Exec Reassesses Plan to Join Montgomery
NationsBanc Montgomery Securities on Wednesday said Carter McClelland, the former head of Deutsche Bank in the United States, may withdraw his agreement to join the investment banking firm.
McClelland was recruited by Montgomery as co-head of investment banking and was scheduled to begin work this week. He didn’t show up and is “evaluating his options,” said Jennifer Smith, a spokeswoman for the San Francisco company.
San Francisco-based Montgomery is locked in a dispute with its parent, NationsBank Corp., over who will run the combined company’s high-yield bond business. Thomas Weisel, chief executive and founder of 27-year-old Montgomery, is considering quitting over the issue.
Charlotte, N.C.-based NationsBank will be the largest U.S. bank when its pending takeover of BankAmerica Corp. is completed later this year.
Montgomery announced in June that McClelland, former chief of Deutsche Bank Securities and a top executive of Morgan Stanley & Co., would join the firm. At the time, Montgomery said it wanted to become one of the nation’s top investment banks.
McClelland couldn’t be reached for comment. His job situation was reported in the Charlotte Observer newspaper.
“We certainly hope that Carter will be part of our leadership team,” said NationsBank spokeswoman Ginny Mackin.
*
Montgomery was promised control of high-yield sales, research and trading as a condition of selling to NationsBank for $1.2 billion. Weisel’s possible departure follows a yearlong struggle over the business. Two months ago, NationsBank said Montgomery would keep high yield, only to reverse that decision a few weeks later. NationsBank said then that its pending acquisition of BankAmerica had created a new situation.
The McClelland situation comes as Weisel weighs a NationsBank offer to speed up payments aimed at keeping Montgomery partners at the firm in exchange for Montgomery giving up the junk bond business.
Weisel is apparently in talks with NationsBank that could lead to his friendly departure from Montgomery, people close to the matter said. If the talks break down, he could sue NationsBank for breaching his employment contract, which promised him control over high yield, the sources said.
Shares of NationsBank fell 25 cents to close at $31.81 on the New York Stock Exchange.
