After a long and storied banking career, Richard Kovacevich is stepping down as Wells Fargo & Co.'s chairman by yearend and fully handing over the reins of the company he created to his successor, Chief Executive John Stumpf.
Frederick Cannon, co-director of research at KBW Inc.'s Keefe Bruyette & Woods Inc., said this transition — two years in the making — signals that the $1.3 trillion-asset company's board is happy with its new leader and the progress integrating Wachovia Corp.
"I mean, it's a vote of confidence by the board in Stumpf," Cannon said. "The board must feel fairly comfortable that the merger is on track."
Kovacevich, who plans to retire by early 2010, will be succeeded as chairman by Stumpf in January, according to a press release.
Kovacevich, who spent 23 years at Wells Fargo and its predecessor companies, said in a statement that his successor is up to the job.
Stumpf "is the best person in the country to be leading our company through the challenges and enormous opportunities ahead," he said. "The board has every confidence that in addition to his current responsibilities, John will be an outstanding board chairman."
The succession planning at the top of company began before the recession. Stumpf replaced Kovacevich as chief executive two years ago and reached the mandatory retirement age of 65 last year.
He agreed in November to stay on as chairman for an interim period to help guide Wells through the financial crisis.
He also stayed to see through the integration of Wachovia Corp., a deal he helped orchestrate.
He turns 66 next month.
Kovacevich is a legend in the banking industry.
"If there was a banking hall of fame he'd definitely be in it," Cannon said.
He is credited with turning Wells into the company that it is today, from overseeing its merger with his old company, Norwest Corp., in 1998 to its contentious deal for Wachovia last year.
The Wachovia transaction — with Wells trumping a bid from Citigroup Inc. — was viewed as a personal and professional triumph for Kovacevich.
He made his early reputation at Citigroup, helping that company penetrate into New York City in the 1970s by playing a big role in its development of automated teller machines.
He was passed over for the job of Citigroup's head of retail banking in the mid-1980s. So he left to take over as head of banking and chief operating officer of Norwest, a midsize Minneapolis bank he turned into a local powerhouse through a series of acquisitions.
He became chief executive of Wells Fargo in 1998 and took the title of chairman in 2001.
