aside Breaking News: Wells Fargo’s CEO John Stumpf Is Retiring Immediately
Today, 10/12/16 the LA Times is breaking the story that the Wells Fargo CEO (Chief Executive Officer), John Stumpf is retiring immediately.
Here is the story by James Rufus Koren:
“John Stumpf has resigned as chairman and chief executive of Wells Fargo & Co., bowing to mounting criticism from lawmakers and others who said he should lose his job over revelations that bank employees created as many as 2 million accounts without customers’ authorization.”
The Wells Fargo financial scandal was first made public by the LA Times in a December 2013 series which exposed the culture of cross selling, intense pressure on front line employees to meet unrealistic sales goals to where some were creating bogus accounts.
This published December 2013 LA Times investigation led to the $185 million dollar settlement with regulators in September 2016. In 2016, Wells Fargo has admitted that over 2 million bogus accounts dating back to 2011were opened and 5,300 employees have been fired as a result. Based on my own research, these admissions are the tip of the iceberg.
John Stumpf has been the CEO of Wells Fargo since 2007 and chairman, since 2010. He will not leave with a severance pay check but he will keep his stock, valued at more than $100 million dollars; plus his 401K and pension benefits which exceeds $24 million dollars.
Mr. Stumpf surprised the board with his decision to resign immediately. This was not a forced move. According to various news sources, he did not provide a reason for taking this step which was unexpected because, until recently, he was resistant to leaving this post of power despite all the external pressures to do so.
Timothy J. Sloan, a long time Wells Fargo executive will be replacing Mr. John Stumpf as CEO.
But, the chairmanship will be filled by a General Mills executive, Stephen Sanger, the company’s leading independent director.
Critics were calling for both the resignation of Mr. Stumpf and the separation of the CEO and chairman roles for Wells Fargo.