Former Wells Fargo CEO Tim Sloan has filed a lawsuit against the company, seeking over $34 million in unpaid compensation.
Sloan alleged that Wells Fargo unlawfully withheld his deferred pay and bonus after he stepped down as CEO in 2019, Bloomberg reported Friday (Dec. 1). In addition to the financial claims, Sloan is also seeking damages for emotional distress.
During Sloan’s tenure as CEO from October 2016 to March 2019, Wells Fargo faced multiple scandals and regulatory penalties, according to the report. The bank was hit with a Federal Reserve-imposed growth cap, which is still unresolved.
Sloan argued in his lawsuit that the problems at the bank predated his leadership and that he worked diligently to address them, the report said. He said that the board of directors did not blame him for the issues until they faced political and media criticism following his departure.
In the suit, Sloan asserted that Wells Fargo is depriving him of the compensation he earned throughout his career without justifiable cause, per the report.
When Sloan left Wells Fargo, the company described it as his decision and a reflection of his commitment to the company. A spokesperson for Wells Fargo told Bloomberg that compensation decisions are based on performance and that the bank stands by its decisions in this matter.
Sloan took over as CEO of Wells Fargo in the aftermath of a scandal involving fake customer accounts in 2016, according to the report. He implemented various reforms to address the issues, but faced criticism for being an insider and not the right person to fix the bank. Ultimately, he stepped down, citing the distraction caused by the focus on him.
Since Sloan’s departure, regulators have imposed penalties on former Wells Fargo executives, but not on Sloan, the report said.
Wells Fargo canceled a $15 million stock award it had given him, which Sloan claimed was done unlawfully and as a public show, per the report. The company later canceled other equity awards that had vested and were due to be paid out.
Sloan alleged that the bank used him as a scapegoat for the sales-practices abuses that prompted a congressional review, despite his efforts to meet regulatory demands and address the issues, the report said.