Monday, Jul. 02, 2007, 08:00 PM UPDATED 11:59 AMBy Nick Zulovich
SAN FRANCISCO — Wells Fargo & Co.'s board of directors named John Stumpf, former chief operating officer, as the new chief executive officer last week. Officials said Stumpf will retain his title of president, which he had while recently serving as COO.
The former CEO, Dick Kovacevich, will continue as chairman until he retires as the end of next year when he turns 65.
"Our board has great confidence that John Stumpf will be an outstanding chief executive officer of Wells Fargo because of his quarter century of experience with our company, his broad and deep understanding of our unique culture, his personal commitment to people as a competitive advantage and his passion for our vision, values and business model, which we've executed successfully for more than 20 years," Kovacevich explained.
"We firmly believe there's no other leader anywhere in financial services better equipped to lead Wells Fargo to the next stage of success in satisfying all our customers' financial needs and in achieving our goal of industry-leading, double-digit growth in revenue and earnings per share," he continued.
After receiving the announcement, Stumpf said, "I appreciate the confidence the board has placed in me, and I look forward to working with all of our team as ‘one Wells Fargo' to continue building a culture of collaboration that, instinctively and naturally, puts what is best for the customer first and then exceeds customer expectations."
Discussing Stumpf's responsibilities, Kovacevich said that given the company's size, complexity and growth prospects, the new CEO will oversee a team of seasoned CEOs — who average nearly 30 years in financial services — each leading a group of businesses that separately would be the size of a Fortune 200 company.
Kovacevich pointed out that since 1985 when the company began developing and executing its culture and business model, it has achieved "outstanding results, among the very best in the financial services industry, or any industry, for that matter."
He went on to compare financial results in 1985 to 2006:
1985: $56 billion
2006: $284 billion
1985: $3.1 billion
2006: $35.7 billion
1985: $317 million
2006: $8.5 billion
Diluted Earnings per Share
1985: 18 cents
1985: $2.6 billion
2006: $120.1 billion
Return on Equity
1985: 10.8 percent
2006: 19.6 percent
Return on Assets
1985: 0.59 percent
2006: 1.75 percent
Executives noted, "The 1985 base includes the old Norwest, a surviving legal entity of the ‘new' Wells Fargo, restated to include the old Wells Fargo, the old First Security and other ‘pooling of interest' acquisitions since 1985. Consequently, the 1985 base numbers are an ‘apples-to-apples' comparison to the new Wells Fargo."
Offering a bit of history, executives said Stumpf, 53, joined the former Norwest Corp. in 1982 in the loan administration department of Norwest Bank Minneapolis. He held management positions at Norwest Bank Minneapolis and Norwest Bank Minnesota before being named chairman and CEO of Norwest Bank Arizona in 1989.
Executives recalled that he became regional president for Norwest Banks in Greater Colorado/Arizona in 1991. From 1994 to 1998, he served as regional president for Norwest Bank Texas and led Norwest's acquisition of 30 Texas banks with total assets of more than $13 billion.
In 1998, when Norwest Corp. merged with Wells Fargo & Co., he became head of the Southwestern Banking Group, which included Arizona, New Mexico and Texas. Two years later, he was named head of the new Western Banking Group, which included Arizona, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.
In 2000, officials said he led the integration of Wells Fargo's acquisition of the $23-billion First Security Corp., based in Salt Lake City. By July 2002, he was named head of Community Banking and reported to Kovacevich. In August 2005, he became president and chief operating officer, in addition to being elected as a director last June.
Stumpf also serves as the chairman of the board of Visa U.S.A., and is also a member of the board of Visa International, The Clearing House, the San Francisco Committee on Jobs, the Bay Area Chapter of Junior Achievement, the Board of Trustees of the San Francisco Museum of Modern Art. He is also a member of the California Business Roundtable and the Financial Services Roundtable.
As for Kovacevich, 63, he became president and CEO in November 1998 after the Norwest and Wells Fargo merger. Additionally, he took the title of chairman in April 2001.
Reviewing his past, executives said he was named CEO of Norwest Corp. in 1993 and became chairman in 1995 after serving as president and COO since 1989. He joined Norwest in March 1986 as vice chairman and COO of the Banking Group.