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IMAX CEO: Box office sales in Asia bode well for US theaters Economist: Work from home will be the future for a 'lucky minority' markets now future of work from home Indeed Chief Economist Jed Kolko_00005106.png This photograph taken on April 26, 2021 in Paris shows a physical imitation of the Bitcoin crypto currency. In this photo provided by the New York Stock Exchange, traders work around stock monitoring systems on the trading floor, Wednesday, May 12, 2021, in New York. Inflation worries rattled Wall Street on Wednesday, pulling the Dow Jones Industrial Average more than 680 points lower and placing the major stock indexes on track for their worst week in more than six months. (Courtney Crow/New York Stock Exchange via AP) A visual representation of the digital Cryptocurrency, Bitcoin on December 07, 2017 in London, England. Here's why used car prices are so high These companies are trying to win back your trust (CNN Business) — Wells Fargo is finally doing what it should have done long ago: Hire an outsider CEO who isn’t stained by the bank’s toxic culture. The odds were always stacked against CEO Tim Sloan, a three-decade veteran of Wells Fargo (WFC) who stepped down suddenly last week. Sloan, a plainspoken and affable executive, was never great casting as a change agent. He was simply too tied to the sins of the bank’s not-so-distant past. “As good as a guy as he is, he is still associated with the old Wells Fargo,” said Andy Gilman, president and CEO of CommCore Consulting. “And just like baseball, you can’t fire the whole team. So, you fire the manager.” But the challenge may just be getting started for Wells Fargo. The 167-year-old bank, which said it wants to hire an outsider as its next CEO, must now convince a talented stranger to take a difficult job. And the new CEO must move swiftly to convince employees, angry politicians and — most importantly — regulators that Wells Fargo’s rotten culture is truly gone. RBC analyst Gerard Cassidy warned that Sloan’s successor faces “Herculean tasks” in restoring Wells Fargo to greatness. ’I was becoming a distraction’ The management shakeup comes just two weeks after Sloan was once again slammed by lawmakers at a hearing in Congress. “There’s just been too much focus on me and it’s impacting our ability to move forward,” Sloan told analysts during a conference call after the announcement last Thursday. “I could not keep myself in a position where I was becoming a distraction.” Lawmakers signaled that they aren’t satisfied that Sloan’s departure will solve Wells Fargo’s cultural problems. “It’s still broken,” Senator Sherrod Brown, the ranking member of the Senate Banking Committee, told CNN Business. “It’s not going to get fixed by only changing the guy at the top.” The decision to hire an outsider is a smart move, albeit one that in retrospect should have been done in fall 2016, when the scandal erupted. The bank shocked the nation by claiming rogue employees — 5,300 of them — opened millions of fake bank and credit card accounts. “Yes, you have rogue employees, but there is a culture set from the top,” said Gilman. It still faces gale force political and regulatory headwinds.” Isaac Boltansky, director of policy research at Compass Point Research & Trading. Wells Fargo elevated Sloan despite the fact that as chief operating officer he oversaw the community banking division at the heart of the fake-accounts scandal. Sloan even championed Wells Fargo’s notorious cross-selling metrics to Wall Street. As CEO, Sloan vowed to clean up the bank’s culture — and he took meaningful steps. He pushed out managers and senior executives and eliminated the unrealistic sales goals that drove employees to open fake accounts. Sloan urged workers to speak up if they saw something shady and promised to shore up the bank’s confidential ethics hotline. R. Scott Siefers, analyst at Sandler O’Neill, credited Sloan with doing “quite a bit of heavy lifting” but said in the end many parties “didn’t want to move forward with an insider at the helm.” Chip Somodevilla/Getty Images Wells Fargo CEO Tim Sloan became a lightning rod on Capitol Hill, hurting the bank's ability to move forward Drip, drip, drip of scandal While Sloan tried to fix Wells Fargo, new problems continued to emerge. Wells Fargo admitted to charging thousands of borrowers for auto insurance they didn’t need and hundreds of homebuyers for mortgage fees they didn’t deserve.<doc-sep>Wells Fargo is America's largest bank and it also leads the nation's banks for scandals, having stolen from rich people, poor people, veterans, active-service military personnel, homeowners, small businesses, etc, as well as 2,000,000 ordinary customers who had fraudulent accounts opened in their names in order to bleed them of transaction fees, sometimes at the expense of their good credit and even their financial solvency. After handing John Stumpf (the CEO who presided over the first wave of scandals) a massive, multi-million-dollar payment to punish him for his wrongdoing, the company elevated CFO Timothy J Sloan to the CEO's chair, in the hopes that the public would believe that the former CFO could be sold as a change agent if he was enough of a bland nonentity. Unfortunately for the board, Sloan bumbled through a series of ever-more-grotesque scandals until it became evident that the board's only choice would be to make an example of him by giving him millions of dollars, too. Now he is out and the board is on the hunt for his replacement. On CNN, Matt Egan ruminates on how a criminal enterprise of the scale and notoriety of Wells Fargo can hire a leader that will allow it to continue to commit crimes