Magazine

Ken Thompson


During the 1980s and 1990s, when banks were merging at a breakneck pace, the playbook for many industry dealmakers read like the Art of War. The results weren't always pretty: Integration didn't go smoothly, customers defected, and investors grumbled when profits didn't materialize.

But in his nearly four years at the helm of First Union -- now Wachovia Corp. (WB) -- G. Kennedy Thompson, 53, has rewritten the book on bank mergers. In 2001, he snapped up fellow North Carolina bank Wachovia for a 6% premium and a pledge not to do a slash-and-burn integration.

He drew up a similar pact in 2003 to combine his retail brokerage with Prudential Financial Inc.'s. (PRU) The deal was Thompson's biggest coup yet. For a mere $400 million in up-front integration costs, Thompson emerged with a network of 12,000 brokers peddling not just stocks and bonds, but mortgages, car loans, and other products. When the mutual-fund scandals touched Prudential, Thompson was insulated -- having insisted that Prudential retain liability for any broker misdeeds that occurred before the deal.

So far, Thompson's hitch-your-wagon-to-me approach appears to be paying off: Wachovia's operating income was on track to rise 30% in 2003, to $6.09 billion. That suggests that even in banking wars, nice guys can finish first.

Key Accomplishments

-- His deal to buy Prudential Financial's retail brokerage division created the fourth-largest brokerage on Wall Street.

-- Gained market share in all-important consumer sector, even in Internet banking.


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