Wachovia Corp. (NYSE: WB) Chief Executive Kennedy Thompson was living on borrowed time. The company, though, had a funny way of showing it.In 2007, Thompson was not awarded cash incentives or performance-based stock to Thompson because things were going poorly. Or were they?
"The Compensation Committee considered that while 2007 performance did not meet expectations for reasons noted above, under Mr. Thompson's leadership, earnings per share growth and Wachovia's tangible return on equity have been at or above the median of its peer group for 2007 and for the 3- and 5-year periods ending December 31, 2007," the company said in its latest proxy statement.
The company's board showed its displeasure and granted him premium priced stock options valued at $8.2 million. His total compensation was more than $21 million. Thompson did not have an employment agreement with Charlotte-based Wachovia and therefore would "only" be eligible for a severance of $1.45 million based on his years of service as of December 31. But don't shed a tear for Thompson.
Since Wachovia's performance exceeded its peers for the three-year period ending December 31, 2006, Thompson received a stock award valued at $15 million. In 2005, he got a cash incentive award of $5 million and a stock award valued at $14 million, according to the proxy.
Remember that under Thompson's leadership, Wachovia's shares plunged more than 58%. As Bloomberg News notes, his credibility was "dented" after he said earlier this year that the company's $24 billion purchase of Golden West was "ill-timed." Furthermore, the bank reported a higher-than-expected first-quarter loss, cut its dividend by 41% and raised $8 billion.
Once again, shareholders lose while overpaid chief executives win. This is a disgrace.
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Reader Comments (Page 1 of 1)
6-02-2008 @ 11:26AM
james-al said...
We always act so surprised, offended or outraged by these type of events. These really are not bad people just people who have not learned when to stop trying to fix something that is not broken. As educated as they all are they forget the basics. One of the best is the rule of large numbers. In financial services trying to merge banks and investment houses was doomed from the start. The mind set of the two are diametricaly oppossed and there is not a way to successfully blend the two types of business. Sadly, every employee on both sides told them but arrogance won out.
6-02-2008 @ 11:27AM
Ronald Chambers said...
With this country in the mess that it's in, tt looks like the shareholders of large companies are becomming more aware of the performance -- or non-performance --- of the CEO's. Perhaps this is one good thing to come from the countries economic decline. We can start to take back this country by seeing that CEO's like Thompson are removed BEFORE they due so much damage to the company instead of receiving large bonuses for doing nothing.
6-02-2008 @ 12:20PM
tom said...
Wachovia, You have lost us as customers.
Cncling CC;moving CD, closing Bank accounts; and selling 836 shares of common stock at the appropioate time. Plus- all the negative comments we can make.
Take that and chew on it!!
6-02-2008 @ 1:32PM
Miller said...
I hope this is the starting process of lower CEO and Executive pay across the nation because they have all been overcompansated for years. I have no sympathy for the greedyThompson but he is just one of many greedy CEO's. I blame this on the Board's of companies nationwide for not doing their jobs.
6-02-2008 @ 3:00PM
Bill said...
And the beat goes on!!
6-02-2008 @ 3:36PM
tim said...
I'm proud of this CEO, he used the system to his advantage, we should all be so lucky...also taught shareholders some valuable lessons on which you can't put a price. Less trust in CEOs, check! Less trust on Wall Street, check! Good work, very happy ending for everyone involved!
Tim
http://www.timothysykes.com
6-02-2008 @ 6:15PM
RJ said...
IT'S SIMPLE ! ! ! GET YOUR MBA FROM A GOOD SCHOOL ; GET YOUR LAW DEGREE ; BECOME A LARGE CORPORATE CEO ; THEN SCREW THE LITTLE MAN OUT OF HIS HARD EARNED MONEY ! ! ! !
6-02-2008 @ 6:19PM
Sharon said...
I don't understand how these CEOs when they get ousted get these million dollar payouts when they made the co lose millions and billions of dollars. Why are they being rewarded?