Two top bankers in the industry have turned down offers to replace former Wells Fargo CEO Timothy Sloan, who resigned in March, according to a report by The Wall Street Journal.
PNC Financial Services Group CEO William Demchak and former U.S. Bancorp Chief Richard Davis have both passed on the position. JPMorgan Chase Chief Operating Officer Gordon Smith is reportedly still in the running, although it seems unlikely that he will take the job, and he has told associates he will most likely stay where he is.
Wells Fargo has struggled in its search to fill the position, and whoever steps in will have to deal with numerous issues. The bank has problems in Washington following fake account scandals, and the new CEO will also have to bring life back to important businesses, as well as try to repair the bank’s image.
Any new CEO will likely have to spend years in repair mode before any real progress or turnaround is evident. The banks also has to deal with a growth cap that was put on by the Federal Reserve in 2018.
Smith would not be a cheap hire. He’s been at JP Morgan since 2007 and is owed upwards of $50 million in long-term pay. If he switches to Wells Fargo, the bank will likely have to cover at least some of that. Smith, who is 60, previously worked at American Express. He was paid $22 million in 2018.
The fact that Wells Fargo has gone so long without a CEO is not normal for a bank its size, and successors are usually picked years ahead. Right now, Wells Fargo’s general counsel Allen Parker has been acting as interim CEO.
JPMorgan Chief Executive Jamie Dimon recently commented on the search and how it’s been dragging out.
“It’s not responsible for a company — just my own view — to have a CEO leave with no plan in place,” he said. “I don’t personally understand that.”