SAN FRANCISCO (AP) - Wells Fargo & Co. said Tuesday that Dick Kovacevich will step down as chairman at the end of 2009, after staying in the post an extra year to help the bank navigate the financial crisis.
CEO John Stumpf, who is 56, takes the additional role of chairman on Jan. 1. He had been seen as Kovacevich's heir apparent since being appointed chief operating officer in 2005.
During Kovacevich's tenure, the market value of the company's stock rose to more than $130 billion from $4 billion. Now 65, Kovacevich became CEO of Wells Fargo in 1998 after his former company, Norwest Corp., bought the then-struggling bank and assumed its name. He will retire from the company in early 2010.
Kovacevich's stayed as chairman a year longer than planned, and up to the maximum age allowed by internal Wells Fargo rules. The bank has a mandatory retirement age of 65.
But last November, he was asked - and he agreed - to continue as chairman. His task was to focus on the crisis facing the financial services industry and to help with the integration of Wachovia after it was bought.
As CEO, Kovacevich brought to Wells Fargo a retailer's mindset, imploring employees to think of the bank's branches as "stores." He believed checking accounts, credit cards and other financial services should be sold like other retail products, with aggressive marketing appeals to customers.
The bank's lead director, Phil Quigley, called Kovacevich's leadership "bold, determined and visionary."
Stumpf first joined a subsidiary of Norwest, the company that bought Wells Fargo, in 1982. Stumpf held various positions at Norwest in Minnesota, Arizona, Utah and Texas before he became executive vice president of community banking in 2002. He was named chief operating office in 2005 and to the CEO post in 2007.
Stumpf has been on the Wells board since 2006 and will retain his CEO position when he becomes chairman.
Kovacevich said Stumpf is "the best person in the country to be leading our company through the challenges and enormous opportunities ahead."
The bank has fared better than most of its peers during the past year, but also like others it faces future loan losses as unemployed customers default on loans. Still, its latest second-quarter earnings after payment of preferred dividends was $2.58 billion, or 57 cents per share, which beat the 34 cents per share forecast of analysts surveyed by Thomson Reuters. Its quarterly revenue of $22.5 billion also beat their forecast.
Last fall, Wells joined other banks that took federal money to shore up the financial services industry when it took a $25 billion infusion. As of late July, Wells could not yet say when it could pay back the money. Stumpf said in April there were "rays of hope" for repayment.
The money was part of the federal government's effort to help the banking industry recover from a home-lending spree that triggered the worst financial crisis since the Great Depression of the 1930s.
Shares of San Francisco-based Wells Fargo rose $1.10, or 3.9 percent, to close at $29.39 on Tuesday. In the past 52 weeks, the stock has fallen 16 percent.