The ultimate inside man at Wachovia loses $12.5 million | News
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Thursday, October 2, 2008

The ultimate inside man at Wachovia loses $12.5 million

Posted by on Thu, Oct 2, 2008 at 3:53 PM

Man, if the brand-new CEO of a company invests $16 million in his new employer's stock, that's got to be a vote of confidence, right?

Well, Bob Steel started his job in July, after Ken Thompson was run off after the purchase of Golden West he engineered in 2006 proved to be catastrophic. Steel signaled his belief in the healthy fundamentals of Wachovia by putting his money where his mouth was.

In July, Steel personally bought 1 million shares of Wachovia stock, paying just over $16 million.

“Wachovia is a great company, and I made the investment because I believe in the core strengths of the organization,” he said at the time.

At Wednesday's close, those shares are worth about $3.55 million.

Steel won't be getting a lucrative severance package, although he does hold options:

Steel's employment agreement, struck in July when he joined the bank as chief executive, doesn't call for severance payments.

In the case of a merger or acquisition, he could immediately exercise 1.5 million options to buy company stock. But those options would be worthless for now because the stock price is well below the option price of $9.08 a share.

The Charlotte Observer part of the N&O has more, including info on the luckier officials and their personal golden parachutes.

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