Plenty of advisors, investors, regulators, politicians, clients and ex-clients have had their eyes on Wells Fargo, wondering who the bank would choose as its CEO. Six months after then-CEO Tim Sloan resigned in the face of criticism from lawmakers and others, the bank announced early Friday that it tapped Bank of New York Mellon Chairman and CEO Charles Scharf to take the reins, effective Oct. 21.
The news comes about a month since a report of the bank allegedly imposing fees on clients months after they’d closed accounts at the institution and three years since its fake-accounts scandal came to dominate headlines.
“It has been a long search,” said Chip Roame, head of the consultancy Tiburon Strategic Advisors. “It is possible that the board may have gotten surprised by Tim Sloan’s departure and was flat-footed without a target-replacement list.”
What Your Peers Are Reading
Now, the pressure is really on the new leader. “Scharf is going to have a lot of people watching — regulators, Sen. Elizabeth Warren, the media, customers, etc.,” explained Roame.
In addition, Wells Fargo’s asset growth has been restricted by the Federal Reserve, as it navigates a series of consent orders tied to different regulatory and compliance matters.
“It [still] needs to rebuild credibility,” according to Roame. “Much of the cleanup was done under Sloan, but everyone will be watching for continual issues under Scharf.”
Big Pay Raise
Apparently Scharf requested a big bump in compensation to take on the challenge.
He is set to have a yearly salary of $23 million, Bloomberg reported Friday — a 40% jump from his $16.5 million target pay in 2018 at BNY Mellon. Plus, he’ll receive $26 million of Wells Fargo stock.