Dive Brief:
- Wells Fargo named Charlie Scharf its president and CEO on Friday, ending a six-month search that began after former chief executive Tim Sloan resigned from the scandal-plagued bank in March.
- Scharf, who is the chairman and CEO of Bank of New York Mellon, will begin his role with Wells Fargo on Oct. 21, replacing C. Allen Parker, who is serving as interim CEO.
- Parker will return to his former role as general counsel once Scharf takes the helm.
Dive Insight:
Wells Fargo's announcement puts an end to industry speculation that the country's fourth-largest bank might choose a woman to take the top role.
Reuters reported in April that Wells Fargo's goal was to find a woman who could successfully navigate the bank's regulatory and reputational issues. The company approached Cathy Bessant, Bank of America's chief operations and technology officer, for the top spot, Bloomberg reported in July.
"I am delighted to welcome Charlie as our new CEO," Wells Fargo Board Chair Betsy Duke said in a statement. "Charlie is a proven leader and an experienced CEO who has excelled at strategic leadership and execution and is well-positioned to lead Wells Fargo's continued transformation."
Scharf's target annual compensation at the bank is $23 million, according to a filing with the Securities and Exchange Commission.
That marks a 40% increase from his $16.5 million target pay in his final year at BNY Mellon, according to Bloomberg.
Scharf is also set to receive $26 million in Wells Fargo stock as part of a "make-whole award," intended to replace the value of equity compensation awards he will forfeit from leaving BNY Mellon.
Before his role at BNY Mellon, Scharf served as the CEO of Visa. He also served as CEO of retail financial services at JPMorgan Chase, and was managing director of One Equity Partners, JPMorgan Chase's private investment arm.
"I am honored and energized by the opportunity to assume leadership of this great institution, which is important to our financial system and in the midst of fundamental change," Scharf said in a statement. "I have deep respect for all the work that has taken place to transform Wells Fargo, and I look forward to working closely with the board, members of the management team, and team members. I am committed to fully engaging with all of our stakeholders including regulators, customers, elected officials, investors, and communities."
As Scharf prepares for the new role, he faces the tough task of dealing with the repercussions of a series of high-profile scandals, as well as regulator scrutiny.
The San Francisco-based bank is reeling from a 2016 scandal during which employees opened millions of fraudulent accounts to receive sales-based incentives.
Additional negative press followed over questionable practices in Wells Fargo's auto insurance, mortgage and wealth management divisions.
And an August report by The New York Times revealed that a policy allowed Wells Fargo accounts to remain open even after customers thought they had closed them, resulting in some customers being charged thousands of dollars in overdraft fees. The series of missteps, combined with Sloan's departure, have taken a toll on the bank's stock, which lost almost $24 billion since March, according to Bloomberg.
The bank is also operating under growth restrictions set by the Federal Reserve in response to what the regulator called the bank's "consumer abuses and compliance breakdowns."
Wells Fargo is not allowed to hold total assets above the $1.93 trillion it had at the end of 2017, a cap that remains in place through at least the end of this year.
