Wells Fargo chief executive Timothy Sloan abruptly steps down
Timothy J. Sloan, the embattled chief executive of Wells Fargo, unexpectedly resigned on Thursday, the company announced.
Sloan, who has been at the company for 31 years and became chief executive in 2016 after his predecessor resigned under pressure, has been facing intensifying criticism about the bank’s culture and sales practices.
Wells Fargo said Sloan, 58, would be replaced by the bank’s general counsel, C. Allen Parker, on an interim basis as it searches for a permanent chief.
Wells Fargo, once reIt garded as among the nation’s best-run financial institutions, has been reeling since it admitted in 2016 that it had for years opened thousands of fictitious accounts in customers’ names, improperly charged them fees and sold them unwanted products. Since then, the bank has been hit with many financial penalties by regulators.
Last year, the Federal Reserve punished Wells Fargo for its yearslong pattern of misconduct by barring the bank from expanding until it cleans up its culture and establishes better internal checks and balances. Sloan twice pushed back his estimate for when the Fed would lift its restrictions.
wasn’t clear what prompted Sloan to tender his resignation. He appeared before a congressional committee this month and defended his work repairing the bank’s practices and culture. Lawmakers from both parties attacked his record.
After Sloan’s testimony, the Office of the Comptroller of the Currency — Wells Fargo’s primary federal regulator — took the unusual step of publicly criticizing the bank.
Days before his Capitol Hill testimony, The New York Times reported that many Wells Fargo employees felt they remained under intense pressure to reach the types of internal sales targets that bank executives had insisted were no longer in force.
Less than a week ago, two senators sent a letter to the Federal Reserve urging it to keep the growth restrictions on Wells Fargo in place until Sloan was replaced as chief executive.
“Recent reports provide more evidence that Wells Fargo is fundamentally broken, with a record of misconduct that has lasted for years,” they wrote. “There is no evidence whatsoever that Mr. Sloan will fix these problems.”
Betsy Duke, chairwoman of Wells Fargo’s board, said in a statement that the company would seek an external candidate to replace Sloan. “The board has concluded that seeking someone from the outside is the most effective way to complete the transformation at Wells Fargo,” she said.
Wells Fargo shares rose by more than 2 percent in after-hours trading. The company’s share price has lagged the broader market this year, rising just 6.5 percent compared with a 12.3 percent increase in the S&P 500.