Observers are puzzling over Shawmut National Corp.'s recent reassignment of a vice chairman, and some suspect the move is a subtle way of shunting her aside.
Eileen S. Kraus, vice chairman of Shawmut National Corp., was recently reassigned to business development functions outside the company's core markets of Massachusetts and Connecticut. The move was announced internally about three weeks ago.
Ms. Kraus, 55, had previously overseen community banking, installment finance and Shawmut Mortgage Co. - lines of business responsible for about 35% of Shawmut's revenues.
As one of the highest-ranking women executives in banking, she is highly regarded inside and outside Shawmut, which has dual headquarters in Hartford, Conn., and Boston.
In her new role away from the company's day-to-day profit engines, she will be seeking to extend her former business lines into Florida, New Hampshire, and Rhode Island - areas Shawmut has entered through acquisition.
Although Ms. Kraus remains vice chairman of the holding company and president of Shawmut Bank Connecticut, the move inevitably led to whispers about a demotion.
"This is definitely not a promotion. She's definitely on the outs," said a source familiar with the move.
Analysts said Ms. Kraus may be caught in a realignment of top executives. Joel Alvord, Shawmut's chairman and chief executive officer, surprised analysts this summer by removing three top officials.
"If this is accurate, it would further the pattern of Joel Alvord's consolidation of power," said Charles Peabody, an analyst at UBS Securities.
However, some say Ms. Kraus is actually being rewarded for the recent successes of Shawmut's consumer businesses, which are being realigned and passed to a management team with different strengths.
At the time of her reassignment, bank president Gunner Overstrom wrote in an internal memo to employees that Ms. Kraus' "demonstrated ability to adapt to a wide variety of responsibilities, which have included the human resources, marketing, and communications staff functions as well as line responsibility for consumer banking . . . will serve her well in this new position."
Certainly, Ms. Kraus denies that her move was a demotion. "I think that's incorrect. That's certainly not my understanding of what we're trying to do here," she said.
A 15-year Shawmut veteran with a reputation for business building and turnarounds, Ms. Kraus said her new role "involves community development, attracting more small business and middle-market banking customers, and government finance" business to the bank.
She also said her job would "provide senior-executive-level direction and leadership to the executives in charge of Rhode Island, New Hampshire, and Florida."
Executives in consumer banking lines formerly supervised by Ms. Kraus now report to Mr. Overstrom.
Those directly affected are executive vice presidents Robert Hedges and Donald Grigley, who are in charge of community banking and installment finance, respectively.
Ms. Kraus has worked her way up from vice president of human resources planning and development.
