Dick Kovacevich Biography

Chairman, President, and Chief Executive Officer of Wells Fargo & Co.

Born Richard M. Kovacevich in 1943, in Enumclaw, WA; married Mary Jo; children: three. Education: Stanford University, B.S. (industrial engineering); Stanford University, M.B.A., 1967.


Office —Wells Fargo & Co., 420 Montgomery St., San Francisco, CA 94163.


Worked in strategic planning, General Mills, c. 1968–69; general manager, Kenner Products, 1970–71; head of American Photographics Corp., 1972–75; consumer banking positions at Citibank, 1975–85; chief operating officer, Norwest Bank, 1986; named president, Norwest, 1989; became Norwest's CEO, 1993; became CEO of Wells Fargo after merger with Norwest, 1998.


Board member, Cargill, Inc.; Target Corp.; San Francisco Symphony; trustee, San Francisco Museum of Modern Art; chairman, California Business Roundtable.


American Banker 's Banker of the Year, 2003.


Richard Kovacevich heads Wells Fargo, one of the biggest banks in the United States. After putting together a risky merger of the Minneapolis–based Norwest Corp. with Wells Fargo in 1998, Kovacevich proved industry analysts wrong by dovetailing the two companies and then outperforming all major rivals. While many banks had trouble righting themselves after mergers, Kovacevich handled the integration of Norwest and the San Francisco–based Wells Fargo with particular care so that customers were not alienated. Wells Fargo went on to perform well above expectation in the 2000s, though economic conditions were poor and other banks stumbled. Kovacevich is described as a contrarian by many in the banking industry. His philosophy is to look beyond current business conditions and figure out what his customers will need in the future. Kovacevich also stands out among bankers for his concern with consumers. He refers to Wells Fargo branches as "stores," and his growth plan while he headed Norwest was compared to the strategy of proliferating chains like Starbucks and McDonald's. This is an unorthodox vision of banking, yet Kovacevich has the numbers to prove his way works. Since the late 1990s, Norwest and then Wells Fargo have showed earnings growth of close to 15 percent annually, nearly twice that of the banking industry average.

Kovacevich was born in the small town of Enumclaw, Washington, 20 miles east of Tacoma. He excelled at both academics and athletics, and played baseball for Stanford University. He earned a degree in industrial engineering at Stanford, where he was a star pitcher. He considered a career as a professional baseball player, but a shoulder injury made that impossible. Kovacevich continued at Stanford, earning a graduate degree in business administration. He told a classmate at the time that he would never go into banking. He preferred a less hierarchical business, where he would have more responsibility for key decisions. His first job out of graduate school was with General Mills in Minneapolis, Minnesota. He spent two years doing strategic planning for that company, and then took a position as general manager of General Mills' toy division, Kenner Products, in Cincinnati, Ohio.

After several years at Kenner, Kovacevich decided to go into something entrepreneurial. He took over American Photographic Corp., a small photography business on Long Island in New York, started by former General Mills executives. The company reproduced family photos from damaged originals. After three years there, a management recruiter convinced him to meet with an executive at the New York bank Citicorp. Citicorp was a large urban bank with many layers of management, exactly the kind of business Kovacevich was sure he did not like. But after talking several times with the head of Citibank's consumer division, Kovacevich was convinced working for the bank would present new and interesting challenges. He was also promised responsibility and the leeway to do things how he saw fit. Kovacevich started in the consumer division in October of 1975, and by 1977 he was in charge of the bank's branch system in New York City.

Kovacevich showed his empathy with consumers and his ability to inspire his employees while at Citibank. The bank had just reorganized, taking large corporate accounts out of the branches and putting them under an umbrella corporate banking group. The bank had also just begun to install automated teller machines (ATMs) throughout the city. Branch employees resented the new equipment, fearing that it would replace human beings. Customers also were not comfortable with ATMs at that point. These combined changes had taken their toll on the New York City branch system, which had 273 outposts, and the division was losing money. Within three years, Kovacevich had made the branch system profitable. He was apparently able to promote the use of ATMs to customers, while reassuring employees that their jobs were not threatened. He worked closely with the bank's technology section as well, and ended up satisfying all the parties involved in the ATM deployment.

