Richard M. Kovacevich

Chairman and chief executive officer, Wells Fargo & Company

Nationality: American.

Born: October 30, 1943, in Tacoma, Washington.

Education: Stanford University, BS; MS; MBA.

Career: General Mills, planner; GM, mergers and acquisitions; division manager; Citicorp Group, executive; Norwest, 1986–1989, vice chairman and head of banking group; 1986–1993, chief operations officer; 1989–1993, president; 1993–1998, chief executive officer; 1995–1998, chairman; Wells Fargo & Company, 1998–2001, president; 1998–, chief executive officer; 2001–, chairman.

Awards: Best Manager, BusinessWeek , 2003, 2004.

Address: Wells Fargo & Company, P.O. Box 63750, San Francisco, California 94163;

■ As of 2004 Richard M. Kovacevich was leading a $334 billion diversified financial services company that offered banking, insurance, investments, mortgages, and consumer finance services from its storefronts, on the Internet, and through other distribution channels. Although the headquarters were in San Francisco, Kovacevich's approach was decentralization, each local store acting as a center for customers' financial service needs. Wells Fargo was the leading mortgage originator in the United States and the second largest domestic service provider, having almost $400 billion in assets in 2004. In 2003 Wells Fargo was the fifth largest U.S. bank in assets. Forbes highlighted Wells Fargo as the 12th largest U.S. corporation in a composite ranking of revenue, profit, assets, and market value; among the top 50 in revenue among all companies in all industries; and among the 10 largest charitable givers in corporate America. Kovacevich wrote for the company Web site: "We learn from each other. That's one of the advantages of being big." In 2004 Wells Fargo assets reached $397 billion with a $96 billion market value of stock. The company ranked number one in the industry in the areas of retail banking, small

Richard M. Kovacevich. Paul S. Howell/Getty Images.
Richard M. Kovacevich.
Paul S. Howell/Getty Images

business lending, agricultural lending, insurance brokerage, and equity lending.


Kovacevich summed up his managerial philosophy as follows on the company's Web site: "Integrity is not a commodity. It's the most rare and precious of personal attributes. It's the core of a person's—and a company's—reputation." Kovacevich emphasized the major factors behind Wells Fargo's success: "What has made our company so successful for 151 years? I believe there are two important reasons. First and foremost, our people. We have the most committed, talented, experienced, innovative, and caring people in our industry. The second reason is that for 15 years we've demonstrated that our business model—diversified financial services, not just banking—and earning all our customers' business does work."

Kovacevich was a visible and accessible CEO, qualities that matched well with the company's first product—service. Kovacevich's name and face became almost as synonymous with the corporate image as the Wells Fargo stagecoach that had once securely delivered money. Kovacevich's summary of the company's vision and values on the Web site read: "Our product: Service. Our Value-Added: Financial Advice. Our competitive advantage: Our People." Below this slogan was a friendly photo of a smiling Kovacevich with his suit coat slung over his shoulder. According to Kovacevich, customers were central to all company operations that aimed to provide "personal, hometown, responsive, friendly service."

In 2004 the Wells Fargo workforce reached 134,000. By calling employees "team members," Kovacevich conveyed his vision that "Regardless of how big we are and how much territory we cover, we share certain values that hold us together wherever we are and whatever we do. It doesn't matter what our responsibilities are, our levels or titles, what businesses we're part of, or where we live and work…. We believe every one on our team is important and deserves our respect…. We use, extensively, America's most neglected resource—recognition."

Treating employees right was important to Kovacevich. On the Web site he wrote, "Our team members will say, 'I chose the right company. I'm valued. I'm rewarded. I'm recognized. I can improve my professional skills here. I can reach my career goals. I enjoy my work'." At the same time, Kovacevich expected Wells Fargo employees to care as much about the company as he did. He wrote, "In hiring people, we really don't care how much a person knows until we know how much they care."

Kovacevich outlined his goals as the following components of the company's platform: "We want to satisfy all of our customers' financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of America's great companies." Kovacevich emphasized the last point several times in his writings, reaching back into Wells Fargo history. To further strengthen Wells Fargo's reputation as a truly American company, Kovacevich made a priority of personalizing both employee relations and customer service.


Kovacevich took the American corporate image of Wells Fargo farther by emphasizing his pride in "competing in an industry that is central and indispensable to the growth of our national economy, and an industry where we can make a fair profit and do good for our customers and communities at the same time." It was important to Kovacevich that Wells Fargo maintain a presence in the national and local communities. He expected team members to be community leaders and to "promote the economic advancement of everyone in our communities including the less fortunate who have yet to share in the prosperity of our extraordinary country." Kovacevich declared the company would be "known as an active community leader in economic development, services that promote economic self-sufficiency, education, social services, and the arts." He encouraged Wells Fargo team members across the country to "roll up their sleeves" and participate in community fundraising campaigns, nonprofit leadership, and community events. This contribution of "financial, human, and social capital" was a cornerstone of the Wells Fargo community vision.

