The former CEO of Wells Fargo, Tim Sloan, filed a lawsuit against this financial institution demanding compensation, the amount of which is more than $34 million.
Mr. Sloan stated that the mentioned bank, acting within the framework of illegal practices, withheld his deferred salary and bonus. The former CEO of the financial institution says that these violations were committed after he left the relevant post in 2019. Tim Sloan also demands compensation for the damage that was caused to his psycho-emotional state against the background of the bank’s violation of the right to receive money. The relevant information was reported by the media at the end of last week.
Tim Sloan served as CEO of Wells Fargo from October 2016 to March 2019. During this period, the financial institution faced problems, including scandals and fines from regulators. The lender also found itself in a complicated situation, affecting its viability as a functional unit in the banking sector, after the Federal Reserve applied a measure of influence in the form of growth restrictions to Wells Fargo.
In his lawsuit, Tim Sloan claims that the problems faced by the financial institution arose before he took over the bank. Separately, the former CEO of Wells Fargo notes that he has made efforts to eliminate negative factors that worsen the quality of the lender’s activities, including in terms of economic indicators. Mr. Sloan also stated in the lawsuit that the bank’s board of directors did not complain about him concerning the difficult situation in which the financial institution found itself.
The former CEO of Wells Fargo claims that accusations of mistakes and provoking problems against him were recorded after criticism of the lender from the media and politicians appeared. The lawsuit notes that this happened after Tim Sloan left the post of head of the bank.
The former CEO of the financial institution insists that the decision to deprive him of compensation was made without a valid reason. Mr. Sloan also says that he earned the corresponding payments throughout his career.
In 2019, Wells Fargo stated that Tim Sloan’s departure from the position of CEO of the financial institution was his decision and reflected the commitment of the organization. In a comment to the media, a representative of the lender said that the decision on the payment of compensation to the former head of the bank is based on the results of its activities. This statement can probably be interpreted as a statement that Mr. Sloan, as CEO of a financial institution, in the opinion of Wells Fargo, did not demonstrate a level of efficiency sufficient to receive money within the framework of the specified work reward article. A representative of the lender also stated that the bank adheres to its decision. This means that Wells Fargo continues to consider the denial of compensation to be fair, despite Tim Sloan’s objections.
In 2016, the bank found itself at the center of a scandal due to fake customer accounts. The media note that after that Tim Sloan became the CEO of a financial institution. As head of the bank, he began to implement reforms aimed at solving the problems faced by the lender. However, Mr. Sloan has faced criticism for his efforts. In this case, the claims related to the fact that he was an insider and regarding his concept of improving the situation, which, according to some who disagree with the mentioned reforms, does not contribute to achieving the goal.
Tim Sloan in 2019 explained the decision to retire as a distraction, which was the increased level of attention to him. After that, regulators imposed fines on the former heads of the bank. These measures of influence did not extend to Mr. Sloan.
Wells Fargo has canceled a $15 million bonus awarded to a former CEO who retired in 2019. Tim Sloan is convinced that this decision is illegal. He assesses the bank’s actions in the context of the cancellation of the award as a public demonstration. Also, the lender decided not to provide other awarded payments in the sphere of equity.
Mr. Sloan claims that the bank decided to make him a scapegoat for violations in sales practices that provoked attention from Congress, despite his attempts to comply with regulatory requirements and solve problems.
As we have reported earlier, Wells Fargo Reportedly Grapples With Obligations to Enhance Monitoring of Financial Crime.