Wells Fargo CEO John Stumpf just announced he plans to step down after the recent scandal surrounding the bank.
At the core of the fake account scandal surrounding Wells Fargo right now is the fact that more than 5,000 of the bank’s former employees opened more than 2 million fake accounts to get sales bonuses.
In 2015, Wells Fargo was the #1 mortgage lender in the United States, with a 7.3% market share, according to this chart from Richey May & Co.
Today, Stumpf announced he would step down as CEO and the Board elected Tim Sloan, the company's president and chief operating officer, to succeed him as CEO.
"My immediate and highest priority is to restore trust in Wells Fargo," Sloan said in a release.
The bank sent out a letter to its consumers apologizing for the recent events and explaining what the it is doing to rectify the situation, including its recent change to eliminate sales goals.
Other changes in the bank’s leadership are also taking place: Stephen Sanger, its lead director will serve as the Board's non-executive chairman, and Independent Director Elizabeth Duke will serve as vice chair.
Sloan also was elected to the Board, and his appointment to CEO and election to the Board are effective immediately. He will retain the title of President.
Since the change, stock increased over 1% in extended trading, according to an article by Christine Wang for CNBC. Wells Fargo announced Stumpf will not receive severance.
“I am grateful for the opportunity to have led Wells Fargo," Stumpf said. "I am also very optimistic about its future, because of our talented and caring team members and the goodwill the stagecoach continues to enjoy with tens of millions of customers.”
“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 continued. “I know no better individual to lead this company forward than Tim Sloan.” This sudden retirement plan came soon after attacks were made against Stumpf to figure out if he, and other senior executives, knew about the fake account issue before it became public knowledge.
Wells Fargo is facing heat from the House of Representatives, the Senate, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, various states and municipalities, and maybe even the Department of Justice.