Wells Fargo’s new CEO: ‘We will get it done’
In his first few months on the job, CEO Charlie Scharf has instilled the company with a sense of urgency in addressing its priorities.
Speaking at his first town hall in October, one week into his role as Wells Fargo CEO, Charlie Scharf’s message for the company was clear: “We all have to demand more from each other. The seriousness of what we do brings tremendous responsibility. Our work has tremendous impact upon people. We need to recognize that and make sure that we're doing everything we can to operate the company to the highest standards of operational excellence.”
In the four months since, Scharf has been focused on doing exactly that, bringing on new leaders and reorganizing the company’s structure to ensure clear responsibility and accountability at every level.
Scharf describes that as “the price of admission for what we do.”
“We all have to demand more from each other. The seriousness of what we do brings tremendous responsibility. Our work has tremendous impact upon people. We need to recognize that and make sure that we're doing everything we can to operate the company to the highest standards of operational excellence.” — Charlie Scharf
Building the right foundation
Scharf brings more than 24 years of leadership experience in the banking and payments industries to Wells Fargo, including CEO roles at Visa and Bank of New York Mellon, and has a demonstrated track record in leading change, driving results, strengthening operational risk and compliance, and innovating amid a rapidly evolving digital landscape. At Wells Fargo, Scharf has stressed urgency, accountability, and execution as what will drive the company forward.
Scharf has made addressing Wells Fargo’s regulatory requirements the company’s top priority, acknowledging the mistakes that were made in the past. In February, Wells Fargo entered into agreements with the United States Department of Justice and the United States Securities and Exchange Commission to resolve these agencies’ investigations into the company’s historical Community Bank sales practices and related disclosures. As part of this resolution, Wells Fargo agreed to make payments totaling $3 billion.
As Scharf acknowledged, “At the time of the sales practices issues, the company did not have in place the appropriate people, structure, processes, controls, or culture to prevent the inappropriate conduct,” he said. “This was inexcusable.” While the settlements mark a significant step in bringing this chapter to a close, Scharf said there’s still more work to be done to rebuild the trust the company lost. “We are committing all necessary resources to ensure that nothing like this happens again, while also driving Wells Fargo forward,” he said.
“The company was not prepared to prevent inappropriate conduct. This was inexcusable, and we must ensure such failings never occur again at Wells Fargo.” — Charlie Scharf
The focus on strengthening the company’s control environment goes beyond just meeting the expectations of its regulators. Scharf sees these changes as fundamental for the business going forward. “Meeting our regulatory requirements remains Wells Fargo’s top priority, because it builds the right foundation for all that lies ahead,” he said. “We recognize that what we want and what regulators want are not different. Our future depends on our ability to get this work done.”
A culture of accountability and operational excellence
Also foundational to the future are the cultural changes Scharf is leading at Wells Fargo. In his messages to the company’s employees, he has encouraged them to embrace candor, deliver on their promises by executing flawlessly, and always do the right thing. “Words are nice, but actions are what matter,” he said.
In his first week, Scharf also signed the Statement on the Purpose of a Corporation issued by the Business Roundtable, which acknowledges that businesses are responsible to a broad set of constituents including customers, employees, suppliers, and the communities in which companies operate. He said, “In order to be a great employer, a great and involved partner in the communities where we operate, and contribute in meaningful ways to the growth of the U.S., we must be guided by delivering for our customers every day in a manner that will make us and our stakeholders proud.”
Flatter structure for clearer responsibility and authority
In early February, Scharf unveiled a flatter organizational structure for Wells Fargo, designed to provide leaders with clear authority and responsibility. The new organizational structure has five principal lines of business, each with a CEO who reports directly to Scharf and is represented on the company’s Operating Committee.
As part of the reorganization, Scharf aligned control executives with each of the company’s businesses who will have a dual line of reporting to their respective CEOs and up through a separate operations team. This integrated operations organization is designed to enable the lines of business to work more collaboratively and consistently across the company while ensuring the right level of oversight.
