< Previous page

Activists had called on the bank as recently as last year to divide the chairman and CEO roles, but management opposed the change and shareholders voted down the proposals. Shareholders at Charlotte-based Bank of America rejected such a split this year; the bank has a lead director.

Virginia-based bank consultant Bert Ely said Wachovia's move is not surprising because governance advocates have been pushing public companies to make the change. But he added: "The one thing I wonder about is to what extent it's partly due to the losses Wachovia has taken and concerns about its risk management."

In particular, he said investors are troubled by Tuesday's disclosure that the bank's first-quarter loss had jumped to $708 million because of writedowns related to insurance investments. The bank may disclose more on that issue in a filing today.

Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, said that separating the CEO and chairman positions has become more popular in the past year, and that it's a good move for a company that's facing shareholder ire.

"When a company is going through severe problems and there is a crisis of confidence in the management, it makes sense," Elson said. "You want the board to be as effective a monitor as possible. Having the board chaired by the individual being monitored doesn't make a whole lot of sense."

Smith's changing of posts could be "totally cosmetic" or a real change that gives him a bigger role in devising bank strategy, said Paul Hodgson of The Corporate Library, a corporate governance research firm. He said the change didn't necessarily weaken Thompson's position at the company, but does allow him to share more blame.

Thompson, a company lifer, has served as CEO without being chairman in the past. He became CEO of predecessor First Union in April 2000 but mentor Ed Crutchfield held onto the post of chairman until March 2001. Bud Baker also served a stint as chairman after First Union merged with Baker's Wachovia later in 2001.

Wachovia's turbulent times

• April 14: Bank announces first-quarter loss, dividend cut, plans to raise $8 billion in capital and 500 layoffs.

• April 22: CEO Ken Thompson faces calls to resign at shareholder meeting.

• April 25: Bank announces settlement with federal regulators that could total $144 million in restitution and other penalties over its relationship with third-party telemarketers.

• April 26: Wall Street Journal reports federal prosecutors are looking at the bank as part of a broader probe of alleged money-laundering by Mexican and Colombian money-transfer companies.

• April 30: Bank says it will take a charge of up to $1 billion in the second quarter because of a court ruling involving leasing transactions.

• Tuesday: Bank revises first-quarter earnings, nearly doubling the loss to $708 million because of a writedown related to its life insurance portfolio.

• Thursday: Bank splits chairman and CEO positions.

< Previous page