Wells Fargo (WFC) - Get Wells Fargo & Company Report shares traded lower Friday after CEO Tim Sloan said he would step down after just three years at the helm as the bank attempts to put years of scandals and political criticism behind it by seeking an outsider to lead the fourth largest U.S. lender.
Sloan, 58, replaced ousted CEO John Stumpf in 2016 as the bank reeled from revelations that staff had created millions of fake accounts in order to boost internal performance targets. However, several investors, as well as high-level political figures such as Democratic Presidential candidate Elizabeth Warren, questioned whether Sloan, a 31-year veteran of the bank, was the right person to address cultural and systemic issues within the sprawling banking group.
"I want to assure all of our stakeholders that this was my decision and is not related to our first-quarter financial performance, the long-term outlook for the company or any newly discovered issues," Sloan told reporters during a press conference late Thursday.
Wells Fargo shares were marked 1.04% lower Friday to $48.60 each, a move that would trim the stock's year-to-date gain to around 3.5% and value the San Francisco, California-based lender at just under $224 billion.
General Counsel Allen Parker will serve as interim CEO as the bank searches for what the board said will be an "external" search for a permanent replacement.
"Although we have many talented executives within the Company, the Board has concluded that seeking someone from the outside is the most effective way to complete the transformation at Wells Fargo", said chairwoman Betsy Duke. "During this search period, the Board and I will work closely with Allen and the company's leadership team to continue to move forward on Wells Fargo's goals and commitments."
Billionaire investor Warren Buffett, a long-time backer of both Sloan and the bank itself, was asked only minutes before news of his retirement if he still supported the former chief operating officer and wholesale bank boss's efforts to drag the lender out of the fake accounts scandal.
"Yes, one hundred percent," he told CNBC's Becky Quick during an industry event in Texas, adding "but I wouldn't want his job."