without getting punished or being hated by the public. In particular, investors are anxious to find a CEO who can convince the Federal Researve to lift the company's sole meaningful punishment for its consistent wrongdoing: a cap on how big it can grow. Egan speculates that a new leader may be recruited from noted industry outsiders Goldman Sachs, whose willingness to break with traditional financial orthodoxy in pursuit of ethical business is the stuff of legend. Several former Goldman Sachs (GS) execs have been floated as potential CEOs. Gary Cohn, former Goldman president and Trump administration economic adviser, has previously denied he's interested in the job. Ditto for former Goldman Sachs president Harvey Schwartz. Wall Street analysts have speculated that Richard Davis, the former CEO of US Bank (USB), could be a good fit for San Francisco-based Wells Fargo. Wells Fargo's CEO is out. Here's how the bank can end its crisis [Matt Egan/CNN<doc-sep>Wanted: New chief executive to clean up radioactive mess. Hazmat suit not provided. Wells Fargo is searching for a new leader after its chief executive, Timothy J. Sloan, abruptly resigned on Thursday, having been hounded by politicians, regulators, customers and employees about the halting efforts to overhaul the scandal-tarred bank. Wells Fargo, the country’s fourth-largest bank, is starting its chief executive search from scratch. The chairwoman, Betsy Duke, said on Thursday that the board would try to recruit an executive from outside, someone without the baggage of being a Wells Fargo veteran. Identifying a qualified candidate — a person with extensive banking and management experience, the credibility to pacify regulators and the skill to shepherd a company with 260,000 restive employees — will be a challenge. Persuading that person to take the job is likely to be even harder. While Wells Fargo’s finances are fundamentally sound, the bank faces a daunting list of problems: litigation, with hundreds of millions of dollars on the line; more than a dozen restrictions imposed by federal regulators; a largely demoralized work force that is chafing under the bank’s leadership; and rigorous scrutiny of the bank’s next leader from high-profile members of Congress.<doc-sep>Wells Fargo WFC 1.57% & Co. Chief Executive Tim Sloan stepped down Thursday, ending a 31-year career at the bank and a 2½-year slog to get it back on solid footing after a fake-account scandal badly damaged its reputation and standing with regulators. C. Allen Parker, Wells Fargo’s general counsel, has been named interim CEO. Mr. Parker joined the bank in 2017 from law firm Cravath, Swaine & Moore LLP to help clean up after the 2016 sales scandal. The nation’s fourth-largest bank said it would search for a new permanent chief executive from outside the company. The change atop Wells Fargo could signal a reset of the bank’s plans to put its problems behind it. Many of Wells Fargo’s top executives, including Mr. Sloan, have spent decades at the bank, and critics have said those long-tenured leaders have hindered the company from adequately fixing deep-rooted issues. Officials at the Office of the Comptroller of the Currency, one of the bank’s primary regulators, were recently debating the rare step of forcing changes to Wells Fargo’s senior management or board, The Wall Street Journal previously reported. Mr. Sloan, 58 years old, informed the board on Tuesday of his decision to retire, according to a regulatory filing. He will receive the pay he has already been promised but won’t get any additional retirement payment, the filing said. C. Allen Parker, who has served as general counsel for Wells Fargo since 2017, is now its interim chief executive. Photo: Wells Fargo/Reuters In recent weeks, Mr. Sloan has faced renewed pressure from regulators and lawmakers to get the bank’s problems under control. Washington’s frustration with Mr. Sloan played a major role in his decision to retire, people familiar with the matter said. “I could not keep myself in a position where I was becoming a distraction.” Mr. Sloan said in a call with investors on Thursday. The move marks a big and rapid reversal for Wells Fargo. In recent months, Mr. Sloan had said he wanted to stay on for at least another several years, and the bank’s board had continued to express support for its embattled chief. At a charity luncheon earlier Thursday, Warren Buffett, whose Berkshire Hathaway Inc. is the bank’s biggest shareholder, said he supported Mr. Sloan “100%.” He added, “I don’t want his job.” Board chairman Elizabeth Duke said the bank hadn’t reached out to any potential candidates. “We have a lot more work to do,” she said of the bank’s overall progress fixing itself. Mr. Sloan said he spent his time as CEO trying to rebuild trust in Wells Fargo. “However, it has become apparent to me that our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives,” he said in a statement. Mr. Parker is one of the few outsiders Wells Fargo has added to its top ranks since the sales scandal erupted. Mr. Sloan approached him about serving as the bank’s top lawyer at the end of 2016, around the same time Mr. Parker wrapped up a stint as Cravath’s presiding partner. Mr. Parker had known Mr. Sloan for several years and had done legal work for the bank. “There’s no doubt in my mind that it will be a highly challenging job,” Mr. Parker said at the time. Until the 2016 scandal, Wells Fargo enjoyed a sterling reputation as a bank that dodged the worst abuses of the financial crisis. But by the time Mr. Sloan took over after the scandal broke, leading to then-CEO John Stumpf’s resignation, the bank’s folksy image was in tatters. He quickly set out to repair it, launching a deep