North Carolina People; Ken Thompson, Chairman, President & CEO Wachovia Corp

Good evening ladies and gentlemen tonight North Carolina peoples in the world Copia tower Charlotte. We're here to meet and talk with Ken Thompson. He's the chairman and chief executive officer of a Coby organization the world's leading banking enterprises it was a Morehead scholar at Chapel Hill who got his MBA at Wake Forest University. We talked with him just a few second funding for North Carolina people is provided by walk over you helping North Carolina people realize their financial goals since 1879 and by UN CTV members. Can I guess one of the things I have to do that first is tell the Ewing audience that for twenty four and a half years workover has been a sponsor of this program for which we are

intensely grateful and just good to have that association with you. Good see you again. It's good to be here and I hope that that's not a conflict for us. No no not at all. We'll have a good time doing it. Well Kobe was always the community bank in my hometown. Here you are one of the world's great banking organizations now. How do you keep the community touch. Bill it's something we work very hard to have. We think we think the advantage for Walker VI is being a big giant organization with a lot of scale and a lot of power to get things done. But we only think we will succeed if we can be seen in every community where we operate as the community banks so we encourage our employees to do it. People who who want to do well at walk of you know that they were expected to be involved in the communities to be involved with the United Way and other 5 0 1 C3 organizations in those

communities and and so they do it readily. The community bank. Yes but you are a member of the great global economy. It goes on now all around the world 24 hours a day. How do you manage to stay abreast of that. Well I've got a lot of good thinking and good that work with me and we encourage everybody to do their part and and and when you put it all together hopefully we've got a full view of what's going on but I try to read a lot. I get up early in the morning. I've got the Wall Street Journal New York Times in the Charlotte Observer on my doorstep at 5:15 and that's when I start my day and I spend about an hour an hour and a half catching up on what's going on in the world and and then I spend a lot of time asking questions of our employees our customers and other people in the industry who I

respect. You have access to modern communication and all up and down the work Obeah system and you can listen as well as talk with people every day if you wish to. That's exactly right we've got a studio just like the one we're in now where where I can broadcast to 100000 employees around the world and but also they can they can talk to me. And so it really does make the world a smaller place. One more question about your posture in the world for a moment. You worry about the extent of the nation's debt now the fact that China and so many other countries hold that these indebtedness is how do you see us as a player here. Well I think it's something that way that we do need to be concerned about. You don't want to run with large deficits for a long time. But our deficit as a percentage of the GDP is no higher now than it has been a number of times since World War Two. And also this really is a

connected world in China and India and Japan and some of the countries that are investing in the U.S. at least buying our debt need us as much as we need them Cylon not one that is panicked about our our debt but I do think it's something we need to work on. And you have a whole international division that studies that all the time. We do we've got international economists as well and we're now on the ground in 32 countries around the world. It's important to us. Let's go back to this relationship in the community it serves. We our viewers are primarily in North Carolina Virginia Tennessee South Carolina are close in states where Kovi has always made quite a. Point of serving the public can in so many ways. The leadership in founding the Research Triangle all these other things when you. That was true first union and Drew will go with you the merger that brought you

about in New York today. Your present configuration. Is this still something that you drive hard to see get your people to do. It really is Bill adds. First of all the banking business is a relationship business and our relationships in the communities where we operate are probably than the most important thing that we can work on. And whether it's in North Carolina or Florida or New York or Texas wherever we are we want people in those areas to think of us as a local bank. And so when we transfer people to a new community we want them to get involved with the leaders of that community. We encourage it. We we provide time for them to do it. Matter of fact we provide four hours a month for every employee of our company all hundred thousand of them to volunteer and father 1 see 3 organizations

