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John Stumpf

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John Stumpf
Stumpf in 2009
Born (1953-09-15) September 15, 1953 (age 71)[1]
Pierz, Minnesota, U.S.
EducationSt. Cloud State University (BS)
University of Minnesota (MBA)
Known forInvolvement in Wells Fargo account fraud scandal
Board member ofThe Clearing House, Financial Services Roundtable, Chevron

John Gerard Stumpf (born September 15, 1953)[2] is an American business executive and retail banker. He was the chairman and chief executive officer of Wells Fargo, one of the Big Four banks of the United States. He was named CEO in June 2007, elected to the board of directors in June 2006, and named president in August 2005. He became chairman in January 2010. Stumpf resigned as chairman and CEO of Wells Fargo on October 12, 2016, after a scandal involving customer accounts and subsequent pressure from the public and lawmakers. He was succeeded by Timothy J. Sloan.

Early life

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A native of Pierz, Minnesota, Stumpf grew up as one of 11 children on a dairy and poultry farm.[3] His father was a dairy farmer. His father is of German descent and his mother of Polish descent. He was raised Catholic.[4] Stumpf shared a bedroom with his brothers until he was married. He graduated in the bottom half of his high school class. His first job was as a breadmaker in a Pierz bakery. After a year, Stumpf enrolled at St. Cloud State University on a provisional basis. He eventually obtained a job as a repossession agent at First Bank in St. Paul, Minnesota.[5]

Stumpf earned his bachelor's degree in finance from St. Cloud State University and an MBA with an emphasis in finance from the University of Minnesota Carlson School of Management.[6]

Career

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In 1982, Stumpf joined Northwestern National Bank, the flagship bank of Norwest Corporation. He worked in the loan administration department and then became senior vice president and chief credit officer for Norwest Bank, N.A., Minneapolis. He held a number of management positions at Norwest Bank Minneapolis and Norwest Bank Minnesota before assuming responsibility for Norwest Bank Arizona in 1989. He was named regional president for Norwest Banks in Colorado/Arizona in 1991. From 1994 to 1998 he was regional president for Norwest Bank Texas. During his four years in that position, he led Norwest's acquisition of 30 Texas banks with total assets of more than $13 billion.[7]

Norwest merged with Wells Fargo in 1998. Norwest was the nominal survivor, but the merged bank retained the Wells Fargo name. Stumpf became head of Wells Fargo's Southwestern Banking Group (Arizona, New Mexico and Texas). Two years later he became head of the new Western Banking Group (Arizona, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington and Wyoming). In 2000, he led the integration of Wells Fargo's acquisition of the $23 billion First Security Corporation, based in Salt Lake City. In May 2002, he was named Group EVP of Community Banking. In December 2008, he led one of the largest mergers in history with the purchase of Wachovia.[7]

Stumpf became CEO of Wells Fargo in June 2007 and chairman in January 2010.[8] In 2012, Stumpf's total compensation was $22.87 million with a base salary of $2.8 million, $3,300,000 in cash bonuses, $12.5 million in stock granted, and $15,000 in other compensation.[9][10]

Stumpf served as director of National Association since June 27, 2006, and a Member of Litigation Committee at Visa Inc.[11] After he retired, he and his wife bought a home near Mummy Mountain in Paradise Valley, Arizona.[12]

Role in fake accounts scandal

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Main article: Wells Fargo account fraud scandal

In September 2016, Wells Fargo was fined $100 million by the Consumer Financial Protection Bureau, $50 million by the Office of the Comptroller of the Currency and $35 million by the city and county of Los Angeles, for opening two million checking and credit-card bank accounts without its customers' consent.[13][14][15] Stumpf was grilled by angry lawmakers on Capitol Hill in hearings before the U.S. Senate Banking Committee and the House Financial Services Committee.[16] He was accused of selling customers multiple accounts fraudulently when they did not need them, and using those results on quarterly reports for larger returns on Wells Fargo stock holdings.[17] On September 27, The Wall Street Journal reported that the board was considering cutting back on compensation for Stumpf and former retail banking head Carrie Tolstedt.[18][19] Two days later, Stumpf again appeared before Congress, declaring his intent to forfeit at least $41 million in pay. He also testified that Wells Fargo would quickly drop its sales incentive program.[20] On January 23, 2020, Stumpf agreed to a lifetime ban from the banking industry and a $17.5 million fine for his role in the fake account scandal. In November 2020, he settled further investigations by the SEC and agreed to pay an additional civil penalty of $2.5 million.[21][22] Upon leaving Wells Fargo, Stumpf's total compensation was more than $130 million.[23] High-profile critics, including Elizabeth Warren, have called for criminal charges to be filed against him.[24] As of June 2021, none have been filed.[25]

