Did Wells Fargo's CEO Stumpf 'Take One For The Team?'

Wells Fargo & Co WFC needed to do something drastic to its management roster to put behind its fake-account opening style. According to Gadfly's Michael Regan, it was "obvious" that the bank's CEO John Stumpf couldn't contain the backlash if he continues to serve as the company's highest ranked executive.

Regan noted that Stumpf's "retirement" was "probably the only thing" Wells Fargo could do at this point in time. After all, his reign as CEO is characterized by a large scandal, multiple investigations and lawsuits, a bipartisan inquiry from Congress and the loss of notable relationships with the state of California and Illinois.

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He added that Stumpf may be the "right right fall guy," and a new management team is well positioned to operate the bank.

Specifically, Tim Sloan, Wells Fargo's president and chief operating officer will now take over as CEO. His background in corporate and institutional investor clients gives him "enough distance from the troubled, but more important, retail side of the firm to potentially allow him to ascend to the top."

Elizabeth Duke, a former member of the Federal Reserve's Board of Governor, will serve as vice chair and this "adds some gravitas."

This doesn't mean that the job is done and marks an end to the scandal — far from it. Regan suggested if "more heads need to roll, so be it" and "if more pay should be clawed back, so be it."

Meanwhile, Stumpf's best possible outcome from this whole fiasco could be seen as an error in judgment. What he saw as a "minor problem" involving just 1 percent of branch employees was viewed as Main Street as a "gigantic problem" involving 5,300 workers.

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