Wells Fargo & Co. Chief Executive Officer Charlie Scharf has landed in hot water over comments he made three months ago that tied the struggle to find experienced Black executives to a limited talent pool.
After a news report Tuesday resurfaced the remarks, Scharf initially issued a statement on Twitter, saying his comments from June were “misinterpreted.”
After the ire intensified online overnight with critics ranging from Congresswoman Alexandria Ocasio-Cortez to comedian D.L. Hughley, Scharf delivered a mea culpa to all of the bank’s 266,000 employees.
“I apologize for making an insensitive comment reflecting my own unconscious bias,” Scharf said Wednesday in a statement. “There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise.”
The tumult began with a memo from Scharf that set new diversity targets and tied executive pay to improving those metrics.
That statement, issued as leaders across corporate America rushed to denounce racism after an unarmed Black man in Minneapolis was killed in police custody, cautioned that change wouldn’t happen right away because of the industry’s failure to build a strong pipeline of minority candidates.
“While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of Black talent to recruit from with this specific experience as our industry does not have enough diversity in most senior roles,” Scharf said in the June memo.
Scharf exasperated some Black employees this summer when he made similar comments in a virtual meeting, Reuters reported Tuesday, citing two people who attended.
Since taking over a year ago, Scharf has frustrated some in the firm’s ranks by adding mostly White men to his leadership team. A day after sending the June memo, the firm named Barry Sommers, another White man who had worked with Scharf at JPMorgan Chase & Co., to run its wealth and investment-management business.
Sommers joined Mike Weinbach, Scott Powell and William Daley — all White men with experience at Scharf’s former firm who are now among Wells Fargo’s top ranks.
The firm later named Mike Santomassimo, who also fits that bill, its next chief financial officer. Scharf has also added two Black men, Ather Williams and Lester Owens, to his top leadership team.
Other corporate leaders who’ve pledged to diversify their top ranks say it’s less about the talent that’s available than it is efforts to find it.
“I don’t think it’s an issue of talent,” Delta Air Lines Inc. CEO Ed Bastian said Wednesday at the Bloomberg Equality Summit. “We have incredibly talented leaders within the African-American community.”
Banks are under increased scrutiny for the lack of progress they’ve made on diversity, as well as the financial industry’s involvement in creating and prolonging economic gaps. Until earlier this year, just one of the more than 80 people listed on the executive teams across the six largest U.S. banks was Black: Citigroup Inc. CFO Mark Mason.
“There is no question Wells Fargo has to make meaningful progress to increase diverse representation,” Scharf said in Wednesday’s statement. “As I said in June, I have committed that this time must be different.”
The CEO of the largest U.S. bank employer has pledged to double the number of Black leaders over five years and tied executive compensation to reaching diversity goals.
He is also requiring hiring managers to consider diverse candidates for high-paying roles that are vacant, and ensure diversity on interview teams.