Wells Fargo hires New York Mellon’s Scharf as its new CEO
NEW YORK (AP) — Wells Fargo named its third CEO in as many years as it attempts to move on from a series of scandals.
The bank said Friday that Charles Scharf, chief executive of the Bank of New York Mellon, will take over for C. Allen Parker, who has led Wells Fargo since March.
Parker will remain in place until Scharf joins the bank on Oct. 21.
Wells Fargo has been trying to recover from scandals starting in 2016 when it admitted its employees opened millions of fake checking accounts to meet sales goals.
The San Francisco-based bank has been fined repeatedly, including a record $1 billion penalty in 2018 levied by federal regulators for failures in its mortgage lending businesses and for selling auto loan customers insurance policies they did not need.
More importantly, the Federal Reserve last year stepped in and handcuffed Wells’ ability to grow its business until the bank proves it has gotten its house in order.
Tim Sloan, who had been Wells Fargo’s CEO since the scandals originally broke, stepped down after what many considered a poor performance defending the bank in front of Congress in March.
Scharf has been CEO of the decidedly uncontroversial Bank of New York Mellon since July 2017 and previously was the CEO of Visa.
BNY focuses almost entirely on being what’s known as a custodial bank — holding large amounts of assets on behalf of clients. It has no consumer banking business, which is Wells Fargo’s core franchise.
BNY’s quiet nature was on display earlier this year, when several of the big bank CEOs were dragged in front of Congress to discuss how they were doing 10 years after the financial crisis. While members of Congress went after JPMorgan’s Jamie Dimon and Goldman Sachs’ David Solomon, they mostly ignored Scharf and the CEO of his primary competitor, State Street.
Scharf will receive a hefty paycheck for joining Wells. The bank says he will earn a base salary of $2.5 million, plus a guaranteed $5 million bonus and $15.5 million in stock awards that will vest over several years.
“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, said Wells Fargo Board Chair Betsy Duke in a prepared statement.