- Wells Fargo has embarked on a search for a new CEO, focusing only on external candidates.
- The bank reported disappointing guidance in its first quarter results, heightening need to replace Sloan.
- Markets Insider has compiled a list of the top women in the financial industry who are qualified for the job.
- Watch Wells Fargo trade live.
The race to succeed former CEO Tim Sloan at Wells Fargo has taken on new urgency after the company provided sharply lower guidance on Friday. In contrast to rival JPMorgan, Wells indicated its net interest margin would be down for 2019. The stock fell almost 3% on the news.
Sloan retired last month after facing a charged Congressional hearing which highlighted the bank’s various scandals and customer abuses. Board member Allen Parker has taken the position as interim CEO as the search kicks off. While the next CEO will face a raft of challenges, the board is acutely focused on finding the best man – or woman – for the job.
According to a statement from the Wells Fargo board of directors, only external candidates will be considered. The opportunity is a rare chance for an outsider to join as head of one of the nation’s largest banks.
While many financial commentators have focused on potential male candidates, such as former Goldman execs Gary Cohn and Harvey Schwartz, Markets Insider has compiled a list of some of the top woman in banking who could be considered for the position.
The opening at Wells Fargo presents significant risks as well as opportunities for any newcomer. To date, the company faces no less than 14 consent orders, formal reprimands demanding specific fixes from a swath of regulators including the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau. The Federal Reserve, in its own consent order, placed an unprecedented $US2 trillion cap on the lender’s assets until further notice.
With success, the person could be lauded as one of the industry greats. Should the person fail, however, the next CEO’s career might suffer the same fate as that of Wells Fargo’s past two CEOs. The risks, and rewards, are high.
Warren Buffett, who controls nearly 10% Wells Fargo shares, recently told The Financial Times that the next CEO should not come from Wall Street.
“They just have to come from someplace [outside Wells] and they shouldn’t come from Wall Street,” Mr Buffett said in the interview. “They probably shouldn’t come from JPMorgan or Goldman Sachs.” The widely followed investor noted that such a candidate would be sure to draw fire from the US Congress.
A notable miss from our list is senior Wells Fargo executive Mary Mack, head of consumer banking, as the board has specifically ruled out internal candidates. Mack ranks among the most senior executives in banking, overseeing more than 100,000 employees in her division.
Check out Markets Insider’s list of candidates below:
1. Marianne Lake
Company: JPMorgan Chase
Years with company: 19
Despite Buffett’s caution on Wall Street executives, the CEO position at Wells Fargo may be Lake’s for the taking. There are few executives with her depth of financial experience at a major bank and she has been widely mentioned in press reports as a top-notch candidate to succeed Sloan.
She has served as the CFO of JPMorgan Chase since 2012, ushering in a period of stability after the disastrous “London Whale” trading debacle which occurred under her predecessor, Doug Braunstein.
Lake, who is the only female CFO among the bulge bracket, is also a member of the JPMorgan’s all-powerful operating committee, reserved for the most senior executives of the firm.
Lake has taken firm reign of the mega-banks financial position, including driving the annual Comprehensive Capital Analysis and Review regulatory stress tests overseen by the Fed, as well as helping CEO Jamie Dimon devise strategy and capital allocation for the firm.
Though born in America, Lake answers investor questions in a crisp British accent, reflecting her upbringing in England. She is the only executive other than Dimon to participate in the bank’s quarterly-earnings updates. Dimon often defers to her to answer more technical questions.
Lake has made clear to the JPMorgan board, chaired by Dimon, that she has ambitions well beyond the CFO seat, according to a report by Reuters. The question is whether Wells Fargo can lure her, or if she is willing to wait for a shot at running JPMorgan itself after Dimon’s departure. That may take five years or more.
Recent news, however, may prompt Lake to consider the Wells Fargo opportunity more seriously. While Dimon did not affirm that a woman or person of colour would likely succeed him at the hearing, he later clarified that JPMorgan does not comment on succession plans.
“That’s a board-level issue,” Dimon said on the bank’s first quarter earnings call. “But also I was confused by the question ‘likely’ without a timetable.”
He added: “So, we have exceptional women. And my successor may very well be a woman and it may not. And it really depends on the circumstance…And it might be different if it’s one year from now versus five years from now.”
2. Thasunda Duckett
Company: JPMorgan Chase
Title: CEO of Chase Consumer Banking
Years with company: 14
Just behind Lake is another JPMorgan Chase executive, Thasunda Brown Duckett, who continues her rocket-like ascent at the firm. Duckett oversees a banking network with $US750 billion of total deposits and more than 47,000 employees. The business serves more than 23 million households nationwide, meaning her business is connected to one in six Americans.
She reports directly to Gordon Smith, global head of consumer and is a co-president of the firm, placing her just two steps below Jamie Dimon on the corporate ladder.
In stark contrast to Wells Fargo, as well as other divisions of JPMorgan, the Chase consumer bank has continued to deliver record results while avoiding major, and even minor, scandal.
Prior to assuming her current position in 2016, Duckett was the CEO of Chase auto finance and managed a portfolio of $US60 billion in assets. Under her leadership the business vaulted from No. 27 to No. 1 in the JD Power Deal Financing Satisfaction Survey.
“As a business leader, I think of myself as a coach,” said Duckett in one of JPMorgan’s “Lessons in Life & Leadership” series. “It’s my responsibility to build a strong team, design a winning strategy and execute the strategy with excellence to bring the team to victory.”
3. Barbara Desoer
Title: CEO of Citibank North America
Years with company: 4
Desoer has been CEO of Citibank North America since 2014. The division controls nearly $US1.5 trillion of the mega-bank’s assets and comprises a branch network with subsidiaries in 95 countries and territories, including the company’s US business. Desoer is a member of Citi’s operating committee.
Desoer also has wide-ranging responsibilities across the company, leading critical areas such as the anti-money-laundering function and the bank’s Comprehensive Capital Analysis and Review regulatory stress tests which are overseen by the Fed.
Prior to joining Citi, Desoer had a 35-year career at Bank of America, running Bank of America home loans which represents 20% of the US mortgage market, serving 14 million customer loans. She also has strong experience in the control functions, having served as chief of global technology and operations. Desoer was also a senior executive in the consumer-products division, overseeing deposit accounts, credit cards, and lending.
4. Jane Fraser
Title: CEO of Citigroup Latin America
Years with company: 14 years
Fraser is the CEO of Citigroup Latin America, which oversees 23 countries and the firm’s strong presence in Mexico. Fraser is a member of Citi’s operating committee.
Fraser has wide experience across the company’s operations having served as CEO of US consumer, CEO of the private bank, and head of client strategy for the global banking division.
In addition, Desoer served in a critical role as global head of strategy and mergers & acquisitions through the global financial crisis from 2007 to 2009. The time period was especially rocky for Citi as the bank faced calls to break up.
Prior to joining Citigroup, Fraser worked at McKinsey and Goldman Sachs.
5. Karen Larrimer
Company: PNC Financial Services Group
Title: Head of retail banking and chief customer officer
Years with company: 24
Larrimer is head of retail banking at PNC, a division with over $US160 billion of customer deposits and nearly 30,000 employees. As head of retail, Larrimer is responsible for all aspects of PNC’s consumer businesses, including the 2,000+ branch network and digital banking.
In addition to this role, Larrimer has been chief customer officer of the bank since 2014 and maintains both roles. She has steadily rose through ranks of the company during her 24-year tenure with a strong experience in marketing. She also is a member of the executive team of the lender, and is on the board of the PNC Foundation.
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