Famed investor and Wells Fargo’s largest shareholder Warren Buffett urged the bank to look beyond Wall Street to find a new chief executive for the company.
In an interview with The Financial Times Buffett said Wells Fargo will need to look outside of Wall Street if it wants to repair its reputation, which has been hit by scandals. “They just have to come from someplace [outside Wells] and they shouldn’t come from Wall Street,” Buffett in an interview with The Financial Times. “They probably shouldn’t come from JPMorgan or Goldman Sachs.” Buffett has owned shares of Wells Fargo as far back as 1989. He wants Wells Fargo to be led by someone outside of Wall Street. While the famed investor said there are a lot of Wall Street leaders that would do a good job at the helm of Wells Fargo, if a Wall Street executive is named it will anger lawmakers in both the House of Representative and Senate. The report noted that a lot of names on analysts’ lists come from Goldman Sachs and JPMorgan Chase. Bill Demchak, a former JPMorgan executive who heads up PNC Financial, is also on the list of potential people to take on the role.
Buffett currently owns close to 10 percent of Wells Fargo stock, which The Financial Times said is valued at around $22 billion. Buffett thinks the bank’s position is strong even with the hit to its reputation. “If you look at Wells, through this whole thing they’re uncovering a whole lot of problems, but they aren’t losing any customers to speak of,” Buffett said in the interview. “They are losing the ones in the public sector . . . but one household out of every three does business with Wells one way or another.”
The comments come a month after Wells Fargo Chief Executive Tim Sloan resigned, faced with pressure from regulators and lawmakers. Allen Parker, the general counsel at Wells Fargo, is taking on the role on an interim basis. Wells Fargo has been having a tough time recovering from its fake account scandal in which employees, under pressure to meet sales targets, opened fake accounts for customers without them knowing.