Wells Fargo CEO escapes fake accounts heat for early retirement

A 34-year career with one of America’s biggest banks comes to an end...

Wells Fargo CEO escapes fake accounts heat for early retirement

Former Wells Fargo CEO John Stumpf testifies on Capitol Hill in Washington. Picture by Cliff Owen AP/Press Association Images

John Stumpf has buckled under a month's worth of pressure and calls for his resignation as chairman and CEO of Wells Fargo, announcing that he is retiring from the bank, effective immediately. Stumpf’s position was made untenable following revelations that bank employees had opened two million credit and debit card accounts without informing their customers.  

Tim Sloan, who was chief operating officer with Wells Fargo and has been with the firm for over a quarter of a century, has taken over as CEO. Splitting Stumpf's old role, Stephen Sanger has been named nonexecutive chair, with Elizabeth Duke becoming vice chair.

Spearheading the public campaign against Stumpf was Massachusetts Senator Elizabeth Warren, who not only called for his resignation two weeks ago, but also a criminal investigation into his role in the scandal. 

Warren wants both the US Department of Justice and Securities and Exchange Commission to look into whether he knowingly misled investors by not disclosing in financial statements that fake accounts had been opened.

In September, Wells Fargo was hit with a $185 million fine after it was revealed that thousands of its employees felt under such pressure to perform that they had opened unauthorised accounts to hit sales goals and receive bonuses.

A record $100m goes to the US Consumer Financial Protection Bureau and $35m to the Office of the Comptroller of the Currency, with the Los Angeles city attorney picking up the remaining $50m for settling the matter.

Wells Fargo has fired 5,300 employees for taking part in the improper practice.

Followings the news that the 63-year-old Minnesotan had retired, Warren tweeted:

Stumpf has forfeited $41m in unvested equity under orders from the Wells Fargo board, but USA Today reports that he is estimated to receive $134.1m for retirement.