Wells Fargo CEO Tim Sloan told employees Tuesday that senior executives made a series of mistakes in response to the phony account scandal, including placing too much of the blame on branch employees.
"We failed to acknowledge the role leadership played and, as a result, many felt we blamed our team members," Sloan said. "That one still hurts, and I am committed to rectifying it."
Speaking to staffers in Charlotte, N.C., Sloan apologized for the pain that the scandal has caused and acknowledged that leadership acted too slowly to address problems in its retail unit. He also said that the aggressive product sales goals – which the company ditched earlier this month – served the interests of neither clients nor branch employees.
The comments marked a shift for the company, which initially placed the blame for the phony account scandal on problem employees in its branches.
Sloan emphasized that Wells is taking actions to repair its damaged reputation and internal culture following revelations that employees opened as many as 2 million sham bank and credit card accounts over several years in order to meet sales goals.
The company agreed to pay $190 million in fines and penalties related to the scandal and said it had fired more than 5,000 employees.
QuoteThe comments marked a shift for the company, which initially placed the blame for the phony account scandal on problem employees.
Sloan, who previously served as president and chief operating officer, took the helm after John Stumpf abruptly resigned earlier this month. Stumpf had been on the hot seat since the scandal broke in early September and calls for his resignation intensified after two disastrous appearances on Capitol Hill.
Sloan, too, has faced a wave of criticism for not offering a clear-cut plan for repairing the reputational damage caused by the fake-account fiasco. Many industry observers have also questioned whether Sloan, a 30-year Wells veteran, is the best person to fix the bank's culture.
In his prepared remarks Tuesday, which were shared with American Banker, a sister brand of Bank Investment Consultant, Sloan said the company has taken steps to repair its once-sterling image, including changing the leadership of its retail unit. Mary Mack, previously head of Wells Fargo Advisors, took over the division in July, following the retirement of Carrie Tolstedt.
Both Tolstedt and Stumpf were forced last month to forfeit millions in stock awards, after the company launched internal investigation of its sales practices.
Sloan also said the company plans to introduce a new performance plan for retail bankers next year, which will evaluate employees based on customer service, growth and risk management. The company also plans to hire independent consultants to review sales practices and improve the company culture.
Sloan delivered the speech to an audience of 1,200 employees at the Knight Theater in Charlotte. The presentation was also webcast to thousands of employees across the country.
In his remarks, Sloan reassured employees that he and his leadership team are well aware of both their mistakes in the wake of the scandal – and the challenges they face ahead.
He said the company is working hard to convey the message that Wells Fargo employees "are not the people and company" that have been portrayed in recent news stories.
"We are going to make sure they know that we are not in denial about our reality," Sloan said.
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