Wells Fargo, CIT Group and Marcus: Bankers on the Move

April 9, 2019 9:13 PM

Tim Sloan's resignation from Wells Fargo took center stage in a month of executive exits.

The departure of the embattled CEO of the nation’s fourth-largest bank did little to stop the criticism of Wells Fargo, which has repeatedly stumbled in the wake of a scandal in which employees created thousands of bogus customer accounts.

There were other high-profile departures during the month. Goldman Sachs' Marcus retail bank lost its chief product officer and LendingClub noted the departure of two prominent board members, including John Mack, former CEO of Morgan Stanley.

There were promotions and new postings as well. CIT Group recruited its new general counsel from TIAA Bank. Boston Private also selected its top legal officer. Hanmi Financial in Los Angeles named a new CEO.

Following is a look at key executive moves in the past months.

Tim Sloan, president and chief executive officer of Wells Fargo & Co., waits for the start of a House Financial Services Committee hearing in Washington, D.C., U.S., on Tuesday, March 12, 2019. Scandals at Wells Fargo erupted in 2016 on the revelation that bank employees opened millions of potentially fake accounts to meet sales goals. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

Tim Sloan suddenly resigns

From the start of his tenure in late 2016, Democratic lawmakers were calling for Tim Sloan's head.

They finally got it late last month, as the CEO abruptly announced his retirement on March 28, a move that he said would benefit the company as it attempts to rebuild its reputation after a slew of scandals over the last few years.

Though Sloan, 58, does not officially retire until June 30, he stepped down as CEO immediately, leaving Wells’ general counsel, C. Allen Parker, as interim CEO until the firm decides on a permanent replacement.

“We have made progress in many areas and, while there remains more work to be done, I am confident in our leadership team and optimistic about the future of Wells Fargo,” Sloan said. “However, it has become apparent to me that our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives.”

Sloan's sudden exit came a week after a rocky appearance before the House Financial Services Committee. His predecessor, John Stumpf, announced his departure in much the same fashion in October 2016 after offering a shaky defense of the bank to Congress.

Since Sloan took over over, the bank has been beset by additional scandals, including allegations that it overcharged customers for auto insurance and home loans, overcharged veterans for home loans and made false certifications of FHA loans. The Federal Reserve last year took the unusual step of capping the bank's asset size in a consent decree — a cap that Fed Chairman Jerome Powell has indicated would not be removed anytime soon.

Pedestrians walk outside the former CIT headquarters in New York.

CIT Group lures top TIAA lawyer

CIT Group looked to the top lawyer at TIAA Bank for its new general counsel.

James Hubbard joined the $48.5 billion-asset company on March 11. He reports to Chairwoman and CEO Ellen Alemany.

Stuart Alderoty had been CIT’s general counsel since October 2016, after working at HSBC North America in the same position. Alderoty left CIT Group in January to become general counsel of Ripple, a San Francisco fintech involved in blockchain technologies.

Hubbard had been at the $37 billion-asset TIAA Bank and its predecessor company, EverBank Financial, since 2015.

Hubbard had previously worked for Fifth Third Bancorp and the Kaye Scholer law firm.

Boston Private picks top counsel

Boston Private announced Colleen Graham joined its roster as executive vice president and general counsel, effective April 8.

Graham comes from NextGen Compliance, a legal and compliance advisory firm she founded and led as CEO.

At the $8 billion-asset private bank, Graham will oversee legal and compliance, and administrative oversight of internal audit. She will report directly to Boston Private CEO Anthony DeChellis.

Previously, she was the founder and co-CEO of Signac, a joint fintech venture between Credit Suisse and Palantir Technologies. Earlier in her career, Graham worked at Credit Suisse, serving as managing director and head of Compliance Americas.

Hanmi Financial names new CEO

Bonnie Lee will be the next CEO of Hanmi Financial in Los Angeles.

The $5.5 billion-asset company said Lee will take on the new role May 3. Lee joined Hanmi's board, effective immediately.

Lee will succeed C.G. Kum, who last summer announced plans to retire. Lee joined Hanmi as its chief operating officer in 2013; she became president in 2018. Hanmi noted that its assets have nearly doubled since she joined the company.