“These changes create the right structure to build our businesses over the long term and increase our ability to successfully execute on our top priority, which is the risk, regulatory, and control work,” said Scharf.
To help chart the company’s future, major changes have been made at the senior leadership level. This has included recruiting top talent to bring fresh perspectives and deep experience to critical roles. Most notably, six current members of the Operating Committee are new to the company, having joined Wells Fargo in January 2017 or later.
Scharf has also moved quickly to bring in a number of new senior leaders who have been tasked with making fundamental changes to improve the culture of the company, including a chief operating officer, CEO of Consumer Lending (expected to join the company in May 2020), and vice chair of Public Affairs, and a new general counsel.
Additionally, searches are underway for a head of the newly formed Corporate Strategy, Digital Platform & Innovation team; a lead control executive; and a new CEO for Wealth & Investment Management.
In addition to the changes made at the senior leadership level, the Board has focused on enhancing its composition, oversight, and governance practices. The Board has conducted a thoughtful, deliberate refreshment process. Over a majority of the Board’s independent directors joined the Board since January 2017, and the Board has rotated six of seven Board committee chair roles. On March 9, 2020, the company announced that Betsy Duke resigned as Chair and member of the Board; Jim Quigley also announced his resignation from the Board. Chuck Noski, is the new Chair. Noski is a retired vice chairman and former chief financial officer of Bank of America Corporation.
Recognizing the criticality of employees in making the changes underway at the company successful, on March 4 Scharf announced that Wells Fargo will be raising the minimum hourly pay in a majority of its U.S. markets. Minimum pay will be tiered based on various factors, including the cost of living in different areas of the country, with the minimum hourly pay ranging from $15 to $20 depending on employee location. The pay increases will go into effect by the end of 2020.
Additionally, Scharf announced a series of expanded actions the company is undertaking to accelerate efforts to build a more diverse and inclusive workforce. Among the commitments:
- A focus on recruitment, hiring, and promotions to increase diverse representation in senior-level roles, particularly with female and racially/ethnically diverse employees.
- A “returnship” program focused on diverse talent who have been out of the workforce for an extended period to support their return to the industry.
- A formal development program for high-potential employees to build a more diverse and inclusive talent pipeline.
- More responsibility for senior leaders to sponsor and lead diversity-focused programs.
- A consistent and regular way to measure diversity and inclusion progress across the company.
The opportunity ahead
While Wells Fargo is undergoing a tremendous amount of change, Scharf is quick to point out that it was his admiration for the company that led him to join as CEO, and he still sees the outstanding potential that lies ahead.
Part of the company’s potential lies in its ability to help customers achieve their own potential. An example of that can be seen in Wells Fargo’s recently announced plan to introduce two new bank accounts that will offer secure banking services and customer support while eliminating or limiting overdraft fees.
The accounts are designed for consumers seeking low-cost bank accounts that help them avoid overspending and keep to a budget, while also providing access to Wells Fargo’s mobile, online, ATM, branch, and phone banking services. The new offerings are a way for the company to help satisfy the financial needs of more customers and further expand access to mainstream banking services, said Mary Mack, CEO of Consumer and Small Business Banking.
On March 5, the company also announced plans to provide access to a suite of credit products to Deferred Action for Childhood Arrivals (DACA) recipients, beginning this year and continuing into 2021. The efforts includes access to education loans, personal lines and loans, credit cards, auto loans, and small business credit. In addition, Wells Fargo will make mortgage and home equity loans to certain eligible DACA customers except where prohibited by specific investors. This expanded credit access was informed by ongoing engagement with the Mexican American Legal Defense and Education Fund (MALDEF), which helped give the bank valuable insight into the needs of young DACA individuals.
