Wells Fargo CEO quits amid scandal over bogus accounts, successor named
Embattled Wells Fargo Chief Executive Officer John Stumpf has stepped down in the wake of the far-reaching unauthorized accounts scandal, effective immediately, the bank announced Wednesday.
Stumpf, who presided over a culture that enabled employees to secretly open up to 2 million bogus accounts and fund them with customer money, retired as chairman and CEO. The bank’s board of directors appointed President and Chief Operating Officer Timothy Sloan, a longtime Wells insider, as CEO.
“While I have been deeply committed and focused on managing the company through this period, I have decided it is best for the company that I step aside,” Stumpf said in a prepared release.
Stumpf’s departure comes at a time when the bank is under heavy scrutiny from the U.S. Department of Justice and following a stream of congressional calls for Stumpf to step down. But whether his exit will be enough to benefit the San Francisco-based bank remains unclear, experts said.
“The resignation of the Wells Fargo CEO is really a culmination of bad press that the board simply could not overlook any more,” said Michael Yoshikami, a banking industry expert and president of Walnut Creek-based Destination Wealth Management. “It’s clear their perspective was that this was needed for Wells Fargo to move past the scandal.”
But the board may have proceeded at a too leisurely pace to placate critics, some analysts said.
“This is too little, too late,” said Ken Thomas, a Miami-based independent banking analyst. “The board knew they had to do this. Everybody knew they had to do it. I would have expected a lot more, such as bringing in somebody from outside of Wells to run the bank. But better late than never.”
Despite a “clawback” in which he was forced to forfeit $41 million in stock and salary, Stumpf will walk away from the scandal with a robust payday. The 34-year Wells veteran will not receive a severance package as part of his retirement. But he has accumulated $137.1 million in company stock, deferred compensation and a pension, according to Equilar, a San Mateo-based research firm.
Joe Cotchett, a Burlingame-based attorney who has filed a lawsuit in San Francisco on behalf of bank shareholders, says the board’s decision to enforce the clawback doesn’t go far enough... (To read the entire article, please click HERE)