[Photo:  Tony Webster / Wikimedia Commons]

Wells Fargo Letter Describes Private Talks that Prompted Exit

New CEO’s Influence Outlined in Reply to California Lawmakers

Months before Wells Fargo’s fraudulent account practices became a national scandal, the bank’s most senior executives decided to remove retail-banking chief Carrie Tolstedt from her post.  Her division was at the epicenter of the 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 California officials. It offers new details on what led up to her departure, and shows that Tim Sloan, the then-COO and the current CEO, played a role in it.

Privately, John Stumpf had conferred early in 2016 with Sloan, who became COO 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.” The letter doesn’t elaborate on the reasons.

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 9/20/16 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.