A Turn in the Spotlight for Wells’ Hazen : Banks: The incoming chief has been a quiet player, behind gregarious Carl Reichardt. So far, he’s not telling his plans.
Ever since they worked as senior managers at Union Bank in the 1960s, Paul Hazen has toiled in the long shadow of Carl Reichardt.
When the gregarious Reichardt moved to Wells Fargo & Co. in 1970 to head up a now-defunct real estate subsidiary, the bookish Hazen soon joined him as vice president. As Reichardt moved up the corporate ladder and eventually became the financial’s institution’s top executive in 1983, Hazen always stepped up to the rung right below him.
While Reichardt received most of the credit for Wells Fargo’s savvy purchase of Crocker National Bank in 1986, he freely admitted that it was Hazen who quietly pulled the $1-billion deal together. And when San Francisco-based Wells pulled out of a financial nose-dive a few years ago, no one paid much attention but Hazen was in the co-pilot’s seat.
Now it’s Hazen’s turn to take the controls. Reichardt announced last week that he is retiring early and Hazen, 52, will assume the job of chairman and chief executive of the state’s third-largest bank by year’s end.
Many Wall Street analysts--and even some of the bank’s managers--say they know virtually nothing about Hazen, thanks to Reichardt’s dominant persona and Hazen’s low-key style.
“He’s a quart low on the charisma,” one Wells insider said of Hazen.
But Hazen’s friends and close associates say that he’s a man of uncommon savvy and grit who has already shown skill in guiding Wells Fargo in new, profitable directions, and one who won’t flinch at firing senior and lower-level employees if profit growth begins to slow.
“Paul is different, he is quieter,” said Lou Burnett, who worked with both men for 20 years and is now managing partner of Secura/Burnett, a financial services firm in San Francisco. “But nothing is missed by him. Paul is a very serious person when it comes to business. “Each can finish the other’s sentences, but they are still independent thinkers.”
Indeed, the question everyone is asking is how Hazen will lead Wells Fargo on his own, particularly at a time when the economy in California--Wells Fargo’s primary market--is still having serious problems. Hazen is keeping his plans quiet until Reichardt formally retires.
“Paul Hazen is not a caretaker,” said Joel P. Friedman, a banking analyst with Andersen Consulting in San Francisco. Hazen, he said, “will have his own vision and views about where the bank should go.” But he added: “We don’t know what they are.”
“Hazen’s got a reputation as being a bright guy and crack manager . . . but that’s about all we know about him,” said Mark Zandi, who follows the bank for Regional Financial Associates, a consulting firm in West Chester, Pa.
Campbell Chaney, an analyst with Dakin Securities in San Francisco, said it’s unlikely Hazen will push the bank in “any wild and new direction.” But Hazen probably will look for new, fee-producing services to generate profits in Wells Fargo’s branch offices.
Hazen, the eldest son of a lumber store owner, was born in Michigan but grew up in Tucson, where his parents moved when Hazen was a child because the dry desert air would be better for young Paul’s chronic asthma.
Even as a teen-ager, Hazen was drawn to business. While his high school buddies read Sports Illustrated and Playboy, Hazen also read the Wall Street Journal, according to David Giles, a boyhood chum and still one of Hazen’s best friends.
“He’d even bring (the paper) to class with him,” Giles said.
After getting a bachelor’s degree in finance from the University of Arizona, Hazen earned a master’s in business administration from UC Berkeley in 1964 and went to work at Union Bank under Reichardt.
After Hazen joined Reichardt at Wells Fargo in the early 1970s, they moved up the corporate ladder in lock-step, with Hazen succeeding Reichardt as president of the holding company and the bank in 1984 after Reichardt was named chairman and chief executive.
Hazen was lucky to be there. In 1983, his two sons and a fellow banker were involved in a head-on crash on the Golden Gate Bridge that slammed the engine of the car Hazen was driving through the front seat and into the back.
Hazen suffered serious injuries, and doctors told him that he would probably have a bad limp for the rest of his life. But after a series of painful surgeries and five years of grueling therapy, the limp is gone and he’s well enough to jog and play tennis.
“The crash caused me to be more reflective, and I started to spend more time with my family,” said Hazen, who has two sons. “In some ways, it made me a better manager. I started managing my time at work better, and I learned to schedule time with my family.”
Meanwhile, Hazen and Reichardt were busy converting Wells Fargo, a bank many analysts thought had become too flabby, into one where managers who did well were amply rewarded and those who didn’t were shown the door.
Once their own bank was in shape, the pair quietly started looking around for acquisitions and stunned the banking industry when Wells Fargo bought rival Crocker National Corp. from its British owners. Hazen handled negotiations that were so secretive that even Crocker’s chairman didn’t know about the merger talks until after the deal was done.
Hazen and the rest of the brass wasted no time making cuts at Crocker. About 5,000 people, including 1,600 managers, were quickly fired. Eighty offices were closed.
Two years later, when Wells became one of the first banks to open on Saturdays, Hazen and his management team asked tellers and other employees to sign an agreement stating they’d take turns working weekends. The 300 who didn’t were let go.
“Everyone in a business has to work as a team, from the president of the company on down,” Hazen said in a brief interview last week.
That “team philosophy” cut both ways. When bad real estate loans and a souring economy sent Wells Fargo’s profit plunging in 1991, Hazen and Reichardt took 50% pay cuts.
A company’s management “has to provide real leadership,” Hazen said in a brief interview last week. “If you ask your people to acknowledge hard times, you have to be willing to do the same things that you ask them to do.”
But one thing Hazen promises he won’t do is transform himself into another Carl Reichardt--who was often quoted and profiled in the business press--though associates say Hazen shares the same wit and sense of humor.
“Carl’s great, and in some ways I’ll never be able to replace him,” Hazen said. “If I don’t get the same kind of . . . exposure that he has, that’s OK by me.”
Bio: Paul Hazen
* Age: 52
* Birthplace: Lansing, Mich.
* Education: Bachelor’s degree in finance from University of Arizona, 1963; MBA from University of California, Berkeley, 1964
* Family: Married; two sons
* Residence: Marin County
* Resume: Joined Union Bank as mid-level manager in 1964. Moved to Wells Fargo Bank in 1970 as vice president of its realty advisory group and became its president in 1973. Was named one of the bank’s vice chairmen in 1981. Became president and chief operating officer of the bank and its holding company, Wells Fargo & Co., in 1984. In July, 1994, was named to succeed Carl E. Reichardt as chairman and chief executive.
* Interests-hobbies: Golf, tennis, jogging, card playing, country-western music, charities.
