Given all the turmoil at Wells Fargo, its reigning CEO John Stumpf has decided to call it quits. But now there’s more happening.
It’s no secret that Wells Fargo has lost several of its customers, along with much of the company’s long-standing reputation.
While many people have demanded that John Stumpf step down from his position, it seemed as if he intended on staying with the bank. However, on Wednesday afternoon, the company announced that Stumpf made the decision to leave his position.
Yet, there are some provisions that come with his retirement.
John Stumpf’s Retirement Package
Retirement? Severance? John Stumpf?
These are three concepts standing remotely distant from one another.
According to The Wall Street Journal, John isn’t receiving a severance package. Moreover, while Wells Fargo’s ex-CEO will utilize his acquired earnings from his years with the company, it’s possible that Stumpf’s retirement pension could take another hit in the future.
As you probably know, John already agreed to “relinquish” $41 million in stock, stock options, and retirement benefits. However, potentially, the board could require Stumpf to release something to the tune of $24 million extra from the aforementioned pension.
Yet that particular decision is based on how John’s investigation plays out.
Overall, John Stumpf’s saved earnings add up to $120 million over his 35 years with Wells Fargo.
Who Is Stumpf’s Replacement?
John was with the company a long time and put in a lot of hours. However, while Stumpf is stepping down from the position, someone else is stepping up to the plate.
Timothy J. Sloan, Wells Fargo President and Chief Operating Officer, is taking over the company. Many say that it’s not a surprising step, as Sloan was thought to be John Stumpf’s heir to the throne anyway.
The Wall Street Journal notes that John maintained the CEO position for 10 years within his three-decade-plus time at Wells.
Nevertheless, Stumpf and Sloan aren’t the only ones changing positions. There’s also a changing of the guard among its chairpersons.
According to the source, Stephen Sanger and Elizabeth Duke are moving into position as chairman and vice chairman of the board, respectively.
Sanger was Wells Fargo’s lead independent director, under the supervision of John Stumpf. On the other hand, Duke is the “current director and former Federal Reserve governor,” says the source.
What Really Made John Stumpf Call ‘Retirement’?
Well, Wall Street Journal notes that Stumpf officially told the board about his retirement via a half-page letter, during sometime on Wednesday. The source notes as follows.
“In the letter, Mr. Stumpf said he wouldn’t sell any of the shares he already owns before the end of the board’s independent investigation, this person said, adding that those shares could also be clawed back depending on the results of that investigation.”
However, Sloan also mentions Stumpf’s retirement decision as “the best thing for the company.” He says it’s time for Wells Fargo “to pivot in a new direction.”
Unfortunately, the board seemingly felt that John was “becoming a bit of a distraction,” says Sloan.
With Stumpf out of the picture, Wall Street Journal mentions that Sloan plans to “address customers’ concerns, remediate customers who were improperly charged fees and ensure the bank has the right products and services available to them.”
Several customers have voiced their opinions on John Stumpf’s retirement plans. One, in particular, was Elizabeth Warren — the Massachusetts Senator who verbally punished Stumpf in front of Congress.
CNBC reports that she went on a further rant after John Stumpf turned in his resignation.
Honestly, retirement has its perks with the right people. However, Stumpf might not be one of those individuals.
But then again, he does walk away with over $100 million. Can’t be that bad, can it?
What are your thoughts regarding John’s retirement call? Feel free to share them in the comments below.
[Featured Image via Mark Wilson/Getty Images]