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Wells Fargo Chief Abruptly Steps Down Wells Fargo Chief Abruptly Steps Down
(35 minutes later)
Wells Fargo’s embattled chief executive, John G. Stumpf, is stepping down immediately, the company announced on Wednesday. The scandal engulfing Wells Fargo toppled its chief executive on Wednesday, as John G. Stumpf announced his departure from the company, effective immediately.
Wells has been under fire for a long-running scandal in which employees set up unauthorized accounts to meet sales quotas. Mr. Stumpf and another top executive recently gave up millions of dollars in stock grants. The move was a swift and stunning fall for an executive whose bank made it through the 2008 financial crisis relatively unscathed only to be undone by a product sales scandal that pervaded its community banking division and has percolated under the surface for years.
The bank said Mr. Stumpf would be replaced by Timothy J. Sloan, its president and chief operating officer. Just two days earlier, the San Francisco bank shuffled its top management to give more responsibility to Mr. Sloan. Wells Fargo has been under relentless fire from irate customers, regulators, lawmakers and former employees since last month, when it disclosed that it would pay $185 million in fines and penalties over the unauthorized creation of as many as two million bank and credit card accounts over a period of at least five years by branch employees who were said to be under intense pressure to hit ambitious product sales goals.
The sales practices may reach back far longer. Former employees have told The New York Times of concerns they raised internally as far back as 11 years ago.
Mr. Stumpf, who was twice hauled in front of Congress to testify about the scandal in recent weeks, faced vocal calls to resign from an outraged public, but the timing and swiftness of his departure came as a surprise to the bank’s board.
The board received a letter from Mr. Stumpf early on Wednesday indicating that he intended to retire, according to a person briefed on the matter.
This person said the board was still in the early stages of conducting its investigation into the fake accounts and Mr. Stumpf’s handling of the scandal. It had not drawn any conclusions from its inquiry or pushed for Mr. Stumpf to step down. It was not scheduled to meet on Wednesday when it received Mr. Stumpf’s letter, which this person described as brief and lacking any indication as to why the longtime C.E.O. decided to leave now.
In fact, the board was expecting that Mr. Stumpf would address analysts and investors — as he has always done — when the bank reports its third-quarter results on Friday.
Wells Fargo said Mr. Stumpf would be replaced by Timothy J. Sloan, its president and chief operating officer. Just two days earlier, the San Francisco bank shuffled its top management to give more responsibility to Mr. Sloan.
“I am grateful for the opportunity to have led Wells Fargo,” Mr. Stumpf said in a written statement. “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.”“I am grateful for the opportunity to have led Wells Fargo,” Mr. Stumpf said in a written statement. “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.”