Who will be Wells Fargo's next CEO?

Wells Fargo's board of directors will have to balance competing priorities during the pressure-packed search for the bank’s next CEO.

Improving the scandal-plagued bank’s relationship with Washington politicians and regulators appears to be a clear priority. But a deep understanding of the banking business and a vision for how to adapt to rapid technological change also seem likely to be prized.

Finding all of the key attributes in a single person — especially a person who wants the job — may prove challenging.

A newly formed search committee of the board met for the first time on Friday. The committee is being chaired by James Quigley, who joined Wells Fargo's board in 2013. The other members are Maria Morris, Ronald Sargent and Wayne Hewett, all of whom have been added to the board in the last two years.

The search for Tim Sloan’s permanent successor is expected to focus on outside candidates, even though general counsel C. Allen Parker has taken over the job on an interim basis.

“We're going to act with urgency, but we want to be thorough in our search and find the candidate that we think will best fit the objectives for Wells Fargo,” board Chair Elizabeth Duke said during a conference call Thursday.

Below is a look at five different types of CEO candidates that Wells Fargo might consider.

A high-level executive with experience at another megabank
Marianne Lake, Chief Financial Officer at JPMorgan Chase.
Given the scale of Wells Fargo’s challenges, there would be obvious benefits to hiring a CEO with experience in a leadership role at a similarly sized bank.

Much of the early speculation about Wells Fargo’s search has focused on executives from JPMorgan Chase. The $2.6 trillion-asset bank has a deep bench, said Brian Kleinhanzl, an analyst at Keefe, Bruyette & Woods. “They are held in a good light by regulators,” he added.

Potential candidates in this category could include Marianne Lake (pictured), JPMorgan’s chief financial officer, and Gordon Smith, co-president and chief operating officer. Both are seen as possible successors to CEO Jamie Dimon.

Another name to consider is Matt Zames, the former chief operating officer at JPMorgan, who left the bank in 2017 and is currently president of Cerberus Capital Management.
The executive ranks, or ex-CEO, of a regional bank
davis-richard-us-bancorp
Experience as a chief executive figures to be an asset, even if it came at a smaller firm than San Francisco-based Wells.

“The core of what Wells Fargo is,” argued Christopher Wolfe, managing director for North American banks at Fitch Ratings, “is a very, very large regional bank.”

Many regional bank CEOs have experience in cutting costs, which figures to be a key priority for Wells. The $1.9 trillion-asset bank said last fall that it expects its employee headcount to decline by about 5% to 10% within the next three years.

On Monday, analysts at KBW downgraded shares in Wells Fargo in a research note titled “It’s tough to sail a ship without a captain.” They reasoned that the company’s projected cost savings will likely not materialize fully after Sloan’s departure.

Some observers have suggested that former U.S. Bancorp CEO Richard Davis, above, could be a strong candidate for the Wells job, if he is interested in the position. Davis was just 58 when he retired in 2017. He was named CEO of Make-A-Wish America, a nonprofit organization, in October.

Another observer suggested that the merger of "two large Southeast regional banks" — the source did not mention BB&T and SunTrust Banks by name — could also free up some potentially strong candidates.
An ex-regulator or banker with Washington ties
John Dugan
Given its need to repair its relations with regulators, Wells Fargo could turn to an ex-regulator or D.C. insider to fill the CEO job.

Wells is regulated by the Office of the Comptroller of the Currency, so it could turn to former comptrollers who have since entered the private sector. Thomas Curry stepped down as comptroller in 2017 before becoming a partner at Nutter McClennen & Fish LLP. John Dugan, above, who chairs the board of Citigroup, advised large banks as a private attorney before serving as comptroller in the George W. Bush administration from 2005 to 2010. He also previously held senior positions at the Treasury Department and as a Capitol Hill staffer.

Another crisis-era regulator that Wells Fargo could consider to help the banks navigate through its various government orders is Sheila Bair, the former chair of the Federal Deposit Insurance Corp. Bair, a Republican, won high marks from Democrats for her tough approach in the crisis, but she also at times butted heads with some in the industry.

Robert Steel, the undersecretary of Treasury for Domestic Finance from 2006 to 2008, would have the advantage of having already been a CEO at a large troubled bank. He was named chief executive of Wachovia in July 2008 to try to right the institution, which was suffering mortgage-related losses at the time, and eventually approved the bank’s sale to Wells Fargo later that year.

A number of former regulators have already played pivotal roles representing or advising large institutions in Congress. Julie Williams was a longtime chief counsel at the OCC (where she twice served as acting comptroller) before joining the consulting firm Promontory Financial Group, where she holds the title of managing director.

Greg Baer is the head of the Bank Policy Institute, a Washington-based trade organization representing several of the largest financial institutions, including Wells. He has held senior jobs at Bank of America and JPMorgan Chase. He previously served in the government at the Treasury and the Federal Reserve.

Then there's Betsy Duke, Wells Fargo's own board chair. The board has said it will only consider external candidates, but if it reverses course and eyes one of its own, Duke would bring not only executive experience — she was the CEO of a Virginia community bank, Bank of Tidewater, until it was acquired in 2001 — but an intimate knowledge of how Washington works. She was a member of the Federal Reserve's board of governors from 2008 to 2013.
A tech industry executive
Ruth Porat, chief financial officer of Alphabet, the parent company of Google.
Sloan often talked about the importance of technology, but he came from a traditional banking background, having spent more than three decades at Wells Fargo.

In her annual letter to shareholders in February, Duke highlighted tech as an area of focus. “Thoughtful use of emerging technologies can enable quantum leaps in innovation and efficiency,” she wrote. “At the same time, cyber risk is at an all-time high.”

A Silicon Valley executive who took the top job at Wells Fargo would not have to relocate to San Francisco, which could work in the bank’s favor.

One name that has gotten attention over the last few days is Ruth Porat, Google’s chief financial officer (pictured). Unlike many tech industry executives, Porat also has extensive experience in finance, having previously served as Morgan Stanley’s CFO.
An investment banker
Gary Cohn, former director of the White House Economic Council and, before that, president of Goldman Sachs.
This choice is not the most obvious, given Wells Fargo’s historic roots in commercial banking.

But there’s a lot of talent on Wall Street. Goldman Sachs, in particular, has long had a reputation as a magnet for many of the brightest minds in finance.

Before Sloan’s resignation, the New York Post reported that Wells board members had been in contact with two former Goldman executives — Gary Cohn, above, and Harvey Schwartz — about the CEO job. Wells Fargo denied the reports.