In the end I think Tim Sloan didn't want Wells Fargo (WFC) to go through what he was going through and there wasn't a way to separate the two, unless he stepped down.
That's right, if Wells Fargo was going to put the reputational risk behind it at a time when bankers are once again about to be roasted in Washington, Tim would have to resign.
And so he did.
Listen to these words: "This was my decision, right, based upon what I thought and believe is the best for Wells Fargo, because there's just been too much focus on me and it is impacting our ability to move forward, right. And I just care so much about this company, right, and so much about our team, right, that I could not keep myself in a position where I might become a distraction. It's not the right thing for our shareholders."
These words ring true to me because I asked Tim earlier this year if he felt the baggage of being an insider was hurting the bank's turnaround. He said no, but if it did, he would resign.
So what did happen?
The cynics would say that the board just couldn't take a distracted Tim Sloan anymore and that he had to leave. But they would sure have had an odd way of showing it, given that they just handed him a 5% pay raise including a $2 million performance bonus to $18.4 million earlier this month. Why not? The bank delivered a very strong quarter and a very good year, much better than I think anyone would have expected even a year ago at this time.
No, to me, Tim's reasoning smacks of the truth, because of what's about to happen April 10 in Washington. That's when Maxine Waters convenes the House Financial Services Committee hearings on banking. All of the big bank heads will be there, including Tim, and I can tell you that he would be the focal point and the fodder once again -- and no matter what he said or did, the fact that he served as an executive during the days of John Stumpf meant he was guilty until proven guilty.
I am not saying that we should for one minute feel badly about a man who just made $18 million. That's not the way our country works. Expressing sympathy for the rich in this country is now considered taboo. I will say that Sloan was asked to clean up the stables -- and from what I can tell he's done a pretty good job without, at the same time, derailing the earnings.
If you look at the make-up of that committee, you only conclude that Sloan was going to be the subject of endless hectoring. He's just too easy a target because you are never going to be fully exonerated if you were a high-level exec at that giant bank, even if you were in no position to even know the scandal was happening, as I believe was the case with Sloan.
Plus, when you have a presidential candidate, a smart candidate, Elizabeth Warren, the senator from Massachusetts, arguing vociferously that the Justice Department should put Sloan in jail, it's hard for the bank NOT to be brought down with him.
In the end, it's America in 2019. This is what happens. Sloan read the tea leaves right. If he wanted to avoid making these hearings about how outrageous it is that someone from the Stumpf era is still in charge, he had to quit ahead of the hearings.
The smartest move this man could make is to quit, both for him and for his shareholders. The fairest? Now that's another story.