As Wells Fargo’s chief executive, Timothy J. Sloan failed to clean up a series of scandals that rocked the bank and abruptly collapsed amid widespread criticism more than four years ago years.
He now claims Wells Fargo owes him at least $34 million in back pay.
Mr. Sloan sued Wells Fargo on Friday, claiming the bank owed him unpaid stock, bonuses and unspecified “emotional distress.” His lawyers said the bank scapegoated him for problems before his tenure, and they recharacterized his resignation under fire in 2019 as “an act of increased loyalty to the bank.”
The lawsuit came as a surprise, as Wells Fargo has been trying for years to move on from Mr. Sloan’s tenure and improve its relationships with customers and regulators.
Wells Fargo representative Beth Richek said the bank stands by its decision to withhold payment. “Compensation decisions are based on performance,” she said in a statement.
Once considered one of America’s best banks, Wells Fargo made headlines in 2016 after federal regulators revealed that it had put so much pressure on its employees to extract more money from their customers, that employees secretly opened millions of fake accounts in the names of customers and deceived their customers. encourage them to buy unnecessary products. Regulators said the practices date back to 2011.
The bank has paid more than $1.5 billion in penalties to federal and state authorities, as well as $620 million to resolve lawsuits filed by its customers and shareholders.
In 2018, the Federal Reserve forced the bank to curb its growth until it changed its culture.
Mr. Sloan, who took over the bank in 2016 with a mandate to clean it up, abruptly resigned in 2019, shortly after coming under sharp attack for his testimony defending his work on Capitol Hill. When a member of Congress asked him if Wells Fargo could promise that it would no longer harm its customers, he replied, “I can’t promise you perfection.”
Mr. Sloan’s lawsuit says he did not negotiate a tough deal at the time “in a spirit of mutual trust.”
