachovia shares] again. I think there are a lot of people who feel the same way," said Nancy Bush, a longtime banking analyst who runs NAB Research LLC in Aiken, S.C. "This board has to somehow give the Street a sign that there is a lesson learned here."
"This has been going on for 25 years," complained Joseph M. Gordon, who manages about $250 million at Gordon Asset Management in Durham, N.C. "The board needs to get very activist and say: 'Do we have confidence in him, or is it time for him to go?' I would vote for the latter."
These quotes in particular speak to Wachovia's purchase of California-based mortgage lender Golden West. It got Wachovia a West Coast presence, but at a huge cost, literally. That purchase came at the height of the mortgage market, which has tanked since then. The deal was slightly questioned at the time, and of course now it looks like a terrible one. And CEOs tend to pay for bad deals.
It would be terrible for Charlotte if Thompson were to be deposed. He's a very active leader in town. He's slated to be the next chair of the board for the Foundation For the Carolinas, and he's been instrumental in getting the South Tryon arts complex going. And he's a good guy. I hope this one bad deal doesn't turn out to be his downfall.
Meanwhile, Bob Johnson cried to the Observer today about the lack of support the business community has given the Bobcats. Maybe he should read the paper more often. As I bet Ken Thompson and BofA's Ken Lewis would tell him, I think Charlotte businesses have more pressing matters to deal with than drumming up support for a struggling NBA team with a more or less absentee owner.