Former Wells Fargo CEO, Timothy J. Sloan, filed a lawsuit against the bank on Friday claiming he is owed at least $34 million in back pay. Sloan, who stepped down in 2019 amid scandal, argues that Wells Fargo made him a scapegoat for issues that existed before his leadership. His lawyers argue that his resignation was an act of loyalty to the bank. Wells Fargo, however, stands by its decision to withhold his pay, citing performance as the basis for compensation decisions.
Sloan took over as CEO in 2016 with a mandate to clean up the bank after it was revealed that employees had opened millions of fake accounts in customer names to meet aggressive targets. The bank paid over $1.5 billion in penalties and faced lawsuits from customers and shareholders. The Federal Reserve also imposed growth restrictions on the bank until cultural changes were made.
Sloan’s resignation came after his Capitol Hill testimony, in which he struggled to assure lawmakers that the bank would not harm customers again. He did not negotiate a severance agreement at the time, trusting the bank in a spirit of mutual trust. The lawsuit marks a surprising turn in the ongoing efforts by Wells Fargo to distance itself from Sloan’s tenure and rebuild its reputation with customers and regulators.
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