Mellon Promotes Tech Boss, Starts Hunt for Replacement
Mellon Bank is looking again for a technology chief after promoting an executive hired recently for the hard-to-fill slot.
Eight months after the departure of the respected George P. DiNardo last January, the bank hired a former president of Glendale Federal Bank, Keith P. Russell, to take over the reins.
But Mr. Russell held the post for less than two months. Mr. Russell, who was also chief operating officer of $22 billion-asset Glendale, has now been promoted to head Mellon's credit policy department. He took the place of David L. Eyles, who resigned.
Data Processing for Others
Mellon earned 50% of its core income in 1990 from fee-based businesses, and under Mr. DiNardo became a technology leader in areas such as cash management and as a provider of data processing services to other banks.
Mellon has had a hard time finding qualified applicants for a job that has changed substantially since Mr. DiNardo held it. Mr. Russell's appointment to a highly visible chief technology spot at a bank with major fee-income businesses was seen as a sign of the times - that banks no longer want or need technology gurus to run their operations.
"We're not interested in some [for the technology slot] who isn't a business manager first," said W. Keith Smith, vice chairman of Mellon.
Speculation Is Denied
Mr. Russell's strengths are on the banking rather than the technology side. Before he became president and chief operating officer of Glendale Federal, he headed finance, venture capital, and mortgage banking departments, as well as technology support, for Security Pacific Corp.
Some observers said that Mellon may have hired Mr. Russell with an eye from the beginning to shifting him over to the credit policy area. However, Mr. Smith said the bank did not plan the move when it hired Mr. Russell.
Mr. Smith said that the credit policy job was more critical to Mellon's short-term success than the technology spot.
"It's where you feel the pressure most acutely," said Mr. Smith. "We're approaching $930 million in nonperforming loans." Among Mr. Russell's jobs will be managing nonperforming loans and the real estate business sectors. The real estate business lost $250 million in 1990, and has lost $108 million so far this year.
Mellon's search for a new tech chief could take the bank into next year, Mr. Smith said.
"Because Mellon is more than just a bank, the chief technology officer needs to be filled with someone with bank technology skills and third-party processing skills," said William Storts, head of the banking practice at Andersen Consulting Co. Mr. Storts added that executives working for technology companies might be reluctant to move to a bank.
Before Mr. DiNardo's departure, he had dissassembld much of the tech empire that had been built up during his tenure. As a result, about 80% of the programming staff now reports directly to business units.