NEW YORK, N.Y. – Wells Fargo said it will split the jobs of chairman and CEO and will make other major changes to the composition of its board of directors in an effort to make the bank more accountable following a scandal over its sales practices.
The bank said Thursday it was amending its corporate bylaws to require that separate people fill the job of chairman and the job of CEO. The chairman and vice chairman will have to be independent directors, the bank said.
Wells’ previous chief executive, John Stumpf, held both the CEO and chairman jobs before he abruptly retired in mid-October. Stumpf was replaced by Tim Sloan, and Stephen Sanger became Wells’ independent chairman.
“The board previously acted to elect an independent chairman to lead the board and we believe formalizing this structure is the right decision at this time for the company and its investors, customers, and team members,” Sanger said in a prepared statement.
Sanger further said that separating the chairman and CEO roles, plus the independent directors, “will enhance the board’s independence and its oversight of the company’s management.”
In September, the San Francisco-based bank was fined $185 million in an agreement with regulators who said bank employees may have opened up to 2 million customer accounts fraudulently in order to meet ambitious sales goals.
Federal and local authorities alleged that Wells Fargo employees opened bank and credit card accounts, moved money between those accounts and even created fake email addresses to sign customers up for online banking — all without customer authorization. Debit cards were issued and activated, as well as PINs created, without customers knowing.
Ken Sweet covers banks and consumer financial issues for The Associated Press. Follow him on Twitter at @kensweet.