Bank One Corp. chairman and chief executive officer John B. McCoy, under fire for several months amid a series of earnings disappointments, announced his resignation Tuesday.
The move, including Mr. McCoy's departure from the banking company's board, took effect immediately and left president Verne G. Istock as acting CEO, pending a search for a permanent replacement.
The installation of an interim CEO is certain to raise further questions about Chicago-based Bank One's leadership, strategic direction, and future as an independent company. In a prepared statement, the company said it would give itself a few months to find a successor to Mr. McCoy.
The search will be led by John R. Hall, retired chairman of Ashland Inc. and a 12-year veteran of the Bank One board. He was named nonexecutive chairman in the Bank One structure unveiled Tuesday.
Senior executive vice president William P. Boardman, whom Mr. McCoy put in charge of the troubled First USA credit card division in October, was made a corporate director and promoted to vice chairman. He continues to work on that Wilmington, Del., operation's turnaround.
"I am confident that through this process we will justify the continued support of our shareholders and position the organization for future growth," Mr. Istock said in the statement. He was not available for an interview.
The $260 billion-asset banking company has been conducting a strategic review of all business lines since the summer, after reporting revenue-growth problems at First USA. The card operation, which Bank One bought in 1997, was considered to be an engine for future growth but stumbled on a series of marketing and pricing snafus that drove customers away.
Bank One told investors in August that it would not meet third-quarter profit forecasts. In November, the company said it would not hit targets for the fourth quarter.
Bank One said its management still intends to make a presentation to analysts and investors in New York in January regarding the company's outlook for 2000. Some market watchers, however, said the abrupt changes indicate lasting instability.
"The board, by stepping in, is showing that it's very serious about looking for improved performance quickly," said Diane Glossman, an analyst at Lehman Brothers. "This will either facilitate a turnaround or, if they can't do it, they will sell the company."
"There is a clear leadership void at the top of the company," said Michael Mayo, an analyst at Credit Suisse First Boston. "The longer it waits to get fixed, the more uncertainty there will be."
Reflecting market sentiment that Bank One had become a takeover target, the company's shares spiked sharply on the news. They closed up $3.8125, at $33.1875.
Some analysts said the changes also illustrate how far boards have come to favor the interests of shareholders rather than cater to the egos of managers.
"It is a clear positive," said Lori Appelbaum, an analyst at Goldman, Sachs & Co. " It shows that boards are more closely aligned with shareholders' interests."
According to a source who asked not to be named, the board became deeply split over loyalties and how next to proceed, and the only solution was for Mr. McCoy to step aside.
In the previous realignment in October, Mr. McCoy, 56, swapped the chairman's title with Mr. Istock, 59. Mr. Istock was the chairman of First Chicago NBD Corp. when it merged with Columbus, Ohio-based Bank One in 1998.
Since January, four of the five highest-paid executives at Bank One have departed, most since the troubles at First USA came to light.
Richard W. Vague, who was chairman of First USA, resigned in October. A month later, James W. Stewart 3d, the president and chief executive of the company's ambitious internet banking program, Wingspanbank.com, resigned. Mr. Boardman, 58, oversees Wingspan as part of First USA.
Two vice chairmen, Richard Lehmann, 55, and David Vitale, 53, announced their retirements earlier this year.
The departure of Mr. McCoy ends a banking dynasty that began in 1935 when his grandfather, John Hall McCoy, joined the Bank One predecessor City National Bank and Trust Co. John B. McCoy's father, John G., took over management of the bank in 1958 and reigned for almost 30 years, retiring as chairman in 1987.
The just-departed CEO helped build the bank from an Ohio-centered regional bank to a company with operations stretching across the United States. Mr. McCoy was not available for comment Tuesday, but market watchers said it was a sad ending to a promising, at times stellar, career.
Mr. McCoy oversaw an expansion strategy in which Bank One sought to be among the top three in most of its chosen markets. Bank One tried to keep acquired banks' managements in place and give them autonomy under what was called the "uncommon partnership." But amid the pressures of the 1990s as Bank One went nationwide, many of the decentralization principles gave way to streamlining and more coordination from headquarters.
A statement by Mr. Hall, the 67-year-old nonexecutive chairman, said, "Through the uncommon partnership, John welcomed into Bank One leading banks from markets across the country. Personally, it has been a pleasure working with John for the last 12 years."
"He was the proper CEO when Bank One was smaller, with a decentralized structure and local autonomy," said Nancy Bush, an analyst at Ryan Beck & Co. "He could cheerlead. But as the company got bigger and more complex, he was not necessarily the one who could keep up."