Attention to community service, customer care, and national growth signified Kovacevich's understanding of the place of Wells Fargo in the U.S. economy and society. For example, he facilitated and encouraged employees to own stock and stock options in the company through the "Partner Shares" program. He was also committed to helping his team members be "winners." Kovacevich reiterated another distinctly American characteristic of the Wells Fargo company: accessibility. His "picture of success" was to be "known by our team members, known by our customers, known by our communities, and known by our shareholders." He reached out to all types of customers—"consumers, small businesses, farmers and ranchers, non-profits, middle-market companies, real estate companies, and corporations."


Kovacevich's basic focus was wholesale and retail banking and mortgage lending. His core strategy was to sell as many products as possible to each customer and create repeat customers rather than bringing in customers who would not be loyal. The result was that in 2003 the average Wells Fargo customer signed up for four products, double the industry average. Kovacevich's strategy in response to slowdowns in mortgage originations was to bolster other business lines, such as commercial lending. A Fortune 500 company, Wells Fargo in 2004 was "the fourth largest financial institution for the market value of its stock in the world" and the 27th largest among all world companies. The company's financial goals were to "lead the industry in return on equity, return on assets, and growth in revenue and profitability."

Kovacevich presented Wells Fargo as a diversified services company that provided "every product our customers need." He wrote, "Our job is to provide sound financial advice for customers—and create new wealth for them—as they move from one financial product to another…. Customer-Centric, not Product-Centric." Wells Fargo offered the following services: banking, home equity, home asset management, money market accounts, portfolio management (investments), insurance, consumer and commercial finance, venture capital, commercial real estate, and other business and personal services. To obtain profits and provide customer service in all these areas, Kovacevich promoted the philosophy of "cross-selling" or "needs-based selling." The idea was that the more the company worked with customers, the more the company learned about their needs, and the easier it was to sell customers a broad offering of products so that they would turn to one brand with many services. Then the customers had to be impressed with excellent customer service.

The Wells Fargo strategy as set out by Kovacevich took the form of 10 initiatives in 2004. Among these objectives were increasing banking earnings from investments, brokerage, trusts, and insurance; increasing the number of products chosen by current customers; continuing to work as customer advocates; increasing the number of customers who used both a Wells Fargo mortgage and banking service; increasing the number of choices for customers; and providing "informationbased marketing." The last initiative fit with the CEO's view that both employees and customers should have full access to all information that could benefit both them and the company.

Wells Fargo's product line was the most extensive in the industry and number one in many areas, such as mortgages and financial services distribution, Internet banking (3.5 million active Internet banking customers), commercial lending, and insurance brokerage. The company's system of distribution was the largest in the industry as of 2004, Wells Fargo having the largest network of stores and 6,700 automated teller machines. Wrote Kovacevich, "Our business is service—personal service. We have one of the industry's strongest sales and service cultures." In 2004 Wells Fargo was selling at a 30 percent discount to the Standard & Poors 500, but Kovacevich was not content with this figure, saying, "That's not good enough." He wanted to raise the price/earnings ratio, the ratio of the company's stock price to its earnings per share, to "at or above the average for all S & P 500 stocks."

The open-book CEO was not eager to have his private life accessible. Kovacevich was an avid golfer and carried a 10.2 handicap index. He belonged to the San Francisco Golf Club and the Burlingame Country Club in Hillsborough, California. When the U.S. Golf Association Web site began to publicize all memberships and golf scores, Kovacevich was not happy. "Why they need to be accessible by anyone, I don't see what benefit that provides," he told Carrick Mollenkamp of the Wall Street Journal , "At least someone should have told me" (April 19, 2004). This former pitcher turned down an offer from the New York Yankees to accept an athletic scholarship to Stanford University, where he earned bachelor's and master's degrees in industrial engineering. He later earned a master of business administration degree from Stanford.

Kovacevich was a member of the boards of directors of Cargill, Target Corporation, and the San Francisco Committee on Jobs. He was a member of the board of governors of the San Francisco Symphony and of the boards of trustees of the San Francisco Museum of Modern Art and the California Institute of Technology. He was chairman of the California Business Roundtable. BusinessWeek named Kovacevich best manager in 2003 and 2004, stating that he "set the standard for banking excellence." BusinesWeek also recognized Wells Fargo as one of the top 25 American companies in all industries on the basis of sales, profit, and stockholder return and as one of its Web Smart 50 for customization.

See also entry on Wells Fargo & Company in International Directory of Company Histories .

sources for further information

"Dick Kovacevich: Wells Fargo," BusinessWeek Online , January 13, 2003, .

Kovacevich, Richard M., "The Vision & Values of Wells Fargo," .

Krampf, Allison, "Is All Well Now for Wells Fargo?" Barron's Online , May 26, 2004.

Mollenkamp, Carrick, "An Open Secret," Wall Street Journal , April 19, 2004.

"Repeat Performers: For This Exec A-Team, Another Ho-hum Year of Killer Profits, Enviable Margins," BusinessWeek Online , January 12, 2004, .

—Alison Lake

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