on late Thursday said it would strip CEO Ken Thompson's title as chairman of the board.
Lanty Smith, the bank's lead independent director since 2000 and head of Raleigh, N.C.-based merchant bank Tippet Capital, will take over as chairman. Thompson will remain a director, as well as president and CEO.
"At this challenging time for the financial services industry and for Wachovia, my management team and I are pleased that Lanty agreed to assume the role and responsibilities of chairman, freeing me to focus 100% of my time and attention on guiding the company through the current environment and building and delivering enhanced value for the benefit of our shareholders, customers and employees," Thompson said in a company statement.
Thompson has presided over a bank that has floundered, like many of its rivals, in the credit crunch that has consumed financial markets since last summer. Wachovia last week disclosed its first-quarter loss
, 80% higher than it originally had reported in April.
Many of the bank's problems
, a California-based mortgage lender best known for originating option-adjustable rate mortgages, in which borrowers can choose the size of the payment they make each month.
As a result of its woes, Wachovia last month slashed its dividend and raised $7 billion in capital through offerings of common and preferred stock. It was one of several big banks to raise capital after difficult first quarters, including
Bank of America
In its statement, Wachovia said its board "has always recognized the importance of strong independent leadership" and said separating the roles "is consistent with best practices in corporate governance."
While commonplace in Europe, non-executive board of director chairs are somewhat rare in the U.S.
in December split its chairman and CEO roles when it named Vikram Pandit to its top post after a month-long search following Charles Prince's ouster. Sir Win Bischoff, a director of the bank, was named chairman.
This article was written by a staff member of TheStreet.com.