John Stumpf has stepped down as chief executive and chairman of Wells Fargo after the bank's image was hit hard by a scandal relating to its sales tactics.
The one-time boss will be replaced by the firm's current president and chief operating officer Timothy J Sloan, with the bank noting that he won't be given a severance package at his own recommendation.
His departure follows on from continued reports about the company's tactic of creating fake accounts using customers' names without their consent. This was reportedly done by employees of the company to meet unrealistic sales goals with some outlets alleging that the practice had been ongoing "way before 2011". As many as two million fake accounts are believed to have been created over the past five years, with an estimated 5,3000 employees fired due to the scandal.
Earlier this week the Wall Street Journal (WSJ) reported that Wall Wells Fargo executives had a closed conference call to discuss the state of the business, but under Stumpf's leadership public sentiment toward the brand's name remained low in light of the scam.
According to the YouGov BrandIndex, which tracks the buzz or net sentiment generated across all media and combines these metrics into an overall score ranging from 100 to -100 – advertising, news, social, word-of-mouth, the bank's score had dropped by 28 points since the allegations emerged. As of yesterday it sat -48, even lower than Samsung's score despite the latter's exploding battery crisis.
Stumpf’s departure comes after he was subjected to questioning in Washington around the bank's practices by both Democrats and Republicans. The WSJ has noted that the bank also faces numerous federal and state inquiries into its sales-practices issues, including from the Justice Department.