Tim Sloan, a former Wells Fargo CEO, is suing the bank for more than $34 million for allegedly withholding pay after he retired in 2019, according to a lawsuit filed last Friday in California state court.
The San Francisco-based institution, which has its largest employment hub in Charlotte, North Carolina, saw Sloan retire following a major scandal over fake customer accounts set up by employees to reach sales goals. Sloan said Wells Fargo promised him multiple stock awards and bonuses, according to the complaint.
He stated that the scandals started before his time as CEO and that he tried to fix them before he left the company. Sloan said at the time that Wells Fargo would benefit from a new CEO with fresh perspectives to move the business forward.
Wells Fargo promoted Sloan to CEO in 2016 to replace John Stumpf, who had resigned in the wake of revelations that employees opened millions of accounts without permission from customers.
Sloan’s retirement in 2019 came just a little over two weeks after being scolded during congressional hearings for 3.5 million bank and credit card accounts being opened without permission from customers.
More details in the Wells Fargo lawsuit
In his lawsuit, Sloan stated he served Wells Fargo for more than three decades and rose to the occasion. He claimed an equity grant was unlawfully canceled in the face of intense political pressure.
“Wells Fargo canceled the grant and used Mr. Sloan as a scapegoat even though he was not responsible for the sales practices that prompted the congressional review,” Sloan claimed in his lawsuit, “and despite the energy and resources he committed to meeting regulatory demands and righting the ship.”
Sloan also is seeking damages from unspecified emotional distress, among other claims for damages.
When asked about the lawsuit, Wells Fargo defended itself, stating, “Compensation decisions are based on performance, and we stand behind our decisions in this matter.”
Fallout from the Wells Fargo scandal
Federal regulators filed charges against former Wells Fargo executives for the reported misconduct.
Stumpf was banned from the banking industry and fined $17.5 million by the Office of the Comptroller of the Currency. Carrie Tolstedt, former head of Wells Fargo’s consumer bank, also faced a $25 million fine and an industry ban. In September, she was sentenced by a federal judge to three years’ probation, including six months of home confinement, for her role in misleading investors.
Employees said they had unreasonable sales goals, regulators said. One example in the 2013 OCC report was an employee writing to CEO’s office and saying, “I had less stress in the 1991 Gulf War than working for Wells Fargo.”
Wells Fargo serves 69 million customers in 28 countries and operates in more than 5,500 locations. The financial services company employs over 247,000 people, with about 27,000 jobs in Charlotte.
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