Wells Fargo (WFC) CEO Sloan Announces Plan To Step Down

Having faced widespread criticism for his efforts to turn around the bank, Wells Fargo & Company’s (NYSE:WFC) CEO and President Timothy J. Sloan has decided to exit his role immediately. The decision has pushed the bank to start a hasty search for his successor.

Sloan, who joined Wells Fargo in 1987, became CEO of the San Francisco-based banking giant in October 2016. He took up the position at a time when Wells Fargo was facing its biggest regulatory threats.

Throughout his leadership, Sloan had been busy dealing with the aftermath of fake account scandal and disclosure of problems in other areas of Wells Fargo. In a conference call following the announcement, he said that his presence is a “distraction” that is keeping the bank from moving past previous wrongdoings.

Long-time critic of Wells Fargo, Senator Elizabeth Warren, showed relief on Sloan’s announcement. She had repeatedly asked regulators to oust Sloan in the past. Moreover, she kept the Federal Reserve from removing the asset growth cap that was placed in February 2018 until he is replaced.

Regarding plans to find a new CEO, Wells Fargo seeks to appoint someone from outside to complete its transformation. In the meantime, C. Allen Parker, who served as the Company’s General Counsel, has been selected as interim CEO and President.

The board’s decision to look outside for leadership seems to prudent, as it would provide a fresh approach in dealing with the problems. However, the job of finding a CEO for the scandal-ridden bank is going to be slightly tough.

Shares of Wells Fargo have lost 6.4% over the past 12 months compared with 10.8% decline recorded by the industry.

Currently, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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