in that community so it's really four hours of paid time off for every employee and we want them to use that that time. Man that's an incredible gift you give to your constituency. Well we don't it's not just a gift we think it's an investment. We think we get. We get paid for that and we do. You came up to Chapel Hill as a Morehead scholar. What about those four years the university got you smiling happy time. They were it was a wonderful time. I'm probably like everyone else who's gone to Java will I look back on it is one of the high points of my life and I wish it. I wish it could have been longer I realize now that I didn't do all that I could have done while I was there but you have to look back to realize that and I've tried to tell my children that I've got two children who are at Chapel Hill now I've got a third that wants to go there when he graduates. But now you're serving on the Morehead foundation board yourself. Are you

happy about the kind of quality of talent you see coming in competing for the same scholarship. It's a much more competitive scholarship today than it was when I got it. First of all when I was in Moore at scholar it was all male. Now it's open to anybody and it's opened nationally to many more people than when I got it so when I look now at the people who anymore had scholar ship so I'm happy that I came along when I did I don't think I would have gotten one today. They come from many regions and even overseas how to end it it's remarkable how much these young people know today isn't it. And they're brilliant and they are interesting and interested. And I'm very proud of the kids that are coming in on the way it's got shipped in and I think Uncle Mott would be to it. Oh I'm sure he would be I've never seen such talent. You're over on the Wake Forest campus you've been invited back to make a talk to the MBA

students and somebody raises hand aback and says Mr. President I would not get lost in a hundred thousand employee organization today what's my chance in the organization like what Kobe What do you tell him. I would tell him that he's going to have to make sure or she's going to have to make sure they don't get lost. So part of it is they've got to take some personal responsibility. But the second thing I would tell them is we work very hard to make this a meritocracy and performance when's out at this company. And and so if they perform and if they take some responsibility to make sure that that they've got some visibility they can do very well here just to support the process affords you an opportunity to get to see a lot of the talent that this organization obviously has. It really does we wait we've got. Human capital planning process here where we go fairly deep in the organization I do

with division heads looking at rising talent in the company. I also spent a lot of time in the field I'm gone 50 to 60 percent of the time. Currently I'm on a two month process of visiting really all of our geography and having town meetings with employees and smaller matings with people who are who are outstanding performers and so you know my job is really a talent job at this point and I need to know who our talented people are and I need to make sure that we're putting them in positions where they can and they can show off their talent. You have executive training processes was when we absolutely did talent you see coming on you move along pretty fast. Well we do. And as I came through our company I was moved into a number of different places I moved seven times my wife can't believe how many times we moved out of Dell and it would be that many. But I was in different functional areas different geographies and we're trying

to do that with with people here as well. I hear you saying it you're pretty mobile chief executive officer. When do you find time for those three children and your wife. How did how do you keep the harmony that's obviously a part of your life itself. Well it's it's something you have to work at and I schedule it. I live by a calendar and I try to get my family events early enough so that I can put them on the calendar so that I can schedule business trips and business events around it and it's doable. It's not impossible to do. It's hard to do but if you work at it you can do it. And I've got a wife that is wonderful and make sure that it happens. But she's keeping you in mighty good health so you look like that's a great asset start with. We want to get that to our state has a pretty solid licks in the last decade Can we were low cost textile industry

appreciably. You know what's happened to tobacco furniture has had its knocks. How do you see the economy of North Carolina today. Well I think it it's coming back. I think it is deeply intertwined with our education system. We've got to change the the workforce in North Carolina those tobacco jobs and textile jobs and furniture jobs are not going to come back we're going to live in a world wide economy where they've moved and they're good they're not going to come back and so we need to prepare the workforce for higher level jobs. And our education system our great university system or our community college system will be a wonderful asset for us and our K through 12 public school system. So it really is is a weapon that we need to use to attract work to North Carolina.

