After years of regulatory scrutiny into its sales practices following the 2016 bogus account scandal at its bank, Wells Fargo has announced Tim Sloan is relinquishing his role as CEO of the company, effective immediately.
Sloan, who took the helm in October 2016 following the scandal, is retiring effective June 30, but he’s stepping down as CEO, president and board member effective immediately, Wells Fargo says in a press release.
He had been with the firm for more than 31 years, Wells Fargo says.
“In my time as CEO, I have focused on leading a process to address past issues and to rebuild trust for the future. We have made progress in many areas and, while there remains more work to be done, I am confident in our leadership team and optimistic about the future of Wells Fargo,” Sloan says in the press release. “However, it has become apparent to me that our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives. For this reason, I have decided it is best for the Company that I step aside and devote my efforts to supporting an effective transition.”
The board has elected C. Allen Parker, Wells Fargo’s general counsel since early 2017, to serve as interim CEO, president and board member while the company looks externally for Sloan’s replacement, according to the press release.
“Although we have many talented executives within the Company, the Board has concluded that seeking someone from the outside is the most effective way to complete the transformation at Wells Fargo,” board chair Betsy Duke says in the press release.
About a week ago, responding to media reports that Wells Fargo was talking to former head of Goldman Sachs, Harvey Schwartz, to replace Sloan, Duke told Bloomberg in a statement that “rumors” of the board talking with outside CEO candidates were false and that Sloan “has the unanimous support of the board, and this support has never wavered.”
Thursday, she said the firm still hasn’t contacted any potential candidates, according to the Wall Street Journal.
Replacing Sloan with Parker and extending the search for a permanent replacement outside the firm is a departure from previous management practices for Wells Fargo, according to the paper. Critics have said having executives with decades at the firm lead the company prevented it from resolving serious issues, the Journal writes. Parker, meanwhile, was hired from outside the firm following the 2016 scandal, according to the paper.
That year, Wells Fargo settled with regulators for $185 million over revelations that thousands of its retail bank employees opened millions of accounts with client authorization, and similar problems, in part caused by aggressive quotas, have emerged in other parts of the company, including its wealth management unit. A few days ago, Wells Fargo announced the appointment of Tim Traudt as interim head of wealth management starting in April, replacing Jay Welker, who announced his retirement from the firm in November.
Meanwhile, Sen. Elizabeth Warren, D-Mass., who’s been calling for Sloan’s ouster, tweeted her approval, according to Bloomberg.
“About damn time,” she wrote, according to the news service. “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. Now— let’s make sure all the people hurt by Wells Fargo’s scams get the relief they’re owed.”