After massive criticism from lawmakers and many people across the world, John Stumpf has resigned as chairman and chief executive of Wells Fargo & Co. The company has been involved in one of the biggest scandals a bank has ever committed, when its employees created as many as 2 million accounts without the authorization of its customers.
A Los Angeles Times investigation team uncovered the story and it ended up with Wells Fargo owing a $185-million settlement with regulators last month.
Stumpf, 63, had been chief executive since 2007 and he was chairman of Wells Fargo’s board since 2010. President Timothy J. Sloan, 56, will immediately replace Stumpf as chief executive.
“Our reputation has been impacted by some of the mistakes we made in our retail banking business,” said Sloan, who has been with the bank for 29 years. “We’ll regain our customers’ trust and continue to grow.”
According to filings, Stumpf will retain more than $100 million in vested stock, plus accumulated pension and 401(k) benefits exceeding $24 million.
“I am grateful for the opportunity to have led Wells Fargo,” Stumpf said in a statement. “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. I know no better individual to lead this company forward than Tim Sloan.”
Chairmanship will go to former General Mills executive Stephen Sanger, who is now the company’s lead independent director.
Disclaimer: We have no position in Wells Fargo & Co (NYSE: WFC) and have not been compensated for this article.