But so is Charlotte in the Research Triangle area are our areas where industry is easy to attract and we need to make that true all the way across the state I think. I was talking to the superintendent's office here in Mecklenburg not too long ago and I discovered there were eight thousand teachers in your school system right here in this neighborhood. It's hard to get people into the teaching profession this year and there are many reasons for it not the least of which is the economics of it. You concentrate a lot of energy in looking at this problem as a viable corporate citizen in North Carolina. We do Bill. We probably don't do enough but we try to channel our giving and our volunteer efforts at Walker via towards two things education and community development. And so we we we have something called a rating for East where

we have employees reading in the secondary schools around the country we give books to the secondary school system. We support an organization called Teach for America which attracts students from great universities and puts them into urban and rural school systems. We have a principal of the Year thing where we honor principals across our franchise and so we see that we really do see education as fundamental to great economic performance and we think that's where we ought to be spending a lot of our time and money. As far as giving goes this program. Real identity with that principal of the Year selection process was we feel as you do about the importance of education and just a week from now we'll be visiting with that new principal and we look forward to it. He's great with you do you will be awarding the we honor we have him come on and have this program and

find out because if you learn how much innovation is going on in the mind of the person right down there on the firing line. Right. The principal is a terribly important individual in all of this and I'm glad to hear what you say about the emphasis on education you even do that inside this organization. I would really do employees reading in schools employees running for school boards we've got we've got one of our. Top people here in Charlotte that currently is running for the school board in Mecklenburg County and we want to make time available to employees to do things like that. It's vital. Again I can't absorb the advance in technology today like I used to but the banking industry is one that is really undergoing quite a transformation. But I want you to do your check in a moment. But I still write a project with my longhand and go to the bank and do like I did 50 years ago but how do you

keep up with all that technology is really transforming the industry. It is and it's and it's really helping us it's helping us take cost out of our operations so that we can pass that cost back to consumers and as I was telling you before we started the interview I started 29 years ago in banking and we were still using carbon paper at that point in time and it's unbelievable to me how communications have improved and how we're using technology to make banking easier for consumers and corporations and I'm not a technologist but we've got a lot of good technologists here and I think one of the things that we need to focus on as you know top 50 company in the country is making sure that our technology is is up to date and that we're we're staying ahead of the growth of it. And I think we are it's vital. If you have friends up in Connecticut New York state how do you make a

community bank work up there. Well it's the exact same principle and we are expanding rapidly in Manhattan right now and we find that the same thing that works in Gaston County in North Carolina works in Manhattan it's rolling up your sleeves it's getting involved in what's going on in that community and trying to make a difference. And you know as you as our baseball coaches used to tell us or buy puts their pants on one leg at a time a natural way it is with community involvement as well. Now let's look at what Kobe is 5 10 years ahead. I know you do. You're constantly planning and looking ahead in what big things do you foresee up there and your relationship say with the state and with the federal government. Right. Well first of all North Carolina is home to us. It's our it's where our headquarters is it's where we employ probably 25000 of the hundred thousand people that we

employ so we're always going to be very interconnected with the government in North Carolina and we want to be a great corporate citizens and that will continue nationally. You know we are a big part of his economy of the country and it is important to us and so we're involved over the next five or 10 years I think consolidation in air industry is going to continue. I think it will not only be within the borders of the United States but I think you're going to see consolidation globally and walk Hevia certainly wants to be one of the consolidators. So our presence will spread nationally and it will spread internationally. Absolutely. You're in many foreign countries with one aspect of your industry right now. Which one is that as a securities programmer. We are international in our securities operation where a lot of the a lot of the loans and underwriting is that we do in the United States are purchased by

foreign buyers and so our institutional sales business is in Asia and Latin America it's in Europe. Our our brokerage company has brokerage offices in South America as well as and 49 states in the U.S. And then we've got a very large trade finance operation that is. It is in 32 countries as I said heavily oriented Asia where so much trade is taking place now so we've got five branches and in Asia and then we've got rep offices and a lot of countries in Europe Latin America and Asia. I noticed the asset base is over 500 billion dollars now. You should have with your board periodical here and you look at where you are and what you're doing. That figure but thinking back to your days at Rocky about that gracious it would overwhelm me. Well it's never I mean sometimes that I got out when I joined what was then first union. Twenty nine years ago it was two billion and assets there