Additionally, on March 10, Wells Fargo announced that it is seeking to invest up to $50 million in African American Minority Depository Institutions (MDIs). These investments are part of Wells Fargo’s commitment to supporting economic growth in African American communities where MDIs, often community based banks, provide mortgage credit, small business lending, and other banking services. MDIs play an important role in providing banking services to minority and low and moderate income (LMI) communities. Compared with other financial institutions, MDIs tend to serve communities in which a higher share of the population lives in LMI census tracts and in which higher shares of residents are minorities.
This investment complements Wells Fargo’s Diverse Community Capital (DCC) program, a five-year, $175 million program to empower diverse small business owners with greater access to capital and technical assistance so they can grow and sustain local jobs. The DCC program is a collaboration with Opportunity Finance Network and CDFIs (Community Development Financial Institutions) across the country. To date, the CDFIs in the program have made 124,000 loans, delivered 322,000 hours of technical assistance, and benefited 49,000 small business owners who collectively sustain more than 183,000 jobs in rural and urban markets nationwide.
“I firmly believe we have a great future in front of us,” Scharf said. “We have a group of businesses that are the envy of the industry. We have great market positions in an industry that will continue to grow as we enable our customers to succeed financially. We can and will do the work necessary to create the right environment inside the company to allow us to grow successfully. We know we have some challenges in front of us. I feel very confident that we know what we have to do, and we will get it done.”
Text-only version of timeline
- October 2019
- Oct. 21 — Charlie Scharf officially joins as CEO and president of Wells Fargo and outlines his 10 guiding leadership principles, which underscore Wells Fargo’s responsibility to operate with the highest standards of integrity and fulfill commitments to a broad range of stakeholders.
- Oct. 29 — Scharf signs onto Business Roundtable’s Statement on the Purpose of a Corporation, a clear statement that businesses are responsible to a broad set of constituents.
- November 2019
- Nov. 7 — William M. Daley joins as Vice Chairman of Public Affairs and member of the Operating Committee.
- Nov. 20 — Scharf announces leadership changes in the Payments, Virtual Solutions and Innovation Group, including the appointment of Ray Fischer, formerly of JPMorgan Chase, as head of Cards, Retail and Merchant Services.
- Nov. 25 — Ray Fischer joins as head of Cards, Retail and Merchant Services.
- December 2019
- Dec. 2 — Christel Kennedy joins as head of Business Continuity and Resiliency to help govern and execute the company’s Business Continuity Program and continue to integrate and strengthen the bank’s Corporate Security infrastructure.
- Dec. 9 — Scott Powell joins as Chief Operating Officer, a new position created by Scharf to oversee regulatory execution and relations, enterprise shared services, and a range of operational functions across the company, and serve on the company’s Operating Committee.
- Dec. 9 — Scharf also announces plans to expand his leadership team to further build the company’s operations and controls, including a lead control executive to oversee control personnel across the enterprise, and a strategy and operations planning leader.
- Dec. 13 — Muneera Carr joins as Controller to manage corporate tax, accounting, and reporting, as well as activities such as financial controls and oversight policies, and processes for the company’s business groups and enterprise functions.
- January 2020 — Wells Fargo launches a transformational human resources program, New Experience for the Team (NEXT) HR. Under this multiyear program, the company will invest in leading technology and create policies to create a consistent team member experience globally.
- Jan. 21 — Wells Fargo receives top honors for the second consecutive year by the Bloomberg 2020 Gender-Equality Index.
- Jan. 21 — The Human Rights Campaign also awards Wells Fargo a 100% rating and the designation of being a “Best Place to Work for LGBTQ Equality” for the 17th year in a row.
- February 2020
- Feb. 4 — Michael Cleary joins the COO leadership team as head of Sales Practices Oversight and Management to help ensure Wells Fargo has the right sales practices policies and procedures in place and customers have the necessary support when problems arise.
- Feb. 11
- Feb. 11 — Scharf unveils a flatter organizational structure that reorganizes leader responsibilities. This includes creating five principal lines of business to ensure clear authority, accountability, and responsibility. All line of business leaders will report directly to Scharf and will sit on Wells Fargo’s Operating Committee.