Criticism from the Federal Reserve

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In February 2018, Janet Yellen, on her last day as Chair of the Board of Governors of the Federal Reserve System, approved a strongly worded critical letter to Stumpf to emphasize his failures as co-chair of Wells Fargo's board of directors. The letter, signed by Michael Gibson, Director of the Division of Supervision and Regulation, cited Stumpf's complicity in ignoring the bank's poor risk management programs, and failure to initiate any serious investigation into its sales practices.[26]

References

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  1. ^ U.S. Public Records Index, Vols. 1 & 2 (Provo, UT: Ancestry.com Operations, Inc.), 2010.
  2. ^ "Mr John Gerard Stumpf - Director at Wells Fargo Bank, National Association". DueDil. 2006-03-08. Retrieved 2015-08-01.
  3. ^ "Wells Fargo is now the nation's biggest bank by market value". Los Angeles Times. 2012-03-18. Retrieved 2015-08-01.
  4. ^ "Wells Fargo CEO John Stumpf on Leadership, Corporate Citizenship, Sustainable Business & Accountability". DiversityInc. 2011-11-15. Retrieved 2015-08-01.
  5. ^ "Wells Fargo: The Bank That Works". Forbes. 2012-01-25. Retrieved 2015-08-01.
  6. ^ Wells Fargo Executive Officers Archived 2012-12-13 at the Wayback Machine, wellsfargo.com
  7. ^ a b "John G. Stumpf Biography – Chairman, President, and CEO – Wells Fargo". Wellsfargo.com. Archived from the original on 2012-12-13. Retrieved 2015-08-01.
  8. ^ "Wells Fargo CEO John Stumpf Resigns Amid Scandal". NPR.org.
  9. ^ 2011 CEO Compensation for John G. Stumpf Archived 2011-05-15 at the Wayback Machine, Equilar
  10. ^ John Stumpf, Forbes
  11. ^ "Executive profile: John Stumpf". Businessweek. Archived from the original on December 16, 2014. Retrieved 1 March 2013.
  12. ^ Reagor, Catherine (September 24, 2018). "Former Wells Fargo CEO pays $3.775M cash for Paradise Valley home". The Republic.
  13. ^ "Consumer Financial Protection Bureau Fines Wells Fargo $100 Million for Widespread Illegal Practice of Secretly Opening Unauthorized Accounts". Consumer Financial Protection Bureau. September 8, 2016. Retrieved September 20, 2016.
  14. ^ "Wells Fargo boss urged to resign over accounts scandal". BBC News. September 20, 2016. Retrieved September 20, 2016.
  15. ^ Bryan, Bob (September 20, 2016). "Wells Fargo's CEO just got grilled by the Senate". Business Insider. Retrieved September 20, 2016.
  16. ^ Cowley, Stacy (29 September 2016). "Wells Fargo's Reaction to Scandal Fails to Satisfy Angry Lawmakers". The New York Times. Retrieved 30 September 2016.
  17. ^ "Senator Elizabeth Warren Grills Wells Fargo CEO John Stumpf On WFC Cross-Selling CNBC". youtube.com. The New York Times. Archived from the original on 2021-12-21. Retrieved 20 September 2016.
  18. ^ Glazer, Emily (2016-09-27). "Wells Fargo Board Actively Considering Executive Clawbacks". Wall Street Journal. ISSN 0099-9660. Retrieved 2016-09-27.
  19. ^ "Wells Fargo may claw back some of CEO John Stumpf's compensation". Business Insider. Retrieved 2016-09-27.
  20. ^ Cowley, Stacy (2016-09-29). "Wells Fargo's Reaction to Scandal Fails to Satisfy Angry Lawmakers". The New York Times. ISSN 0362-4331. Retrieved 2016-09-30.
  21. ^ Banned: Former Wells Fargo chief executive barred from banking industry Washington Post, Jan. 23, 2020
  22. ^ Egan, Matt (13 November 2020). "SEC charges former Wells Fargo executives over fake-accounts scandal". CNN. Retrieved 2021-04-09.
  23. ^ Egan, Matt (2016-10-13). "Wells Fargo CEO walks with $130 million". CNNMoney. Retrieved 2021-04-09.
  24. ^ "Former Wells Fargo CEO's financial future is secure despite millions in penalties". Los Angeles Times. 2020-01-24. Retrieved 2021-04-09.
  25. ^ Kelly, Jack. "Former Wells Fargo Executives Could Face Serious Criminal Charges". Forbes. Retrieved 2021-04-09.
  26. ^ Gibbon, Michael S. "Accountability as Chair of Wells Fargo & Company Board of Directors" (PDF). Letter to John Stumpf. Board of Governors of the Federal Reserve System. Retrieved 2018-09-28.
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