NEW YORK (AP) — Wells Fargo’s embattled CEO John Stumpf is stepping down as the nation’s second-largest bank is roiled by a scandal over its sales practices.
The San Francisco bank said Wednesday that Stumpf is retiring effective immediately and also relinquishing his title as chairman. He won’t be receiving severance pay and the bank announced earlier that he will forfeit $41 million in stock awards.
Wells Fargo’s chief operating officer, Tim Sloan, will succeed Stumpf as CEO and join the company’s board. Sloan has been with Wells Fargo for 29 years. Stephen Sanger, the bank’s lead director, will serve as the board’s non-executive chairman.
Stumpf’s end at Wells Fargo comes a little over a month after the bank was fined by California and federal regulators $185 million over its sales practices.
The regulators alleged employees trying to meet aggressive sales targets opened bank and credit card accounts, moved money between those accounts and even created fake email addresses to sign customers up for online banking — all without customer authorization. Debit cards were issued and activated, as well as PINs created, without customers’ knowledge.
“I wish I could snap my fingers and make everything all right again, but it’s going to take time,” said Sloan said in an interview. “We are going to make it right by our customers and we are going to work to win that trust back.”
Stumpf, a 34-year veteran of the bank who took over as CEO in 2007, had previously gained acclaim for navigating Wells Fargo through the financial crisis and keeping it free of scandal. But he came under withering pressure over the alleged misconduct, believed to have gone on at the bank for years. Some 5,300 lower-level employees were fired.
“While I have been deeply committed and focused on managing the company through this period, I have decided it is best for the company that I step aside,” he said in a prepared statement Wednesday.
Among Stumpf’s critics, Democratic Sen. Elizabeth Warren of Massachusetts told him at a Senate Banking Committee hearing last month that he should resign and “give back the money you took while the scam was going on.”
News of Stumpf’s departure, however, did little to quell some lawmakers’ anger over the affair or their demands for information from the company on how harmed customers and employees will be made whole.
“We are still waiting for answers as to how Wells Fargo plans to right its wrongs against customers and the low-paid employees who weren’t given the benefit of a retirement package when they were fired for refusing to cheat,” said Ohio Sen. Sherrod Brown, the Senate Banking Committee’s senior Democrat.
Stumpf earned $19.3 million last year. But he and Carrie Tolstedt, the executive who ran the retail banking division, will forfeit millions.
Tolstedt announced in July that she would retire from the bank this year and had been expected to leave with as much as $125 million in salary, stock options and other compensation. She was stripped of $19 million of her stock awards, and her departure was made immediate.
The revelations have sparked investigations by federal agencies. The bank’s independent directors have also launched their own investigation.
Wells Fargo is scheduled to report its quarterly results Friday morning. In after-hours trading, its stock rose 76 cents, or nearly 1.7 percent, to $46.08.
AP Business Writer Marcy Gordon contributed to this story from Washington.
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This Week’s Celebrity Instagrams (10/7-10/14)
25 photos Launch gallery
1. Nite | to the tune of @cnn 😞
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2. Got so much work to do but I just wanna stay in bed and binge watch #Gameofthrones and start the new season of #OnceUponATime. I know I can't be the only one. Right? Ha 💤🦁🍂 #saturday
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3. Mommy's weekend turn up ❤️👶🏾💕🍼 Wouldn't trade it for nothing. #TeamNoSleep lol #HesMyBiggestBlessing ✨
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4. One of them oh shit mont we made it feelings … this shit still be unreal 💯💪🏾 @remyboymonty1738
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7. They want to kick you when you down, but kick it when you up
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8. Got my advance copy of #Mafia3 at @gamestop. Get yours via link in the bio #Mafia3 #Ad
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9. This is some of the cast and our diverse team of writers in the writer's room creating funny sh*t for @nbcmarlon what a fun room! Lots of jokes, great stories and having a great time doing what we love... making people laugh and feel something. Look out for our show next year @nbcmarlon we bringing sitcoms back to NBC
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10. #HappySunday☀️Thank you @4everbrandy101 💛💡💛
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11. Happy to be back in Central Falls, RI breaking ground for the One Stop Health Center and hosting a local community event with #Vaseline.
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13. Moms got my back
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15. 🌹#ThisIsWhatTheTruthFeelsLikeTOUR #forevereve
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16. Yes, all those videos I've been posting have led to this: the introduction of skincare to @TYRABeauty! This is the rundown on the new line:Years of research and beauty tips I live by led me to produce the most effective and delightful skincare out there. I'm all about taking really good care of my skin, so I can look like I'm aging in #TyraYears and go filter free on Instagram when I feel like it! Now, it's your turn. ✨My Mama always told me not to wash my face with just my hands. "Tyra, girl, you're just moving the dirt around!" And I've listened. First up is The Clean Machine.... ...a 3-in-1 foaming face wash that cleanses, removes makeup and purified your skin. It has patented technology - a attached Turbo Cleansing Tool - to give you that deep clean that makes your skin feel super fresh. Wanna know more? Yeah, baby. Click that link in my bio.
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17. On set of #beingmaryjane like... ❤️😬💃🏾
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19. I refuse to let a little cold stop me from my daily routines to greatness. #onlythestrongsurvive #warriors
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20. Big things begin with big THINKING... #BusinessEthics #SetLife 🎥
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21. Goodnight - here's a song
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22. Words can't explain the feeling that I have right now.....God is good. look momma I made it. #Harts #Blessed #WhatNow #comedicrockstarshit #4DaysAway
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23. I tried to get a better video with out the nasty bib but she started getting mad at me..lol! Big cuz @the_queen_caitlin trying to show her what to do. #MamasToots #HeirBear👑💜
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24. Gorgeous Serena joined Beyoncé in Formation last night on stage in New Jersey!!!
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