Wells Fargo CEO steps down amid sales scandal

John Stumpf will retire and forfeit $41 million

NEW YORK— Wells Fargo’s embattled CEO John Stumpf is stepping down as the nation’s second-largest bank is roiled by a scandal over its sales practices. The San Francisco bank said Wednesday that Stumpf is retiring effective immediately and also relinquishing his title as chairman. It had earlier announced that Stumpf, the bank’s CEO since 2007, will forfeit $41million in stock awards.

Wells Fargo’s chief operating officer, Tim Sloan, will succeed Stumpf as CEO and join the company’s board. Sloan has been with Wells Fargo for 29 years. Stephen Sanger, the bank’s lead director, will serve as the board’s non-executive chairman.

Stumpf’s end at Wells Fargo comes a little over a month after the bank was fined by California and federal regulators $185 million over its sales practices.

The regulators alleged employees trying to meet aggressive sales targets opened bank and credit card accounts, moved money between those accounts and even created fake email addresses to sign customers up for online banking — all without customer authorization. Debit cards were issued and activated, as well as PINs created, without customers’ knowledge.

Stumpf, a 34-year veteran of the bank, had previously gained acclaim for navigating Wells Fargo through the financial crisis and keeping it free of scandal. But he came under withering pressure over the alleged misconduct.

“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,” he said in a prepared statement Wednesday.