The FT reports that
Richard Kovacevich’s decision to stay on past retirement age at Wells Fargo is drawing fire from some analysts who have a history of praising his tenure as head of the bank.
Not really. The “some analysts” the FT cites is really just one analyst: Ladenburg Thalmann’s irrepressible Dick Bove. Bove often has contrary-minded, thought-provoking things to say. This time, though, he’s just wrong.
I’ll stipulate up front that corporate suites across America are full of 60-something-year-old egomaniacal bloviators who don’t know when it’s time to step aside and let someone else run things. One of the surest ways for a management team to melt down is to let the ex-CEO stick around and second-guess what the new guy is doing. That’s why mandatory retirement ages are generally a good thing.
But Wells Fargo (NYSE:WFC) isn’t most companies. It is run by perhaps the most talented executives in the banking industry, who work together with an uncommon level of collegiality.
And, as it happens, that’s about to come in handy. There’s an awful lot going on at Wells Fargo these days. The Wachovia integration, for one thing. And the ongoing credit crunch. Plus, Wells is one of the few companies in the banking business in a position to materially benefit (assuming it makes the right moves) from the dislocation of its competitors.
Addressing all that would be a mind-boggling management challenge for any individual. (The Wachovia integration alone will be a doozy.) Happily for Wells, John Stumpf and Dick Kovacevich have known each other and worked well together for years. If Dick Bove thinks the two will get in each other’s way as they move to address these issues, he doesn’t know Wells Fargo as well as he’s been letting on.
Normally, a chairman overstaying his retirement age would give me pause, too. But not this chairman, at this company, at this particular time.