Kovacevich clearly did a great job handling Citibank's branch banking system. But after working there ten years, another man was promoted ahead of him to head Citibank's consumer division. Kovacevich was looking for more responsibility, and it seemed like he might not get it at Citibank. So he left his post and moved back to Minneapolis, where he became chief operating officer of the regional bank Norwest. Norwest had been a leading farm lender in the 1980s, but then suffered as the agriculture and real estate sectors in the Midwest did poorly. The bank had a heavy portfolio of bad loans by the mid–1980s, and its return on equity (a key measure of a bank's profitability) was very low, at eight percent. The bank had also had plain bad luck. The bank's president was electrocuted during a thunderstorm in 1979, and in 1982 the bank's headquarters burned down. A new chief executive took over just before Kovacevich came in, and management began to turn Norwest around. Kovacevich traveled extensively, so that within two years at Norwest he had visited all its more than 200 offices.

Kovacevich was known for inspiring employees, sometimes resorting to theatrical antics to fire up team spirit. His aim was to make Norwest a superior local bank, even as it began to spread beyond the Midwest. Kovacevich inspired Norwest's branches to seek out small customers instead of big businesses. The bank also moved into areas such as consumer finance, insurance, and mortgages, where it had done little business before. Kovacevich also promoted cross–selling, meaning he hooked customers who used one bank service to sign up for others. Selling more products to existing customers seemed to make more sense to Kovacevich than angling to bring in customers of other banks. Cross–selling became one of the hallmarks of Norwest's success.

By the end of 1988, Norwest was showing remarkable improvement, with a return on equity of close to 20 percent. Kovacevich became president of Norwest in 1989, and then chairman in 1995. In the early 1990s, Norwest added close to 1,400 branches (or stores, as Kovacevich liked to call them). Kovacevich's cross–selling strategy had paid off, and Norwest's customers used close to four of the bank's products, on average, by the mid–1990s. Norwest grew into a so–called superregional bank, with assets of about $78 billion by 1996.

In 1998 Kovacevich put together a merger of Norwest and Wells Fargo, a deal worth $31 billion that Wall Street claimed would not work. Bank mergers were notoriously ticklish, and several big mergers in the 1990s had left the new company with a sagging stock price and complaints that the acquiring bank had paid too much. Often the merged company cut costs by eliminating jobs, and this sometimes drove customers away. Wells Fargo itself had made a bad merger in 1996, buying First Interstate and then finding its customers fleeing. Because it had this unhappy merger behind it, Wells Fargo was something of a bargain. Kovacevich viewed the merger as a combination of equals. The combined company took the Wells Fargo name and moved its headquarters to San Francisco, California. Then Kovacevich did everything the "wrong" way round. Instead of trimming costs in the range of 30 to 45 percent, like other merged banks had tried, he only aimed to cut costs by a modest 17 percent. Instead of rushing through new technology that would bring both companies together within a year, Kovacevich laid out a leisurely schedule of three years for full integration. Thousands of Wells Fargo employees could have lost their jobs because of the merger, but Kovacevich offered retraining and kept on almost 60 percent of the Wells Fargo workers whose positions became redundant. This all sounded like nice–guy decisions, but the bank made money, too. Wells Fargo's earnings rose more than 90 percent in 1999. Its revenue rose almost ten percent, outperforming rivals, and its share price also went up.

Kovacevich made Wells Fargo a high–performing bank even as the long bull market of the 1990s ended and many other banks found themselves burdened with bad loans. Wells Fargo made some smaller acquisitions in the 2000s, building up its insurance business. Its stock price rose at a compound rate of four percent annually in the early 2000s, when comparable regional banks were seeing their stock sink. The bank also prospered on refinancing mortgages. Kovacevich continued to stress cross–selling, aiming to get Wells Fargo customers using as many as eight of the bank's services. The banking industry journal American Banker chose Kovacevich as its banker of the year for 2003. Kovacevich explained an element of his philosophy to the magazine's Laura Mandaro, telling her how he looked for the next business environment, not what was happening now. "If you look at most financial institutions, they're always chasing today's environment, where in fact that should probably be a signal to do the opposite," he said. "We start shifting resources two or three years before probably anything's going to occur." Although Wells Fargo had handled some $221 billion in new mortgages in 2002, Kovacevich hinted that he would probably scale back the bank's mortgage business. At one point, Kovacevich's contrarian streak may have seemed foolish, but his success with Wells Fargo showed that he knew what he was doing. Kovacevich, who had sworn he would never go into banking, had become the banker to watch.


American Banker, March 22, 2002, p. 2; December 2003 Supplement, p. 2A; December 4, 2003, p. 1.

BusinessWeek, January 13, 2003, pp. 68–69. Chief Executive, May 2001, p. 23.

Fortune, July 6, 1998, p. 126; May 15, 2000, p. 299.

Institutional Investor, December 1996, p. 43.

U.S. Banker, November 2002, p. 46.

A. Woodward

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