Tim Sloan, a Wells Fargo near-lifer who took over the CEO position when John Stumpf quit under pressure 29 months ago, announced his retirement yesterday with the bank still struggling to assuage regulators, right wrongs and win back consumers’ trust. The board of directors said it would look outside the bank for a successor.
Sloan “took over the top job in 2016 with a mandate to clean up the bank…, Emily Flitter, Stacy Cowley and David Enrich write for the New York Times. “Once regarded as among the nation’s best-run financial institutions, Wells Fargo admitted in 2016 that it had for years opened what may have been millions of fictitious accounts in customers’ names, improperly charged them fees and sold them unwanted products.”
“About damn time. Tim Sloan should have been fired a long time ago. He enabled Wells Fargo's massive fake accounts scam, got rich off it, & then helped cover it up…,” Sen. Elizabeth Warren tweeted. a>
“Last month, Mr. Sloan was repeatedly cut off as he tried to speak at a hearing of the House financial services committee. The chair of the panel, Maxine Waters of California, said: ‘He doesn’t get it,’” Rob Armstrong and Laura Noonan write for Financial Times.
“Prior to becoming CEO, Sloan served as the bank’s chief operating officer, where he oversaw the community banking division at the heart of the fake-accounts scandal. Sloan also oversaw the consumer lending division, where Wells Fargo’s auto loan problems occurred,” recalls CNN Business’ Matt Egan.
“He was Mr. Inside,” William Klepper, a management professor at Columbia University, tells Egan. “If they wanted to make a clean cut, Sloan should have gone and they should have looked outside for a new leadership team.”
Apparently, they never did -- right up until yesterday.
“This was my decision and is not related to our first-quarter financial performance [to be released April 12], the long-term outlook for the company, or any newly discovered issues. It’s simply a decision based on what I believe is best for our company,” Sloan, 58, said on a call with investors, Caroline Hudson reports for the Charlotte Business Journal.
“Just last week, the board reiterated its support for Sloan. And hours before Thursday’s news, top shareholder Warren Buffett said he backs him '100 percent,'” Bloomberg’s Hannah Levitt writes.
“They clearly have to regain their credibility,” John Reed, who ran Citigroup Inc. until 2000, tells Levitt. “You have to somehow behave in a way that causes the world to say, ‘OK, the past is behind them and they’re moving forward.’ And that’s a leadership issue. The fact that you would turn to a lawyer for something like that is not strange.”
The lawyer Reed refers to is C. Allen Parker, who was named interim CEO. "He has served as the company’s general counsel since March 2017 after joining the bank from an outside law firm,” Cravath, Swaine & Moore, Jim Puzzanghera reports for the Los Angeles Times.
“Sloan spent more than two years on an countrywide apology tour after Wells Fargo acknowledged a pattern of consumer abuses -- from opening millions of fraudulent accounts on behalf of its customers without their consent to mistakenly foreclosing on hundreds of clients and repossessing the cars of thousands of others. Sloan’s pleas often failed to win over frustrated lawmakers,” Renae Merle writes for the Washington Post.
“Making matters worse was the bank’s disclosure earlier this month in a regulatory filing that Sloan received $18.4 million in compensation in 2018, about a 5% bump from the previous year,” Merle adds.
“Officials at the Office of the Comptroller of the Currency, one of the bank’s primary regulators, were recently debating the rare step of forcing changes to Wells Fargo’s senior management or board, the Wall Street Journal previously reported,” the WSJ’s Rachel Louise Ensign reminds us.
“In recent weeks, Mr. Sloan has faced renewed pressure from regulators and lawmakers to get the bank’s problems under control. Washington’s frustration with Mr. Sloan played a major role in his decision to retire, people familiar with the matter said,” Ensign continues.
Sloan will formally walk out the door on June 30, but how quickly they want to forget -- at least in the beleaguered corporate communications department. When you click on the Google-results link for Sloan’s bio on the Wells Fargo site this morning, incoming interim CEO Parker’s credentials pop up instead.