- Feb. 11 — Scharf forms the new Corporate Strategy, Digital Platform & Innovation team to enhance the company’s focus on planning for the digital future and investing in the customer experience. The company is conducting a search for this new leader role, which will report to the CEO.
- Feb. 11 — Scharf announces that Mike Weinbach will join as CEO of Consumer Lending, which includes many of the products Wells Fargo’s customers interact with most closely — from home and auto loans to personal lines of credit.
- Feb 11 — Andrew Heller joins as Strategy and Operations Planning leader, reporting to COO Scott Powell.
- Feb. 18 — Scharf unveils an updated Risk Management Framework, a foundational document that includes clear and concise instructions on the approach to risk management across the company.
- March 2020
- March 3 — Wells Fargo announces plans to introduce two bank accounts in 2021 that expand access to mainstream banking services: a checkless, no-overdraft-fee account, and an account that includes checks and will cap overdraft or insufficient funds fees at one per month.
- March 5 — Wells Fargo announces it will provide access to a suite of credit products to Deferred Action for Childhood Arrival (DACA) recipients beginning this year and continuing into 2021.
- March 6 — Scharf announces a set of initiatives to accelerate the company’s building of a more diverse and inclusive workforce, including programs designed to increase diverse representation in senior-level roles.
- March 9 — Wells Fargo announced Chuck Noski as new Chair of the Wells Fargo Board of Directors following the resignation of Betsy Duke, who had been Chair; Jim Quigley also announced his resignation from the Board. Noski is a retired vice chairman and former chief financial officer of Bank of America Corporation.
- March 10 — Scharf announces that Wells Fargo plans to invest up to $50 million in African American Minority Depository Institutions. This investment is part of Wells Fargo’s commitment to African American communities.
- March 13 — Scharf announces that Ellen Patterson will join Wells Fargo as general counsel, overseeing all legal affairs as a member of the Operating Committee and reporting to the CEO.
- October 2019
For more about the company’s progress, see “Wells Fargo: Charting a New Future” (PDF).
New leaders at Wells Fargo
Charlie Scharf joins as Wells Fargo CEO and President
On Oct. 21, 2019, Charlie Scharf officially started his role as CEO and president.
With more than 24 years in the banking and payments industries — including most recently holding the position of chairman and CEO of Bank of New York Mellon, and prior to that, CEO of Visa — Scharf has a proven track record of initiating and leading change, driving results, strengthening operational risk and compliance, and innovating amid a rapidly evolving digital landscape, said Wells Fargo Board Chair Betsy Duke. Prior to his roles at BNY Mellon and Visa, Scharf held leadership positions at JPMorgan Chase, Bank One Corp, Citigroup, and Salomon Smith Barney.
“Charlie’s financial and business acumen, integrity, passion for diversity and inclusion, and commitment to strong talent management are important qualities considered by our board’s search committee,” Duke said. “I am delighted to welcome Charlie as our new CEO. Charlie is a proven leader and an experienced CEO who has excelled at strategic leadership and execution and is well-positioned to lead Wells Fargo’s continued transformation.”
William M. Daley joins as Vice Chairman of Public Affairs
On Nov. 13, 2019, Bill Daley joined as vice chairman of Public Affairs and member of the Operating Committee. In this role, Daley leads Corporate Communications, Government Relations & Public Policy, Sustainability & Corporate Responsibility, and Corporate Philanthropy & Community Relations.
Daley brings extensive experience in both the public sector and business, including serving as Chief of Staff to President Barack Obama and Secretary of Commerce in the Clinton administration. In addition, he served as Vice Chairman of BNY Mellon and as a member of the bank’s Executive Committee, as Vice Chairman and a member of the Executive Committee at JPMorgan Chase, and as President of SBC Communications (now AT&T).
“My experience with Bill is that he does not think like a banker,” Scharf said. “He is a strong voice who brings perspectives from the public sector that we in business do not generally have but are critical for us as we make decisions. The addition of Bill and this role to our Operating Committee is an important statement that we want different perspectives on our senior-most management committee and that we will think more broadly about our stakeholders as we move forward.”
