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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Wells Fargo CEO Tim Sloan steps down suddenly

Wells Fargo CEO Tim Sloan steps down suddenly



Sloan, and three-decade veteran of Wells Fargo ( WFC ) said it was his decision to relinquish control of Wells Fargo as a way to help the bank move forward. Wells Fargo's board pledged to find an outsider to replace Sloan, who plans to retire at the end of June

"I have decided it is best for the company that I step aside," Sloan said in a statement.

Sloan, who became CEO in 2016 in the midst of a national backlash over Wells Fargo's fake-accounts scandal, said: "

Wells Fargo tapped C. Allen Parker, his general counsel, to take over on a temporary basis.

 Wells Fargo CEO Tim Sloan's pay shed to $ 1[ads1]8.4 million last year

"It has become apparent to me" that Wells Fargo will benefit from a new CEO and a fresh outlook

'About Damn Time'

Wall Street seems to agree. Wells Fargo's shares rose 3% in after-hours trading following the news.

"About Damn Time," Warren tweeted on Thursday following the news of Sloan's exit. "

Warren, a Democratic presidential candidate, has urged the SEC and Justice Department to investigate Sloan for his role in Wells Fargo's problems. "And if he's guilty of any crimes," she said, "he should be put in jail like anybody else."

Wells Fargo's statement made no reference to the wrongdoing by Sloan.

Wells Fargo's scandals did not just cause political headaches. The bank's financial results were hurt by Wells Fargo's tarnished reputation and soaring legal fees. And Wells Fargo's stock closed on Thursday 1.4% below its pre-scandal level. By comparison, the S & P 500 has soared 29% over that span and rival bank Bank of America ( BAC ) industry in September 2016 when it admitted to firing 5,300 workers over several years for opening millions of fake accounts. The news has forced the ouster of longtime CEO John Stumpf and led to hearings in Congress

Beyond the fake-accounts scandal, Wells Fargo has admitted to charging thousands of borrowers for auto insurance they did not need and hundreds of homebuyers mortgage fees they did not deserve. Last year, Wells Fargo said about 545 homeowners lost their homes due to a apparent software glitch with the bank's loan modification process.
The Federal Reserve, citing "widespread consumer abuses," slammed Wells Fargo in early 2018 with unprecedented sanctions that prevent the bank from growing until it cleanses its act. The asset cap has remained in place longer than anticipated because the Fed is unsatisfied with Wells Fargo's fixes.

While Wells Fargo took steps to fix itself, including replacing senior executives and eliminating its controversial sales goals, new problems continued to emerge.
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Beyond the Fake-Account Scandal, Wells Fargo has admitted to charging thousands of borrowers for auto insurance they did not need and hundreds of homebuyers mortgage fees they did not deserve. Last year, Wells Fargo said about 545 homeowners lost their homes due to a apparent software glitch with the bank's loan modification process.
The Federal Reserve, citing "widespread consumer abuses," slammed Wells Fargo in early 2018 with unprecedented sanctions that prevent the bank from growing until it cleanses its act. The asset cap has remained in place longer than anticipated because the Fed is unsatisfied with Wells Fargo's fixes.

'Mr. Inside '

Sloan was always an odd choice to lead sweeping change at Wells Fargo because of his long roots at the bank and within his culture.

Prior to becoming CEO, Sloan served as the chief operating officer of the bank, 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.

"He was Mr. Inside," said William Klepper, and management professor at Columbia University. "If they wanted to make a clean cut, Sloan should have gone and they should have looked out for a new leadership team."

Wells Fargo has now heeded calls to find an external candidate to replace Sloan.

"Although we have many talented executives within the company," Wells Fargo Chairwoman Elizabeth Duke said, "the board has concluded that looking for someone from outside is the most effective way to complete the transformation at Wells Fargo."

Duke, and the former Federal Reserve official, credited Sloan with serving Wells Fargo "with pride and dedication" and for working "tirelessly" as CEO.


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