Richard "Dick" Kovacevich
Wells drew praise for dodging many of the mortgage market pitfalls that befell other big banks, and its purchase of Wachovia catapulted the San Francisco company into the industry’s top tier.
Kovacevich soon emerged as a vocal critic of the federal government’s response to the crisis. Wells received $25 billion under the Troubled Asset Relief Program — funds that were repaid in late 2009 — even though Kovacevich insisted that his bank didn’t need the money.
“Shortly after TARP, the stock market fell by 40%,” the outspoken former CEO said in a 2013 interview. “And the banking industry stocks fell by 80%. How can anyone say that TARP increased the confidence level of an industry, when its stock market valuation fell by 80%?”
Seven years after Kovacevich retired as Wells’ chairman, the bank’s phony- accounts scandal came into public view. That black eye and subsequent revelations of misconduct at the bank have led to re-evaluations of Kovacevich’s legacy, because he was seen as more responsible than anyone else for building the bank’s aggressive sales culture.
Since his retirement from Wells Fargo, Kovacevich has served on the boards of Cargill, Target, Cisco Systems and Theranos, the embattled health care startup whose founder now faces fraud charges.
Kovacevich also makes frequent appearances on CNBC, where he provides commentary on the economy, banking regulation and other topics.
Ken Thompson uttered those infamous words in May 2006 while defending Wachovia’s decision to buy Golden West Financial, a San Francisco lender that focused heavily on option adjustable-rate mortgages. Thompson, who had previously shown restraint as an acquirer, agreed to pay $26 billion for Golden West in a deal that was hurriedly assembled while he juggled responsibilities of hosting a professional golf tournament that Wachovia was sponsoring.
The deal was the beginning of the end for Wachovia. Losses piled up as homeowners turned in their keys instead of making payments on underwater mortgages. Legal settlements and securities losses spiked. Thompson was ousted in June 2008, shortly after a contentious shareholder meeting. He was replaced by Robert Steel, a former Treasury Department official.
Wachovia was on the verge of failing in September 2008 when the FDIC intervened and arranged for Citigroup to buy Wachovia’s retail bank. Then Wells Fargo, which had a squeaky clean record at the time, swooped in and agreed to buy the entire company for $15 billion.
Less than a year after leaving Wachovia, Thompson joined Aquiline Capital Partners, a New York private equity firm, as a senior adviser and eventually became one of the firm’s principals.
Aquiline had bought a sizable stake in BNC Bancorp in High Point, N.C., after the crisis, the proceeds of which were used to roll up struggling banks, and Thompson joined the company's board in 2011, serving as Aquiline’s representative.
BNC sold itself to the Pinnacle Financial Partners in Nashville, Tenn., early last year. Thompson now serves on the $23 billion-asset company's board.