NEW YORK (TheStreet) -- Shares of Wells Fargo (WFC) - Get Report were down in early-afternoon trading on Monday as CLSA said its support for the San Francisco bank's CEO John Stumpf is "wavering" in light of Wells Fargo's deceptive sales practices.
Earlier this month, the Consumer Financial Protection Bureau fined Wells Fargo $185 million after it was revealed that the company had opened about 2 million accounts illegally. Stumpf testified in front of the Senate Finance Committee last week.
"Our support for the CEO is now wavering and contingent on his ability to better detail repercussions to top management and contain reputational damage from the cross-selling fiasco," the firm said, according to Barron's. "His actions have been reactionary versus leading."
CLSA added that shareholders have a right to know what will happen to top executives' pay and how the board is being compensated.
The firm noted that Wells Fargo is "bigger than the CEO" and there should be "no more excuses" for the lack of transparency.
Wells Fargo must answer several ongoing questions, such as how the problems were able to continue for so long, how it plans to help impacted customers and whether it will claw back executive salaries, CLSA said.
Stumpf would likely walk away from Wells Fargo with $123.6 million in severance and stock value if he were to retire, according to USA Today. Stumpf has said he doesn't plan to step down.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates Wells Fargo as a Buy with a ratings score of B. This is driven by a few notable strengths, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and attractive valuation levels. The team feels its strengths outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: WFC