Wells Fargo CEO John Stumpf to Retire Amid Heavy Criticism

Wells Fargo CEO John Stumpf is planning to retire his position and be replaced by company President Tim Sloan, according to CNBC.

The bank has faced harsh criticism after it was revealed that employees had been creating fraudulent accounts for customers, behavior which according to many reports was due to unrealistic and intense expectations driven by management.

According to Jane Wells, a correspondent for CNBC, Wells Fargo's stock has already jumped in price since the news broke:

According to a recent report on the incident by the NPR show "Planet Money," employees even in the company's headquarters were engaging in the improper practices and facing unreasonable demands, the very building where Stumpf has worked.

“I am grateful for the opportunity to have led Wells Fargo,” Stumpf said in a statement. “I am also very optimistic about its future, because of our talented and caring team members and the goodwill the stagecoach continues to enjoy with tens of millions of customers. While I have been deeply committed and focused on managing the Company through this period, I have decided it is best for the Company that I step aside. I know no better individual to lead this company forward than Tim Sloan."

Sen. Elizabeth Warren drew attention to the CEO's role in the scandal during a heated Senate hearing in which she grilled Stumpf for his lack of accountability, shown in the video below. She was particularly critical of the fact that it was lower-level employees who had been fired for their misdeeds, but upper management and Stumpf had faced no consequences.

The New York Times on Tuesday reported that in at least two 2011 cases, bank employees "wrote letters directly to Mr. Stumpf — who became the company’s chief executive in 2007, and its board chairman in 2010 — to describe the illegal activities they had witnessed." However, the Times noted the former CEO has twice testified to Congress "that he and other senior managers only realized in 2013 that they had a big problem on their hands — two years after the bank had started firing people over the issue."

Stumpf, 63, was with Wells Fargo for 34 years, having joined the company in 1982 as part of the former Norwest Bank.

Photo credit: C-SPAN screenshot