Magazine article American Banker

Mixed Reactions to PNC's Show of Support for CEO

Magazine article American Banker

Mixed Reactions to PNC's Show of Support for CEO

Article excerpt

Has management at PNC Financial Services Group Inc. made matters worse by affirming James E. Rohr as chairman and chief executive officer last week? Investors and analysts seem to disagree.

On Wednesday the troubled Pittsburgh banking company publicly threw its support behind Mr. Rohr while replacing Robert L. Haunschild, its chief financial officer. His departure was one of several executive changes announced since July 18, when the company was placed under supervision, having run afoul of regulators earlier in the year over its accounting for three off-balance-sheet entities.

The July agreement forced PNC to hire consultants to help get is house in order. But they will not complete their report until next month, so some investors say support for Mr. Rohr or the company's freshly minted corporate governance principles, also unveiled Wednesday, seems premature.

"The board acted well before the facts" that will be provided by the consultants, said Frank Barkocy, the director of research at Keefe Managers Inc. "It's almost as if (Mr. Rohr) is rubber-stamped."

PNC may have been looking to increase investor confidence with Wednesday's appointment of its new CFO, William S. Demchak, Mr. Barkocy said. But support for Mr. Rohr ahead of the consultants' findings was "upsetting," and may have damaged confidence, he said.

On Wednesday, George A. Davidson Jr., the company's chairman of special regulatory affairs, said in a press statement that the management "recognized that the work of the corporate consultants is ongoing."

But Mr. Barkocy said Keefe Managers reduced its position in PNC gradually last week and will continue to do so. He did not disclose how large the position was and whether he plans to all of it.

Michael L. Mayo, an analyst with Prudential Securities Inc, echoed Mr. …

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