Wells Fargo’s former CEO, Tim Sloan, abruptly stepped down in March after a brutal, four-hour beatdown from Congress about the big bank’s failure to clean up its act in the wake of repeated scandal.
Now, it seems Wells is having trouble finding someone willing to take on the role of leading the embattled bank into a new, scandal-free era.
According to a Wall Street Journal article, the Wells Fargo board has approached a select number of candidates, and no one appears to be taking the bait.
Among those contacted were JPMorgan Chase’s head of consumer banking Gordon Smith, PNC Financial Services Group CEO William Demchak and former U.S. Bancorp CEO Richard Davis, sources told the Journal.
While Davis and Demchak reportedly passed on the offer, the board continues to pursue Smith, the Journal reported. But sources close to Smith say he is reluctant to take the job and will likely stay at JPMorgan.
As the WSJ aptly stated, running the nation’s fourth-largest bank is not necessarily an appealing job.
“Wells Fargo’s new CEO will have to juggle fixing problems in Washington, reviving key businesses and rehabilitating a corporate reputation damaged by many problems that came to light following the bank’s 2016 fake-account scandal,” the WSJ said.
“Any professional glory to be earned turning around the bank is likely years away,” the article added. “Wells Fargo has a long to-do list from regulators and is operating under an unprecedented growth cap imposed by the Federal Reserve in early 2018.”
And, per the terms of Wells’ deal with regulators, the Office of the Comptroller of the Currency must approve the newcomer. Sources to the Journal that the OCC sent the bank a letter outlining its expectations for the vetting of candidates.
Warren Buffett, whose Berkshire Hathaway owns 9% of Wells’ shares, has also weighed in.
Several months ago, Buffett publicly stated that the new CEO shouldn’t come from Wall Street and probably shouldn’t hail from JPMorgan or Goldman Sachs.
According to the WSJ, other big names in the banking world have openly and privately criticized Wells for its lack of succession planning.
At an investor conference in late May, JPMorgan CEO James Dimon said, “It’s not responsible for a company – just my own view – to have a CEO leave with no plan in place. I don’t personally understand that.”
It’s highly unusual for a bank of Wells’ size to go so long without a CEO in place, the Journal notes, as most large banks usually have successors lined up years in advance.
For now, Wells Fargo General Counsel Allen Parker will continue to serve as interim CEO as the search continues.