Wells Fargo & Co. named Charles Scharf chief executive officer, marking a new era in the bank’s efforts to turn itself around after a series of scandals claimed two previous CEOs in the past three years.
Scharf, the CEO of Bank of New York Mellon Corp., will replace interim chief Allen Parker on Oct. 21, capping a wide-ranging hunt for an outsider able to fix relations with the government and reinvigorate the San Francisco-based lender.
“With more than 24 years in leadership roles in the banking and payments industries, including as CEO of Visa Inc. and Bank of New York Mellon, Charlie has demonstrated a strong track record,” Wells Fargo Chair Betsy Duke said Friday in a statement announcing the move.
The appointment ends a six-month search after former chief Tim Sloan stepped down in March, bowing to political and regulatory scrutiny. The process drew fire from some investors who said the board was taking too long and failing to update the market on its progress. Parker, Wells Fargo’s general counsel, has been running the bank in the interim.
“Given Scharf’s industry experience and familiarity with the challenges, we have more confidence the company will be able to move quickly and remediate lingering regulatory issues, improve expense leverage and reignite growth,” David George, an analyst at Robert W. Baird & Co., said in a note.
Scharf, 54, will be charged with mending ties in Washington, where Wells Fargo’s problems are hardly over: The bank still faces several investigations and outstanding consent orders, including a growth restriction imposed by the Federal Reserve.
Because of the intense regulatory scrutiny, Scharf’s appointment was subject to approval from the Office of the Comptroller of the Currency, which said in a statement Friday it had “no supervisory objection.”
Scharf has had several roles leading businesses that directly deal with consumers, Kevin Barker, an analyst at Piper Jaffray & Co., said, noting that the new CEO will be the first outsider to lead the bank in several decades.
Wells Fargo’s business model is still “extraordinary,” Scharf said on a conference call Friday. Resolving regulatory issues will be his top priority, he said, adding that he’s not yet set a timeline for strategy or targets.
Scharf joined Visa as its CEO in November of 2012 after a decade at JPMorgan, where he led retail banking before taking over an investment arm. He oversaw Visa during a time when the industry’s profits snowballed as consumers around the world increasingly turned to electronic payments. Then he moved to Bank of New York, where he struggled to turn the trust and custody bank around.
Scharf left Visa in 2016 to be closer to his family on the East Coast. He’ll run Wells Fargo from New York, according to the statement.
One incentive that helped persuade Scharf to make the jump: a 40% pay hike. His target compensation was set at $23 million, compared with $16.5 million in his final full year at Bank of New York.
