After six months of trying to find a suitable replacement for its former CEO Tim Sloan, Wells Fargo has finally named its new leader. The bank announced on Friday that it has chosen Bank of New York Mellon CEO Charles Scharf as its new chief executive.
The former senior executive as JPMorgan Chase and the former CEO of Visa will officially be taking the reins of Wells Fargo on October 21. The banking veteran will have a lot on his plate when he takes over, with appeasing regulators being his first priority task.
For the past three years, the bank has been dealing with a series of scandals, which have severely tarnished its reputation. Sloan stepped down as the company's CEO in March after failing to recover the bank's reputation amid the scandals.
Investors embraced the new hire as evident in the increase in the bank's stock price. Following the news, Wells Fargo saw it's stock prices jump by as much as 4 percent.
Wells Fargo Chair Betsy Duke mentioned in a statement announcing the hiring that Charles was the perfect candidate given his strong track record and initiative. The executive further explained that Charles is a veteran when it comes to producing results and strengthening operational compliance, which is a talent the company desperately needs to be given its situation.
Scharf will reportedly be based in New York where he has family, but the executive is expected to travel extensively to and from Wells Fargo's headquarters in San Francisco. During a press conference, Scharf stated that he simply could not pass up the opportunity to lead such an iconic institution in the US financial system.
One of the Scharf's first order of business will be to convince the Federal Reserve to lift its sanctions on the bank, which was originally imposed in 2018 for alleged widespread consumer abuses. One of the sanctions that were imposed was an asset cap that limited the bank from further growth. Analysts predict that Scharf would have to use all of the talents at his disposal to appease regulators.
Even Wells Fargo's decision to hire Scharf was subject to regulatory scrutiny. The Office of the Comptroller of the Currency launched its own review of the proposed hire prior to its approval.
Apart from Scharf's experience, the banking veteran also has close ties with other bank executives, include close ties with JPMorgan CEO Jamie Dimon. Analysts have stated that picking Scharf was a safe decision by Wells Fargo, at least from a political standpoint.
