After insisting that it wanted an outsider to step into the role of CEO, it was reported last week that the Wells Fargo board was considering keeping interim CEO Allen Parker in the job permanently. It turns out there may be a reason for that – nobody else seems to want the job.
Wells Fargo has been searching for a permanent CEO since March, when then-CEO Tim Sloan abruptly stepped down amid mounting criticism of his handling of the bank’s numerous scandals. So far, however, the search doesn’t seem to have borne much fruit.
Wells Fargo has approached several top candidates, including PNC Financial Services Group CEO William Demchak and U.S. Bancorp CEO Richard Davis, according to a Wall Street Journal report. Both execs refused the job. Wells Fargo has also sounded JPMorgan Chase consumer banking chief Gordon Smith for the role, but sources told WSJ that Smith was reluctant to take the job and would probably stay at JPMorgan.
It's perhaps unsurprising that many top executives don’t want to touch the job. While running Wells Fargo would be one of the biggest jobs in the finance industry, it wouldn’t necessarily be a pleasant one. The new CEO would be taking over a business battered by scandal after scandal – one that is currently under intense regulatory scrutiny and is currently operating under a growth cap imposed last year by the Federal Reserve.
It is unusual for a bank the size of Wells Fargo to go months without a permanent CEO, according to The Wall Street Journal; typically, there’s a clear succession plan in place. Other industry figures have taken notice, questioning the way the bank is running its CEO search.
“It’s not responsible for a company – just my own view – to have a CEO leave with no plan in place,” JPMorgan CEO Jamie Dimon said at an investor conference last month. “I don’t personally understand that.”
But Sloan’s abrupt departure and other factors have thrown a wrench into whatever succession plans Wells Fargo may have had. There is considerable political pressure for the bank to hire an outsider – and anyone it picks will have to be vetted by the Office of the Comptroller of the Currency, which has said it would exercise a little-used power to approve the bank’s CEO pick.