Ray Fischer joins as head of Cards, Retail and Merchant Services
On Nov. 25, 2019, Ray Fischer joined to lead Cards, Retail and Merchant Services to lead development of innovative products and services enhancing customer and team member experiences.
“I have worked with Ray for many years, both at JPMorgan Chase and when I was at Visa,” Scharf said. “Ray has worked in financial services for nearly 40 years and has deep expertise in payments, cards, merchant services, and consumer finance.”
Fischer spent 14 years at JPMorgan Chase as chief financial officer of Card, Merchant Services & Auto Finance. While there, he was instrumental in negotiating and executing the Chase Merchant Services partnership with Visa that created a closed-loop payments platform for Chase cardholders and merchants. Following that role, he was vice chairman and administrative officer of the Kessler Group. Most recently, Fischer was a senior advisor to the Aries Financial Group, responsible for consulting with Fortune 1000 companies in the banking, payments, and public utilities industries on mergers and acquisitions, business development, operations, and marketing strategy and execution.
Christel Kennedy joins as head of Business Continuity and Resiliency
On Dec. 2, 2019, Christel Kennedy joined as head of Business Continuity and Resiliency, reporting to Saul Van Beurden, head of Technology. In this role, she helps define, govern, and execute the company’s Business Continuity Program and continue to integrate and strengthen the bank’s Corporate Security infrastructure.
Since 2015, Kennedy has held several roles at Santander Bank and most recently was the company’s chief operating officer and director of Change Management. During this time, she was responsible for bank operations supporting all consumer and commercial products and services while also overseeing the company’s incident management and business continuity processes.
Prior to joining Santander Bank, Kennedy held numerous technology, risk management, and business operations leadership roles at Citizens Financial Group, Inc., and JPMorgan Chase & Co.
“She has hands-on operational experience leading disaster recovery and business continuity planning and a track record of executing and driving transformational change,” Van Beurden said. “She will be a tremendous addition to Wells Fargo.”
Scott Powell joins as Chief Operating Officer
On Dec. 9, 2019, Scott Powell joined Wells Fargo as Chief Operating Officer, a new position created by Scharf to oversee regulatory execution and relations, enterprise shared services, and a range of operational functions across the company and serves on the bank’s Operating Committee.
Powell most recently was CEO of Santander Holdings USA, where he led the company’s financial turnaround, including resolving significant regulatory issues, implementing customer-focused oversight programs, and improving financial and operating controls.
“I have known Scott for many years, and his tremendous experience, proven track record and unquestioned integrity will make him a great addition to our management team,” Scharf said. “He’s the ideal person to take on this new position as we seek to transform Wells Fargo so that high-quality execution, clear accountability and operational excellence become unquestioned components of our culture.”
Muneera Carr joins as Controller
On Jan. 6, Muneera Carr joined as Controller, managing corporate tax, accounting, and reporting, as well as controllership activities such as financial controls and oversight policies and processes for the company’s business groups and enterprise functions.
Prior to joining Wells Fargo, Carr was chief financial officer for Comerica, Inc., which she joined in 2010. Carr has also worked in the Office of the Chief Accountant at the United States Securities and Exchange Commission and for Bank of America, SunTrust, and PricewaterhouseCoopers. She holds a Bachelor of Business Administration from the University of Texas and is a certified public accountant.
“Muneera brings to our Controllers team deep knowledge and expertise that will help drive our continued transformation,” said Chief Financial Officer John Shrewsberry. “She will be a tremendous and valued addition to Wells Fargo.”
Michael Cleary joins as head of Sales Practices Oversight and Management
On Feb. 4, Michael Cleary joined as head of Sales Practices Oversight and Management, reporting to Chief Operations Officer Scott Powell, to ensure Wells Fargo has the right policies and procedures in place to prevent and ensure customers have the necessary support when problems arise.
