In the wake of Wells Fargo’s plan to cut up to 26,500 jobs over the next three years, Sen. Elizabeth Warren (D.-Mass) is calling for CEO Tim Sloan to be given the boot.
Warren said on Twitter that during testimony before Congress in 2017, Sloan told her that she was “using math inappropriately” when the politician said the bank would have to let 20,000 employees go to meet its cost projections.
“Today, he says Wells will fire up to 26k workers, while doing billions in stock buybacks. Sloan’s the one who should be fired,” she said in a tweet on Thursday.
(Sloan was tapped to replace John Stumpf as CEO in October 2016, one month after intense media attention was paid to fraudulent accounts at the bank. )
Warren’s call for Sloan’s firing — not her first — isn’t the only trouble the embattled bank has had this week.
On Friday, the bank’s stock traded down 1% at about $55, which is 17% off its 52-week high of $66.30.
Raymond James equity analysts laid out their bear case for Wells Fargo’s stock in a report on Tuesday.
“We believe deteriorating fundamental performance and continued negative headlines support our thesis that Wells will be challenged to grow as it attempts to overcome its tarnished reputation. We struggle to find evidence that Wells Fargo will show a material fundamental improvement in the near- to intermediate-term,” said David Long, CFA, and Daniel Tamayo, CFA.
“Therefore, a lack of a positive catalyst, the likelihood for continued negative EPS revisions, slower growth, and continuing regulatory/headline risk lead us to believe that the shares will continue to underperform those of most other banks,” they explained. Furthermore, the analysts expect total loan balances and revenue to drop from 2017 to 2019.
On Wednesday, the New York Post said the bank’s board had reached out to Gary Cohn, the former president of Goldman Sachs, as a possible replacement for Sloan earlier this year.
But Wells Fargo Chairwoman Betsy Duke said those claims were “completely false,” according to multiple news reports.
(Related: When Will Wells Fargo’s Woes End?)
As of June 30, Wells Fargo Advisors included 14,226 advisors. That’s down about 300 from a year ago and 173 from the prior quarter, though the firm says retirement is behind 80% of departures over the past 12 months.
Also in the second quarter of 2018, the bank accrued a $114 million expense to refund wealth-unit customers who had been overcharged over the last seven years, along with $171 million for foreign-exchange clients.