and you know the growth has been amazing. But the the job seems very similar in many respects the zeroes at the end get larger but I can tell you this it was harder to get from 2 billion to 4 billion than it has been to get from 100 billion to 500. Really the numbers just get bigger. What do you do when you want to blow the whistle and just get cool off a little bit and have some time with KEN THOMPSON Yeah. Doing what he wants to do. Well I I like golf I play golf right. I've got a regular group of about 12 or 15 guys that play on Saturday mornings I try to exercise four or five times a week and that's something I do with my wife. Son she's a an exerciser as well and then I have you know time away from work I try to devote to family so I've enjoyed watching my kids grow up I miss them now that they're at Chapel Hill but I tend to go to Chapel Hill more now

than I have with let's read about that case when you're out moving about the country like you do to you. You just take time and walk into the bank so to speak. So you see folks can see you and you can see them. I do. And that's a fun thing to do. Wherever I am if I pass walk or view branches and I have a I have time on the schedule I walk in and walk down the teller line and introduce myself and frankly it's fun sometimes to watch people's reaction because you surprise them they don't know you're you're coming. Sometimes they don't know me. Sometimes they do but i like bad and I like to ask them about what's going on and our employees will be very candid. If you open up they will they will give you straight feedback and say wow I like that. I was going to say that's quite a compliment to you that you people talk that directly with you. Well I think it's I think it's our entire culture it's not something that I created as something

that was created here a long time ago I want to go back to education a little bit. High school diploma today is not as adequate as it used to be for aspiring young people is to go on. That's right and I would agree with that. The new business it calls the bank to be very interested in your types of programs in community colleges like the Great when you have here in Charlotte. Well we we hire a lot of people from community colleges these days and a lot of people that are in our operations areas technology places like that come right out of the community college system and so we try to we try to give back to that system to make sure that it's there to provide the kind of talent that we need. Looking at the state again the small business enterprise is really the success that underpins our economy still isn't it. It is. You make a

special effort there for the little business guy who has a hard time sometimes these days. We do Bill and you know we are a giant company. And what what what I want our communities to know is even though we're a giant company that doesn't mean that we make our living only off of giant companies like us. Our bread and butter the core of our business is focused on small business and. We've got to be meaningful to small business in the way we do it is we have a community banking program here that treats small business very differently than the way we would deal with an IBM or a PepsiCo or somebody like that. And we want generalist dealing with those people we want the we want the president of the small company to be able to talk to us about his personal banking as well as his company's banking. And we think getting that right is very important to the growth of Walkerville.

Do you see that attitude throughout the southeastern part of the United States where you have such a great presence or your banking system leading this is going to be the salvation of the transition of a lot of the economy in our all region of the country. I think so that all the jobs in the country are created by small business. You know the Fortune 100 probably has a net reduction in jobs over the last five years. Small business is where the action is it's what it's where the growth in the economy is and it's where the growth in Walkerville will be as well. You get great satisfaction out of it. Generating and guiding such a huge and powerful economic force I can say I do believe as matter of fact it's sort of interesting I was at the International Monetary Conference meeting in Washington three Sundays ago and I was at a dinner with bankers from Latin America Asia and Europe. And we sat in our dinner conversation was about the satisfaction

and the pride that comes from being in this industry and being able to be an engine for growth around the world. I do. I didn't plan to be a banker growing up. But I'm so happy that that's where I ended up. I am so lucky that that's where I ended up. So that's you disk came into the industry after you left college and went to business school at Wake Forest and even as I was graduating I wasn't exactly sure what I wanted to do and I interviewed a lot of different industries and frankly I choose walkover then first union because because I feel to like. A strong bond with the people that I've talked to and thought this was a place where I would enjoy myself and and do well and that's it has been that for all of us in North Carolina. Congratulation had such a great career it was obviously a great choice for you and you've been an enormous asset to this state. Again we're profoundly grateful to you and

letters and gentlemen I hope you've enjoyed this little visit with one of the truly great business corporate leaders in our country today. Until next week then denied funding for North Carolina people is provided by walk over you helping North Carolina people realize their financial goals since Pete hundred seventy nine and by UN CTV members.