“In this role, Michael will establish an integrated and consistent approach to sales practice monitoring, analytics, and reporting across the company. He will develop the go-forward framework and roadmap to ensure we have in place the right policies and procedures, controls, escalation points, and remediation protocols to comply with the various regulatory requirements and provide industry-leading sales practice oversight,” Powell said.
Cleary brings deep and relevant experience to this newly created role, Powell said. At Santander US, where he was co-president of Santander Bank and head of Consumer and Business Banking, Cleary’s responsibilities included Retail Banking, Business Banking, Home Lending, Wealth Management, Customer Experience, and Operations. Michael served on the CEO’s Executive Committee, the Sales Practices Committee, and the First and Second-Line Risk Committees, and drove key regulatory initiatives. Among his accomplishments were developing the frameworks, policies and procedures, and governance to comply with regulatory guidance for safety and soundness, consumer protection, information security, regulatory compliance, and new business initiatives.
Prior to joining Santander in 2015, Cleary was group executive vice president and head of U.S. Distribution at Citizens Bank. He has also held numerous executive roles at JPMorgan Chase. Cleary has an undergraduate degree from Princeton University and an MBA from the Amos Tuck School of Business at Dartmouth College.
Mike Weinbach named CEO of Consumer Lending
In May, Mike Weinbach will join as CEO of Consumer Lending, which includes many of the products Wells Fargo’s customers interact with most closely — from home and auto loans to personal lines of credit. He will also serve on the Operating Committee.
“I’m delighted that we’ve been able to attract someone with Mike’s experience, skills and knowledge to Wells Fargo,” said Scharf. “He has a broad range of experiences in the consumer space and will be a great addition to our management team.”
Weinbach joins Wells Fargo after 16 years at JPMorgan Chase where he was most recently CEO of Chase Home Lending. Previously at Chase he held leadership roles across Consumer Banking, Business Banking, Home Lending, and Auto Finance in sales, finance, branch management, and operations. Before joining Chase, he founded a business focused on workplace motivation and held positions at Citigroup. He is a graduate of the Wharton School at the University of Pennsylvania and earned his MBA at Harvard Business School.
“I am excited to join Wells Fargo and appreciate the opportunity to work with this remarkable franchise that serves over 70 million customers,” said Weinbach. “I am passionate about providing outstanding customer experiences and helping customers live better lives. I am eager to work with the Wells Fargo team to do just that.”
Andrew Heller joins as Strategy and Operations Planning leader
On Feb. 11, Andrew Heller joined as Strategy and Operations Planning leader. Heller joins from Santander US, where he was chief of staff to the CEO and head of transformation.
“Strategy and Operations Planning, led by Andrew Heller, will work with the COO leadership team to help drive our transformation agenda and provide project leadership, planning, and support across the COO team’s priorities,” said Chief Operating Officer Scott Powell.
Ellen Patterson joins as General Counsel
Effective March 23, Ellen Patterson joins at General Counsel, overseeing all legal affairs as a member of the Operating Committee and reporting to the CEO.
“Ellen is a seasoned lawyer with extensive experience in the financial services industry, where she has had responsibilities for managing and advising on global legal and regulatory compliance risks,” Scharf said. “She will play a critical leadership role on our Operating Committee as we continue to work on our company’s top priority of meeting regulatory expectations.”
Patterson joins Wells Fargo after more than seven years at TD Bank Group, where she most recently served as group head and general counsel responsible for leading the bank’s global Legal, Compliance, Anti-Money Laundering, Corporate Secretary, Global Security & Investigations, and Fraud Risk Management teams. Earlier, she served as general counsel for TD Bank’s U.S. banking operations. For the past two years, she has chaired TD Bank’s global Women in Leadership program, supporting programs and practices to advance the careers of a diverse group of female employees.
Patterson is a graduate of Columbia Law School and received her undergraduate degree from Harvard University. She has been recognized as one of 25 “Women to Watch” by American Banker in each of the past four years.