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People walk by a Wells Fargo bank branch on October 13, 2017 in New York City.
Tim Sloan is out at Wells Fargo, setting off a rare event when it comes to big American banks: An external search for a CEO.
The journey begins Friday, according to the bank’s chair, Betsy Duke. His replacement will have to regain the credibility lost after the lender’s fake accounts scandal helped to unearth a series of problems across the bank’s sprawling operations, according to analysts and investors.
Most of the time, when the CEO of a big bank retires, the company’s board has already picked a successor, and that person is usually already working at the bank. That happened recently when Goldman Sachs’ Lloyd Blankfein resigned after 12 years and president David Solomon was made CEO.
The last time an American megabank entertained outside leadership was when Bank of America’s Ken Lewis abruptly announced he would resign during the financial crisis. That job eventually went to an internal candidate, Brian Moynihan.
Wells Fargo’s next leader will have to be comfortable working under the glare of regulator tops, politicians, media and customers. During his four-hour Congressional drubbing, Sloan said that the bank was operating under no less than 14 consent orders from regulators.
Still, much of the cleanup job has probably been done under Sloan’s two and a half year tenure, and the new executive would enjoy a honeymoon period. And the lure of suddenly vaulting to the top of the nation’s fourth biggest bank — a behemoth with $1.9 trillion in assets — at a crucial moment in the industry’s evolution could be too hard to resist.
The first place to look, according to industry watchers, is at rival J.P. Morgan. The biggest U.S. bank by assets has been a training ground for CEOs, helping seed Barclays, Standard Chartered, Visa and First Data with their leaders.