Lee previously served as chief operating officer at BBCN Bank and as regional president of the western region for Shinhan Bank America.

Top talent exits Marcus

The hiring of Michael Cerda, Facebook's former head of media products, was deemed a coup for Goldman Sachs’ consumer bank Marcus in 2017.

But on April 2, the Financial Times confirmed a report that Cerda was tired of commuting between his job as chief product officer in New York and his family in Los Angeles.

His early departure “highlights the challenges big banks face to attract and retain top tech talent.”

Fannie makes it official

Fannie Mae has named Hugh Frater permanent CEO on March 27. He had held the job on an interim basis since October.

“Hugh's deep understanding of the housing and the financial services industries, broad experience, and strong leadership skills make him an ideal choice to lead Fannie Mae,” said Jonathan Plutzik, Fannie Mae’s chairman, in a press release.

Frater served as chairman of Berkadia Commercial Mortgage from 2014 to 2015 and was that company’s CEO from 2010 to 2014. Frater is also chairman of Vereit, a Phoenix real estate investment trust, and remains on Fannie’s board.

Frater succeeds Timothy Mayopoulos, who retired in October after leading the government-sponsored enterprise since 2012.

The First of Long Island selects new CEO

The First of Long Island in Glen Head, N.Y., named Christopher Becker as its new chief executive on March 19.

The $4.2 billion-asset company said in a press release that Becker will also become its president on Jan. 1. He will succeed Michael Vittorio, 66, who will retire after 17 years leading the company.

Becker, 53, is the company’s chief risk officer and corporate secretary. He is responsible for enterprise risk management, including oversight of strategic planning, technology and loan and deposit operations, among other things.

Becker, previously chief financial officer at the Bank of Smithtown, “has a tremendous work ethic and a comprehensive knowledge of the business,” Vittorio said in the release.

John Mack, Mary Meeker leave LendingClub board

Two prominent members of LendingClub's board of directors, John Mack and Mary Meeker, will not seek re-election.

Mack is the former CEO of Morgan Stanley. Meeker is a former Wall Street analyst who later became a partner at the Silicon Valley venture capital firm Kleiner Perkins.

Both of them joined LendingClub’s board in 2012, two years before the online lender’s initial public offering. They will remain on the board until the firm’s 2019 annual meeting, which is expected to be held during the second quarter.

“There was no disagreement with the company; instead, they decided not to stand for re-election so each could allocate more of their time and effort to other interests and opportunities,” a spokeswoman for the San Francisco company said in an email on March 29.

Susan Athey, a professor at Stanford’s business school, joined the LendingClub board last year, shortly before former Treasury Secretary Lawrence Summers resigned from the board. Other recent additions to the board include Ken Denman, the former CEO of Emotient, and Patty McCord, the former chief talent officer at Netflix.

Citing health issue, longtime Eagle Bancorp CEO steps down

Ronald Paul, longtime chairman and CEO of Eagle Bancorp in Bethesda, Md., has retired.

Paul, 62, stepped down due to “serious health developments which would substantially interfere with his ability to perform his duties,” the $8.4 billion-asset company said in a March 21 press release.

Eagle did not disclose any specifics on Paul’s health, though he was diagnosed in the 1980s with glomerulosclerosis, a kidney disease that can result in kidney failure. He received a kidney from his brother in 1990, and another in 2009 from Kathy McCallum, the chief financial officer of his real estate company.

Paul and his wife established a kidney center at George Washington University in 2015. He was chairman of the National Kidney Foundation from 2002 to 2003.

Eagle appointed Norman Pozez, the company’s vice chairman and a director since 2008, to succeed Paul as chairman. Susan Riel, chief operating officer of EagleBank, was named interim president and CEO.

The board will review alternatives for a permanent successor in coming weeks.

“I am very disappointed to have to make this decision, but I do not believe it would be fair to the company, its employees, customers and shareholders when my health prevents me from devoting my full attention to helping them develop and prosper,” Paul said in the release.

Paul has led Eagle since its formation in 1997. He was named one of American Banker’s Community Bankers of the Year in 2012.