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Charlie Scharf’s no-nonsense style could create a more stable Wells Fargo

February 3, 2021, 11:33 AM UTC

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Good morning.

Charlie Scharf took over a tough job when he agreed to be CEO of scandal-ridden Wells Fargo. The company had “made a bunch of mistakes,” he says.  And the penalty for those mistakes was a raft of regulatory restrictions that will hobble the bank for years to come. Scharf added his own to that list of mistakes last year, when he put out a memo on the bank’s diversity efforts saying “there is a limited pool of Black talent to recruit from with this specific experience.” Hard to argue you have high standards when your people have been pushing fake accounts on customers.

But as Fortune’s Rey Mashayekhi shows in this in-depth profile, Scharf has brought a no-nonsense style of management to the bank, honed during his years working with JP Morgan CEO Jamie Dimon. And he is moving steadily to enable a smaller, but more stable, bank to emerge from the crisis…eventually. The story is worth reading this morning, here. Best factoid: he’s taken up guitar playing as a respite from the bank’s woes.

Separately, NASDAQ CEO Adena Friedman spoke at the Economic Club of New York yesterday, and defended her new board diversity requirements for NASDAQ-listed companies. The rules have come under some attack—most notably from former SEC Chairman Arthur Levitt, who called them “political at their core.”

Friedman explained that the rules, which call on companies to have two diverse members—one a woman and one a minority—are not a requirement. “If they are not able to achieve that, they should explain to their investors. It’s a ‘have or explain’ rule, not delisting.” And she said 73% of the comments NASDAQ has gotten on the rules are positive, while only 20% are negative.  Seems like the world may be ready for this change, even if Mr. Levitt is not.

More news below, including the biggest of the day—Amazon’s Jeff Bezos will give up his CEO post to his cloud lieutenant, Andy Jassy. And here’s your fun statistic of the day:  from its IPO to Tuesday’s close, Amazon’s stock has risen 255,233%.

Alan Murray


Jassy and Jeff

Fortune has no shortage of Bezos-out coverage. Here's Jonathan Vanian's essential guide to Andy Jassy; here's Phil Wahba on why Amazon's rivals shouldn't rest easy; here's Danielle Abril on Bezos's email to employees; and here's Anne Sraders on that meteoric stock-price rise. And, tangentially, here's Chris Morris on Amazon settling with the FTC after it got caught pocketing tips that were supposed to go to its Flex drivers.

Sputnik V

Stop scoffing at Russia's COVID-19 vaccine efforts: turns out its Sputnik V jab really is effective—so effective that it's in a better-than-90% club of three, with Pfizer/BioNTech and Moderna. That's fantastic news given its relatively low cost; a lot of low-income countries will be counting on Sputnik V. It also creates an interesting vaccine-diplomacy situation for Europe. Fortune

AstraZeneca vaccine

And there's good news too about AstraZeneca's (less effective) vaccine. Still-under-review research seems to show that the first dose of the two-jab vaccine provides 76% protection for at least three months, which would vindicate the U.K.'s decision to space out the shots way longer than the manufacturer recommends. But there's more: it could be that the vaccine cuts transmission by 2/3, which is an effect everyone wants to see. Guardian

GameStop plunge

The plunge in GameStop shares is testing the stomachs of the online investors who propelled them to absurd heights: the price fell 60% yesterday, taking it down 81% from Thursday's peak. Mark Cuban has urged them to keep holding the stock "if you can afford to." New York Times


Biden and labor

Sean Higgins of the Competitive Enterprise Institute writes for Fortune that one of President Biden's first acts last month was "certainly highly unethical" and "probably unconstitutional." Said act was the firing of National Labor Relations Board head Peter Robb—Higgins points out that the NLRB is supposed to be an independent federal agency, whose leaders the president cannot remove at will. Fortune

Microsoft in Australia

Microsoft, whose Bing search engine would benefit hugely if Google makes good on its threat to pull out of Australia, backs the proposed law that has led Google to this point. The new rules would force Google and Facebook to pay news publishers for promoting their content to the public. "While Microsoft is not subject to the legislation currently pending, we’d be willing to live by these rules if the government designates us," the firm said. Reuters

GSK and CureVac

Shortly after Bayer said it would lend its production muscle to CureVac's COVID-19 vaccine candidate later this year, GlaxoSmithKline has also announced a partnership with the German firm. This time, the deal is largely around the next generation of vaccines that will target new variants of COVID-19, though GSK will also help CureVac make up to 100 million doses of its current candidate this year. AP

Bebo's back, alright

Bebo was once the U.K.'s most popular social network, and a big deal in Ireland, Australia and New Zealand too. Now co-founder Michael Birch is planning a relaunch—he and his wife retained rights to the brand, despite the underlying business having been sold to Amazon's Twitch unit in 2019. Birch says the new focus will be on "live" (as in real-time) social networking. BBC

This edition of CEO Daily was edited by David Meyer.