Wells Fargo’s most senior executives decided early this year to remove retail-banking chief Carrie Tolstedt from her post, months before she announced plans to retire and her division became the epicenter of a national scandal.
The behind-the-scenes deliberations were described in a letter the bank sent to U.S. lawmakers in September, according to a copy posted online this week by officials in California. It offers new details on what led up to her departure, and shows that Tim Sloan, who rose to chief executive officer in October, played a role in it.
Wells Fargo has faced political furor since regulators said the consumer branch network Tolstedt led since 2006 may have opened more than 2 million unauthorized accounts for customers, generating fees and damaging credit reports. Some lawmakers took particular issue with a July press release, in which then-CEO John Stumpf, 63, lauded Tolstedt’s leadership while announcing she decided to retire at year-end. She relinquished her post that month.
But, privately, Stumpf had conferred early in the year with Sloan, 56, who became chief operating officer and Tolstedt’s boss last November.
After the conversation, Stumpf “decided that for various reasons the business would move in a different direction, meaning that Ms. Tolstedt would be removed,” the bank wrote. “After Ms. Tolstedt was told of the decision, she decided that she would retire.”
Mary Mack, a Charlotte-based executive, replaced Tolstedt.
The letter doesn’t elaborate on the reasons. Tolstedt, 57, didn’t respond to messages seeking comment. Jennifer Dunn, a Wells Fargo spokeswoman, declined to comment on internal discussions about Tolstedt’s departure.
When announcing Tolstedt’s retirement plan in July, Stumpf described her as a “dear friend,” who served as “a standard-bearer of our culture, a champion for our customers and a role model for responsible, principled and inclusive leadership.” He didn’t mention the probes of her division that two months later yielded $185 million in fines. He told lawmakers at a Sept. 20 hearing that he hadn’t considered firing her over the inquiries.
A few weeks later, Stumpf resigned. Tolstedt, who was scheduled to remain at the company until the end of the year, also has left. Together, they’re giving up about $60 million of unvested stock.
Other documents released Monday by the California Senate Banking and Financial Institutions Committee provided a more detailed breakdown of the 5,367 employees fired over sales-practice violations that spanned about five years. They included 477 branch managers, five district managers and one area president.
The company still faces related investigations by the Department of Justice, Department of Labor and Securities and Exchange Commission into the accounts, pressure placed on employees to hit targets and disclosures to investors.