Former Wells Fargo CEO Tim Sloan has filed a lawsuit against the company, seeking over $34 million in unpaid compensation.
Sloan alleged that Wells Fargo unlawfully withheld his deferred compensation and bonus after he resigned as CEO in 2019, Bloomberg reported on Friday (Dec. 1). In addition to the financial claims, Sloan is also seeking damages for emotional distress.
During Sloan’s tenure as CEO from October 2016 to March 2019, Wells Fargo faced multiple scandals and regulatory penalties, according to the report. The bank was hit by a growth cap imposed by the Federal Reserve that remains unresolved.
Sloan argued in his lawsuit that the problems at the bank predated his leadership and that he worked diligently to address them, the report said. He said the board did not blame him for the problems until they faced political and media criticism after his departure.
In the lawsuit, Sloan alleged that Wells Fargo was depriving him of compensation he earned throughout his career without good reason, the report said.
When Sloan left Wells Fargo, the company described it as his decision and a reflection of his commitment to the company. A Wells Fargo spokesperson told Bloomberg that compensation decisions are based on performance and that the bank stands by its decisions on the matter.
According to the report, Sloan took over as CEO of Wells Fargo in 2016 following a scandal involving fake customer accounts. He implemented various reforms to address the problems, but faced criticism of being an insider and not the right person to fix the bank. Ultimately, he stepped back, citing the distraction of the focus on him.
Since Sloan’s departure, regulators have imposed penalties on former Wells Fargo executives, but not on Sloan, the report said.
Wells Fargo canceled a $15 million stock grant granted to it, which Sloan said was done unlawfully and as a public display, the report said. The company later canceled other stock awards that had vested and were due for payout.
Sloan alleged that the bank used him as a scapegoat for the sales practices abuses that led to congressional scrutiny, despite his efforts to comply with regulatory requirements and address the problems, the report said.