An endorsement from one of the greatest value investors of our generation, and a big owner of shares in Wells Fargo, usually is worth its weight in gold.
However, despite a ringing endorsement from Warren Buffett, Tim Sloan — a longtime Wells Fargo executive who replaced beleaguered CEO John Stumpf back in 2016, [1]amid a furor over thousands of fake accounts created by salespeople to meet quotas — announced his retirement on Thursday, the bank said.
The unexpected retirement announcement came just minutes after Buffett, during a Thursday afternoon interview at the Gatehouse’s Hands Up for Success luncheon in Grapevine, Texas, affirmed his support of the bank chief: “Yes, 100%,” Buffett told CNBC’s Becky Quick. Less than two hours later, Sloan had stepped down.
Buffett’s Berkshire Hathaway BRK.A, -0.01%[2] BRK.B, +0.11%[3] is the largest shareholder in Wells Fargo WFC, -1.57%[4] holding about 8.7% of the bank’s shares outstanding, according to WhaleWisdom[5].
Read: Wells Fargo announces plan to cut tens of thousands of jobs[6]
News of Sloan’s retirement sent shock waves through Wall Street, given that the CEO hadn’t just scored the imprimatur of investors like Buffett but had also received the backing of the San Francisco bank’s board numerous times[7]. He will be replaced on an interim basis by the bank’s general counsel, C. Allen Parker[8].
Sloan had been charged with the task of repairing the 167-year-old bank’s badly tarnished reputation, but regulators and lawmakers say his efforts to rectify cultural problems at the bank, including its improper sales practices, weren’t coming fast enough.
Wells Fargo agreed to pay $575 million[9] to all 50 states and the District of Columbia for its fake-account scandal.
Sen. Elizabeth Warren, the Massachusetts Democrat who is running for president, has been one of Sloan’s most vocal critics, charging that the he, as CFO and COO[10], “helped enable” its fake-account scandal.
On Thursday, Warren tweeted that it was “about damn time“ that the Wells CEO stepped down: “Tim Sloan should have been fired a long time ago. He enabled Wells Fargo’s massive fake accounts scam, got rich off it, & then helped cover it up. Now—let’s make sure all the people hurt by Wells Fargo’s scams get the relief they’re owed.” She had repeatedly called for his ouster[11].
About damn time. Tim Sloan should have been fired a long time ago. He enabled Wells Fargo's massive...