Maxine Waters says Wells Fargo should fire its CEO

Maxine Waters says Wells Fargo should fire its CEO
© Greg Nash

Rep. Maxine WatersMaxine Moore WatersSupreme Court rulings reignite Trump oversight wars in Congress On The Money: Mnuchin, Powell differ over how soon economy will recover | Millions fear eviction without more aid from Congress | IRS chief pledges to work on tax code's role in racial wealth disparities Millions fear eviction without more aid from Congress MORE (D-Calif.) on Thursday said Wells Fargo should fire president and CEO Timothy Sloan after the bank announced it would boost his pay a day after he was grilled by the congresswoman’s House committee.

Waters, head of the House Financial Services Committee, said Sloan “should be shown the door” and renewed her call for federal regulators to consider canning the bank’s chief.

Wells Fargo revealed in a regulatory filing Wednesday that Sloan received $18.4 million in compensation last year, including a 5 percent pay raise and $2 million bonus. He was paid 284 times more than the median salary of a Wells Fargo employee.

Waters said Wells Fargo’s decision was “outrageous and wholly inappropriate” after the bank paid billions in fines from regulators and legal settlements in 2018.

Sloan testified before the Financial Services committee on Tuesday, where he faced bipartisan backlash over Wells Fargo’s recent string of sales scandals. While Sloan said the bank had made major improvements, he failed to convince Waters and dozens of her colleagues.

“It was very clear from Mr. Sloan’s testimony that Wells Fargo has failed to clean up its act,” said Waters.

She plans to reintroduce a bill that would break up big banks with track records of consumer abuse.

Wells Fargo declined to comment.

Sloan was paid notably less than several other big bank chiefs, including JP Morgan Chase’s Jamie Dimon ($31 million), Bank of America’s Brian Moynihan ($26.5 million) and Citigroup’s Michael Corbat ($24 million), according to regulatory filings.

But Wells Fargo has also faced unprecedented federal penalties, including a growth restriction from the Federal Reserve preventing the bank from adding to its $1.87 trillion in assets.

The Fed and Office of the Comptroller of the Currency (OCC), which rarely speak out on enforcement issues, both rebuked Wells Fargo following Sloan’s hearing.

OCC spokesman Bryan Hubbard said Tuesday that the bank regulator “continue[s] to be disappointed” with the bank’s “performance under our consent orders and its inability to execute effective corporate governance and a successful risk-management program.”

A Fed spokesman told Reuters on Wednesday that the central bank does not approve pay packages. "We expect boards of directors to hold management accountable,” the spokesperson said.

Sloan, who’s been with Wells Fargo for more than three decades, took over as CEO after former chief executive John Stumpf retired in October 2016. Wells Fargo a month earlier had been fined $185 million by the Consumer Financial Protection Bureau (CFPB) for opening and charging customers on more than 1 million accounts without their consent.

Wells Fargo also paid $1 billion in fines to the CFPB and OCC to settle allegations that the bank had charged mortgage borrowers inappropriate fees and forced loan customers to purchase unnecessary auto insurance.