Name: How Wells Fargo’s CEO Is Going to Save the Bank
Uploaded: 2017-06-09
Duration: 7 min 1 s
Description: Tim Sloan replaced John Stumpf in October 2016.

Did you steal? Our people did not do what was right. That's not my question. Did you steal? I wanna know if you and I are on the same page. Did Wells Fargo employees steal from a million to 2 million, of their customers? Yes or no? In some cases they did. What I think is, Wells Fargo was making a lot of money Off what you were doing. And I think you were hoping that you didn't get caught. How did your life change last October, when John Stumpf abruptly retired. And suddenly, you were the CEO? As you know, Jeff, we were in the midst of a succession process. In November of 2015, I was promoted to president chief operating officer. And we had done that historically as we were going through a succession process. But getting back to October, John made a very courageous decision for the company, right? And he said, gosh, I think I'm the problem. And because I'm the problem, I can't really be part of the solution. Fair or unfair, that was a very courageous decision. And so my succession was accelerated. For sure. It's daunting to step into that role in any time frame. But that quickly? And in that environment? It was terrifying, to be honest with you. The good news is I'm part of Wells Fargo. We have a great management team. We got together, we put together a plan, we're executing on the plan. It's an honor to be in this role so I just, every morning I wake up and I can't believe I'm the CE CEO of Wells Fargo regardless of where we find ourselves in any given day. What did you think would happen last September 8th when this news was announced? Because I'm struck by the fact that the stock on that date actually went up a little bit. Investors initially didn't think this was gonna be a big deal. You knew the announcement was coming, what did you think? Well the short answer is we didn't know. And the reason that we didn't know is, not necessarily because of issues in and around Wells Fargo, it was just the environment that we were in. It seems like a long time ago, but we were in the midst of a very contentious election, it was a lot of bickering on both sides of the aisle. And Unfortunately, and this is not us blaming. We're responsible for what happened. We became an issue in the election. Of course, what you're referring to is that your CEO at the time John Stump was called to testify before House and Senate committees. And at the time he was pilloried for saying [ BLANK_AUDIO ] This was immaterial to the performance of the company. Well, here we are. Company's still making over $ 5 billion a quarter. Mm- hm. 5. 5. $ 5. 5 billion. Yeah. In the most recent quarter. The stock is actually above where it was just before the news broke. Deposits, which are a barometer of trust, are at an all time high. Could it be that he was right? Well, I think that when you look at it from a financial and operating results perspective, yes. But I think when you look at it from a reputational standpoint in terms of how our customers feel about us, how team members feel about us, how other stakeholders feel about us, there clearly was some impact, and that's where we're very focused in terms of rebuilding trust. You have said, in this regard, that getting the culture right is really at the top of your to do list right now. How do you fix a culture that At the front lines, at some point, said that creating fake accounts is okay. Well, I think that's probably going a little bit too far. First, when you think about where we had issues within the company, they were primarily driven in our retail banking business. That's a portion of Wells Fargo; we have a wholesale banking business, and a wealth and investment. Business, and we have a consumer lending business, and so on. So the issues were primarily focused there. And I think it was an incentive plan that drove the wrong behavior. It didnt' drive the wrong behavior in every interaction with every customer, but To your point about culture I think that we're taking it very seriously. Again, I've been here for 30 years. I'm proud of a lot of the Wells Fargo culture. But given the challenges we've had, it's certainly an opportunity to step back. So one of the workstreams we have is that we have just sent out to 273, 000 team members a culture survey. It's a 20 to 30 minute exercise, we're asking a lot of very hard questions in a very thoughtful way we brought in a third party to help us design that survey. So it's different than what we've done in the past and then when we get back that information we're gonna review it, we'll make changes and in the feedback beyond just the culture survey Is really important. We've got to get out more often. Meaning we the senior leadership in our branches, in our call centers, in our offices. I love going into our branches and I do it in a surprising way and don't give notice and so on Getting out there and interacting with our team, and asking them how they're feeling and doing is the best way from my perspective to do that. There was another part of the cultural issue apart from what happened at the front lines. Because higher up, there had been evidence of Trouble in this regard, accumulating for 10, 15 years, and not enough was ever done about it. How do you address that? Well, that's a really good point, and it was an issue that was highlighted in the board report, from the independent directors. And that is much more of an organizational Issue and one that we've dealt with. So when I mention many of the changes that we've made, one of the fundamental changes is that we removed or moved many of our enterprise functions, and some of the enterprise risk functions out of the business line. So Human resources, risk in all forms would be two great examples, I could go on. And the point there was to create a better check and balance from a process point of view, so that if there was an issue in a business Not only would it rise to the head of the business but it would also rise to the head of HR or the head of risk. So if I understand this properly it used to be that, for example, the Chief Risk Officer in the retail bank would report to the head of the retail bank. That's correct. Now that person reports to the corporate [ CROSSTALK ] Correct. That's exactly right, Joe. Yeah. [ BLANK_AUDIO ]

Tim Sloan replaced John Stumpf in October 2016.