Who is Charlie Scharf, the new Wells Fargo CEO hired to rescue the banking giant?
Charlie Scharf knew what he was getting into when he accepted the job of CEO at troubled Wells Fargo, and not just from reading the headlines touting employee misconduct, billions of dollars in legal settlements and two CEOs that were forced out.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WFC | WELLS FARGO & CO. | 58.75 | +1.56 | +2.73% |
| BK | THE BANK OF NEW YORK MELLON CORP. | 55.25 | +0.78 | +1.43% |
The 54-year-old has worked with embattled businesses before, overseeing the integration of Washington Mutual into JPMorgan Chase, which rescued the smaller bank at the height of the 2008 financial crisis. WaMu, as the lender branded itself, had $35 billion or more in losses, at the time Scharf told the alumni magazine of New York University's Stern business school in a 2009 article.
A decade later, after stints in the top jobs at payments-processor Visa and financial services giant Bank of New York Mellon, the opportunity to lead Wells Fargo "was one I could not pass up," Scharf told investors on a Friday morning call.
The third-largest lender in the U.S., with assets of a $1.9 trillion, Wells Fargo's businesses are "extraordinary," Scharf said. "The performance of the company over a long time was excellent. That doesn't mean that the problems that came to light weren't real. They were very real. The company recognizes and is dealing with that."
Scharf, who was retained after a six-month search and takes over Oct. 21, is the bank's third CEO in as many years. His predecessor, Tim Sloan, stepped down in March after failing to assuage concern among regulators and Congress that his long tenure at Wells kept him from suitably overhauling the company after the creation of millions of phony accounts and misconduct allegations involving its mortgage- and auto-lending businesses. Prior to John Stumpf, lost his spot, in part due to pressure from Sen. Elizabeth Warren [D-MA].
The length of the search is typical for a large corporation, said Betsy Duke, the chairman of Wells Fargo's board, who acknowledged the confidentiality required by candidates for such a job can be frustrating to investors. Even when the New York Post reported that Wells was in talks with Harvey Schwartz, the former chief operating officer at the investment bank Goldman Sachs, officials had to remain mum, Duke said.
When she was asked by one stakeholder to grade progress in the search instead, "I said, 'This is a pass-fail exercise,'" Duke recalled. "I think we passed with flying colors."
Scharf, who earned his master's degree in business at NYU-Stern, won his first job at Commercial Credit Corp. after completing his undergraduate degree in the late 1980s. Family connections slipped his resume to Jamie Dimon, who was then running the company with Sandy Weill and now leads JPMorgan Chase.
He was the youngest person hired at the Baltimore-based firm in years and later described it as a somewhat lonely experience, though it afforded him the opportunity to absorb the wisdom of "seasoned colleagues," he told the alumni magazine. Scharf went on to hold a variety of positions at JPMorgan, including CEO of its retail financial services unit, before becoming head of Visa in 2012, a position he held for years.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JPM | JPMORGAN CHASE & CO. | 181.25 | +1.29 | +0.72% |
| V | VISA INC. | 271.36 | -1.26 | -0.46% |
Scharf accepted the role of CEO of Bank of New York Mellon in July 2017, according to the company's website.
CLICK HERE TO READ MORE ON FOX BUSINESS
"I went to Bank of New York because I thought that's where I would be for the rest of my career," Scharf said. "I certainly didn't anticipate this opportunity coming along."
Since meeting with Wells Fargo's board, he said, "my focus has been on learning everything I can about the company as I decided whether this was something I wanted to do and as the board decided whether this was something they wanted me to do."
In the end, said Duke, the board's non-employee members voted unanimously to offer Scharf the job.
Still, his relatively short tenure at Bank of New York "makes us cautious about how long he will stay at Wells Fargo," said Brian Kleinhanzl, an analyst with the brokerage Keefe, Bruyette & Woods. "Scharf's first task will be appeasing regulators."