BB&T Corp. is counting on the solid track record and reputation of its chief executive, Kelly King, to alleviate concerns about making him chairman as well.
The bank's board of directors made it official yesterday, that King, 61, would replace John Allison on Jan. 1. Allison will remain on the 18-member board.
Allison said in August 2008 that he would retire, after 20 years as chairman, at the end of 2009. Most analysts expected King to be named chairman since he replaced the retiring Allison as CEO on Jan. 1, 2009. King is the last remaining member of the "original five" executives credited for transforming BB&T from a farm bank into one of the largest financial institutions in the country.
"BB&T's strength today is a testament to John's phenomenal leadership in this role for 20 years," King said. "We have weathered the storm as well as any other financial-services company in the country -- and we believe our best days are ahead."
King has had several major accomplishments in his first year as CEO:
□ The June repayment of the $3.1 billion borrowed from the federal Troubled Asset Relief Program.
□ Oversight of the takeover of Colonial BankGroup -- the largest purchase in BB&T's history.
□ BB&T is one of only three large regional commercial banks that have remained profitable throughout the financial crisis.
"As the saying goes, ‘If it ain't broke, don't fix it,' and clearly there's absolutely nothing broke about the way BB&T handles corporate governance," said Tony Plath, a finance professor at UNC Charlotte.
BB&T is bucking pressure from corporate-government advocates who oppose having the same executive serve as chairman and chief executive.
Joseph Gordon of Gordon Asset Management LLC said he believes that King will emerge as one of the top CEOs in banking over the next five years. But he doesn't favor King taking over as chairman.
"As chairman, there is more pressure on him to forget the past and adopt more stock-oriented compensation schemes, such as Goldman Sachs'," Gordon said.
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