Wells Fargo & Co. CEO Tim Sloan gave in to critics and abruptly stepped down Thursday, after the 31-year company veteran struggled to tame a range of scandals, launching the fourth-largest U.S. bank into a hasty search for a successor.
Mr. Sloan, 58, will be replaced on an interim basis by the firm's general counsel, C. Allen Parker. The board said it plans to look externally for a permanent replacement. The stock climbed in extended trading.
Ever since Mr. Sloan took the helm in 2016, he's faced calls for his ouster from critics including Sen. Elizabeth Warren, a Democrat running for president. Critics said a longtime insider couldn't be counted on to clean up scandals emerging from the lender's vast branch network and other divisions. Just last week, the board reiterated its support for Mr. Sloan. And hours before Thursday's news, top shareholder Warren Buffett said he backs him "100 percent."
"They clearly have to regain their credibility," said John Reed, who ran Citigroup until 2000. "You have to somehow behave in a way that causes the world to say, 'OK, the past is behind them and they're moving forward.' And that's a leadership issue. The fact that you would turn to a lawyer for something like that is not strange."
Shares of Wells Fargo rose more than 2% in after-hours trading Thursday in New York.