Howard Atkins' surprise departure appears to be the result of a personality conflict with his boss, CEO John Stumpf, but Atkins' mysterious resignation -- and uncertainty about the firm's financial footing without him -- has given investors cause for concern.
Updates stock price and information about Atkins' retirement package. SAN FRANCISCO ( TheStreet) -- Going through the process of elimination, Howard Atkins' abrupt departure from the C suite of Wells Fargo ( WFC) on Tuesday could be the result of a personality conflict with his boss CEO John Stumpf, according to industry observers. But the now-former CFO's mysterious resignation -- and uncertainty about the firm's financial footing without Atkins -- has given investors cause for concern.
Wells Fargo surprised Wall Street with the abrupt resignation of CFO Howard Atkins
On Wednesday, Wells shares were off as much as 3.5%, selling for $32.74 to $33.66 in intraday trading, vs. a close of $34.10 the prior session. On Thursday, the stock wavered between marginal gains and losses. Analysts predicted that the stock could come under more pressure as investors struggled to interpret the news. "We expect the stock to come under some near-term pressure as the market digests such a big surprise," said Sandler O'Neill's Scott Siefers, echoing the comments of many analysts. Atkins' track record at Wells Fargo, his reputation on Wall Street and clues in the bank's statement would seem to rule out the most serious issues that might have forced his resignation -- whether corruption, incompetence or a health issue. Yet Atkins and his former employer have so far refused to offer additional clarity on the reason for his unexpected departure, beyond saying it was "personal" in nature and unrelated to the firm's financial reporting. Until Wells Fargo files its annual report with the Securities and Exchange Commission -- which Atkins' successor, Tim Sloan, and not Atkins, will sign off on within the next couple of weeks -- the company's share price may just keep getting hammered. There's been a spate of departures at the top level of giant banks, but most of them had to do with poor performance during the financial crisis. Atkins' 10-year track record at Wells Fargo suggests just the opposite. An alumnus of retail banks like Chase Manhattan and PNC predecessor Midlantic Corp., Atkins is credited with having deftly steered Wells Fargo through the subprime era without much exposure to that type of risky debt. When Wells acquired Wachovia, which nearly fell under the weight of subprime, Atkins helped Wells offset related losses with hedging and accounting expertise - all while overseeing the integration of a bank that was nearly equal to the size of its acquirer. Sickness could also be ruled out. The 59-year-old banker appears to be in good health -- and, if he wasn't, it's unlikely that Wells would put him on unpaid leave for eight months and issue a pithy, mysterious press release about his departure that brought up more questions than it answered. >>>Read More: Wells Fargo CFO 'Retires' Unexpectedly
Wells' official statement and regulatory disclosures regarding Atkins' exit didn't include any remarks from the man in question. A statement from his boss, CEO John Stumpf, was less syrupy than one would expect from an amicable divorce. Additionally, while Wells is allowing Atkins to postpone his official end-date until Aug. 6 so that he will be eligible for his full retirement package -- worth about $22 million, according to the company's latest proxy filing -- he's been placed on unpaid leave until then.