review of every business. Mr. Sloan knew the company well, having worked his way up through its wholesale-banking unit before serving as chief financial officer and, most recently, chief operating officer. Yet problems continued to emerge throughout the bank. Nearly every one of its business lines is under investigation by a government agency, including the Justice Department and the Securities and Exchange Commission. The bank also has struggled to put in place a new risk-management system—the infrastructure designed to catch and prevent problems that could harm customers. In an April 2017 report, Wells Fargo’s board said the bank had made a grave mistake letting business units police themselves. The Federal Reserve took the rare step of capping the bank’s growth in February 2018, citing risk-management deficiencies. A few months later, the Consumer Financial Protection Bureau and the OCC imposed a $1 billion fine on the bank for misconduct in its auto- and mortgage-lending business. The OCC said it found risk-management deficiencies that “constituted reckless, unsafe or unsound practices,” leading to improper charges to hundreds of thousands of consumers. Investors also have been skeptical. Wells Fargo’s shares rose about 8% during Mr. Sloan’s tenure, compared with a nearly 30% increase in the KBW Nasdaq Bank Index. The shares rose in after-hours trading Thursday, following Mr. Sloan’s resignation. Mr. Sloan faced aggressive questioning from lawmakers in both parties when he testified before the House Financial Services Committee on March 12. Photo: J. Scott Applewhite/Associated Press Mr. Sloan never managed to convince regulators and others in Washington that he was the right person to fix the beleaguered bank. “About damn time,” Sen. Elizabeth Warren (D., Mass. ), who is currently running for president, tweeted Thursday following Mr. Sloan’s resignation. “Tim Sloan should have been fired a long time ago.” Earlier this month, Mr. Sloan testified before the House Financial Services Committee and engaged in combative exchanges with Republicans and Democrats alike. Minutes after the hearing ended, the OCC issued a rare statement, saying it was “disappointed with [Wells Fargo’s] performance under our consent orders and its inability to execute effective corporate governance and a successful risk management program.” In a regulatory filing released the next day, Wells Fargo said its board awarded Mr. Sloan a 5% pay increase in 2018 from the prior year. House Financial Services Committee Chairwoman Maxine Waters (D., Calif.) called the pay package “outrageous and wholly inappropriate” and urged the bank to fire Mr. Sloan. —Nicole Friedman contributed to this article.<doc-sep>
Problems at the fourth biggest U.S. bank came to light in 2016 with the news that employees had created millions of fake accounts to meet sales quotas. Since then, more issues tied to sales practices have emerged across the bank's business lines, including mortgage, auto lending and wealth management operations. Last year, the Federal Reserve took the extremely rare step of capping the bank's asset growth after the bank found more problems with customer dealings. Sloan, the three-decade Wells Fargo veteran who was supposed to clean up the mess that had claimed his predecessor, had struggled to satisfy regulators' demands to overhaul the sprawling institution. Tim Sloan, who took over as chief executive of the bank in October 2016, is resigning as CEO immediately, the bank said Thursday in a release. The bank's general counsel, Allen Parker, will take over as interim CEO, and the bank is searching externally for a permanent successor. Still, the news that Sloan was stepping down came suddenly. Earlier this month, the bank said that Sloan had merited a 5 percent raise to $18.4 million for his work in 2018. And when there were news reports that the bank was considering a former Goldman Sachs executive as a potential CEO, the bank issued strong statements that Sloan had the full confidence of its board. Just two weeks ago, a haggard-looking Sloan testified before Congress about his efforts to clean up the various messes he had inherited. Before the four-hour hearings began, CNBC's Ylan Mui asked Sloan how long he expected to remain CEO, and he replied that he, his board and all of his 260,000 employees thought he was doing a great job. But in the end, the pressure was just too great. Sloan informed the board Tuesday that he felt his presence was a hindrance for the company, according to a Thursday call conference call with reporters. The move wasn't the result of the banks first-quarter performance or any "newly discovered issues," he said. Sloan's departure reflects "his belief that a new CEO at this time will best position the company for success," the bank's chair, Betsy Duke said in a statement. Rather than look for a replacement internally, the board said it would find one from outside the company. The bank's critics, including Sen. Elizabeth Warren, have said that Sloan was too associated with the bank to be an effective change agent. Wells Fargo shares jumped 2.6 percent in extended trading Thursday following the announcement. Shares of the bank have struggled amid the fallout from the sales practices scandal and scrutiny from political leaders. Over the last five years, the stock is flat, compared to a near 70 percent jump in J.P. Morgan Chase shares and a 40 percent move higher for the whole S&P financial sector. Sloan's departure follows repeated calls from lawmakers for the CEO to step down. In October, Sen. Warren sent a letter to Federal Reserve Chairman Jerome Powell calling on the Fed to maintain its growth cap on Wells Fargo until the bank replaces Sloan.