Wells Fargo names BNY Mellon’s Charles Scharf CEO to lead turnaround
Wells Fargo & Co. named Charles Scharf chief executive officer, marking a new era in the bank’s efforts to turn itself around after a series of scandals claimed two previous CEOs in the past three years.
Scharf, the CEO of Bank of New York Mellon Corp., will take over on Oct. 21, replacing interim CEO Allen Parker, the San Francisco bank said Friday in a statement. Scharf will also hold the title of president.
“With more than 24 years in leadership roles in the banking and payments industries, including as CEO of Visa Inc. and Bank of New York Mellon, Charlie has demonstrated a strong track record,” Wells Fargo Chair Betsy Duke said in a news release.
Scharf, 54, will be charged with mending ties in Washington, where Wells Fargo’s problems are hardly over: The bank still faces several investigations and outstanding consent orders, including a growth restriction imposed by the Federal Reserve.
He is also inheriting problems in some of the company’s core businesses. Revenue dropped in four of the past six quarters, and loan balances have been falling over the past two years. JPMorgan Chase & Co. has pulled ahead of Wells Fargo in consumer banking, generating about $2 billion more from the business. Two years ago, Wells Fargo was ahead by almost $1 billion.
“I have deep respect for all the work that has taken place to transform Wells Fargo,” Scharf, a longtime protege of JPMorgan CEO Jamie Dimon, said in the release. “I am committed to fully engaging with all of our stakeholders including regulators, customers, elected officials, investors and communities.”
Wells Fargo has brought in several JPMorgan veterans, including Chief Risk Officer Amanda Norton, as it turned over its top ranks in the last three years.
Scharf joined Visa as its CEO in November of 2012 after a decade at JPMorgan, where he led retail banking before taking over an investment arm. He oversaw Visa during a time when the industry’s profits snowballed as consumers around the world increasingly turned to electronic payments.
But Scharf resigned from Visa in 2016 to be closer to his family on the East Coast. He’ll run Wells Fargo from New York, according to the release.
At Bank of New York, he struggled to turn the trust and custody bank around, as shares are still below where they were when he took over more than two years ago.
Wells Fargo’s board of directors has conducted a months-long search for someone outside the bank to fill the top slot after Tim Sloan abruptly stepped down in March, bowing to pressure from regulators, politicians and investors. Allen Parker, the bank’s general counsel who joined in 2017, has been running the bank since then.
Scandal erupted at the San Francisco-based company in 2016, with the revelation that employees had opened millions of potentially fake accounts to meet sales goals. The ensuing fallout claimed then-CEO John Stumpf, and the board chose Sloan, a three-decade Wells Fargo veteran and Stumpf’s heir apparent, to take the top job.
Problems emerged in more business lines during Sloan’s time at the top, prompting additional scrutiny and calls for his ouster from lawmakers including Massachusetts Democrat Elizabeth Warren. The rebukes from politicians and regulators got louder, culminating in a congressional hearing and a pair of public criticisms from the Office of the Comptroller of the Currency and the Federal Reserve in March. Sloan announced his retirement days later.
BNY Mellon immediately named Thomas P. "Todd" Gibbons, a 30-year veteran of the company, as interim CEO to succeed Scharf; he was added to the board of directions, also. Gibbons was chief financial officer of the company for nine years and most recently had been vice chairman of clearing, markets and client management.
The trust bank also named Joseph Echevarria, a director since February 2015, as nonexecutive chairman.
"We thank Charlie for his contributions to BNY Mellon," Echevarria said in a news release. "We look forward to the continuity provided by Todd's appointment. Todd is an accomplished and respected leader who is well known to all of our stakeholders. He has been a driving force behind the development and execution of our strategic vision and transformation, and that will continue."
Managing Editor Dean Anason contributed to this article.