In the end, the pressure was more than Wells Fargo CEO John Stumpf could bear.
Little more than a month after a massive scandal erupted over employees creating fake customer accounts, Stumpf told the board he was retiring today (Oct. 12). His departure is effective immediately, the company said in a statement.
Stumpf is being replaced by Wells Fargo chief operating officer Tim Sloan. Sloan has spent much of his career in the bank’s wholesale division, which focuses on commercial and real estate lending, and not in the retail unit where the scandal unfolded. Stephen Sanger, an independent board member, will replace Stumpf as chairman of the board
On Sept. 8, Wells Fargo disclosed it was paying a $185 million fine to the Consumer Finance Protection Bureau and other agencies after it was revealed that employees opened more than 2 million accounts in their customers names without their knowledge. The bank fired 5,300 low-level employees and hoped to contain the damage by pledging to end the high-pressure sales culture that led so many workers to cheat.
Early on, Stumpf’s job appeared safe, particularly given his success in growing the bank into the world’s largest. But Stumpf was excoriated in two hearings before Congress, which was unconvinced that he understood the gravity of the problem and furious that no senior executives were taking responsibility. Allegations that the fraudulent behavior occurred much earlier than first disclosed— the New York Times reported it dated to at least 2005—may have been too much for the board to countenance.