John Stumpf and Wells Fargo

Taking a holistic look at a company and CEO

Luke Visconti is the founder and CEO of DiversityInc. Although the title of his column is meant to be humorous, the issues he addresses and the answers he gives to questions are serious — and based on his 16 years of experience publishing DiversityInc. Click here to send your own question to Luke.

Taking a holistic look at a company and CEO

As expected, our recent article on Wells Fargo drew a critical response bashing John Stumpf and management.

It’s all fun and games to beat up on John Stumpf now, but when our country needed him — in the depth of the financial crisis when Wachovia was failing — John Stumpf was able to integrate Wachovia without losing most of their team members or their successful culture (a very difficult thing to do). In the following five years, the combined team has been able to grow the bank’s revenue by another third. In addition, if you held onto your Wells Fargo stock through the crisis, you didn’t lose any money.

Further, despite the incredible hours he must have been putting in with his management team on integrating Wachovia as well as navigating the crisis and recession, he focused on diversity — he hired Jimmie Paschall (who, despite her sunny demeanor, is a demanding, focused and intense executive) and dramatically improved their performance in offering opportunities and developing people inclusively. In the past five years, Wells Fargo has risen from number 26 on our Top 50 list to number 12. An amazing accomplishment, considering everything they were going through as a company, but I have personally seen how this was an integrated and holistic approach to business, led by John Stumpf himself.

You’ll notice I spoke about business before diversity. That’s on purpose. John Stumpf treated diversity as a business subject and executed as well as he did on everything else. Yes, huge mistakes were made in the consumer bank — but John Stumpf, after having a bad appearance in front of the Senate, has turned around and given back a huge portion of his income and the retired head of consumer banking has done the same. I have no doubt Wells Fargo will make it right with all of their customers who were wronged — and I understand efforts are also underway to try and make it right with employees who got caught up in this mess.

In the interest of full disclosure, Wells Fargo does business with my company. I do business with them. They are about 2 percent of my gross revenue, which means I could write a column saying John Stumpf is the devil himself and the resulting loss of business would not be meaningful to me. I respect John Stumpf; I think he’s a great businessman and American. Especially for those of you interested in diversity, Wells Fargo is a good company and they do good things for the community and I am proud to be a customer of theirs.

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  • I’m having trouble reconciling what I’m hearing from you and reports that are coming out regarding this situation Congress is investigating. How can he be a great, inclusive people manager yet have these horrible actions going on under his lead? It’s incongruous.

    • I understand what you mean. Apparently he missed it, the board missed it and the analysts missed it. I think quotas are a bad idea and commissions for non-professional salespeople are a way to encourage bad behavior.

      I think the representatives were enraged by John Stumpf’s poor performance in front of the senate.

  • So, what you’re saying is that because Stumpf and Wells Fargo abused their employees without regard to gender, race, ethnicity, or disability, that Stumpf should be forgiven for that? Wells Fargo employees allegedly had to work overtime without pay to make their impossible quotas, and that’s just fine with you? Wells Fargo managers and employees set up all these fake accounts, and that’s no problem because they screwed customers equally?

    Being ethical in one area of business does not excuse unethical actions in others. Sorry. The original Wachovia (before being bought by First Union and then Wells Fargo) was a good bank. Not now.

    • No, that’s not what I’m saying at all.

      But you’re right, you can have the best intentions and get it right 99% of the time, but when things go wrong, leadership has to make it right. Forthrightly, quickly and fully.

  • As an employee of Wells Fargo I have a personal view of how John Stumpf has always stressed the welfare of customers first and foremost. It is unfortunate that some of my fellow employees did horrible and inexcusable acts against our customers. That is intolerable and unforgiveable. Please keep in mind that the vast and overwhelming majority of our team members DID NOT AND WILL NOT participate in those illegal and unscrupulous activities. Whoever did participate, knew what was going on, and benefitted from it should be held accountable. Also, anyone who thwarted attempts to bring the illegal practices to light needs reprimanding.
    I have worked at other banks and can attest that most banks, if not all, have sales quotas in place for their retail divisions so don’t be surprised if more of this dishonesty is uncovered in other banks. Unfortunately the pressure to sell to products to consumers is an industry wide issue.

  • What you are hearing in the news media is NOT the full story. Period. John Stumpf is one of the most ethical CEOs out there. He is taking full responsibility and you’ll notice, not throw his fellow executives under the bus. The truth is, middle management were the ones that caused this issue. They pressured team members to engage in aggressive sales practices so that THEY would get their bonuses and meet THEIR goals. The corporate culture and the Vision and Values of this company is not and was not the problem. It was team members who did not follow the Code of Ethics, Vision and Values, and the reporting processes for Ethics violations. The whistleblowers that “reported” their concerns and were fired are not blameless, and because their reporting had to go up through the channels, of course top tier management didn’t hear about it for quite some time. The people causing the conflicts are part of that channel and were able to block escalation. I agree with Luke. I am a proud customer of Wells Fargo.

  • As a matter of perspective, Eva Braun thought her significant other (also a sponsor) was an okay guy too. So sad to see you rush to judgment without all of the facts. As you should know, the Sarbanes-Oxley Act of 2002 (SOX) is an act passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. The SOX Act mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud. I guess this dog called Sarbanes-Oxley doesn’t have any teeth and can’t hunt after all.

    • I think comparing Luke to Hitler’s mistress is really going a bit too far. And personally, I’m not sure that you know all the facts, because the reality is, what’s in the news and all of what you hear on the internet does not fully represent all the facts. I wonder if you ran a company of some 250,000 employees you would know what each one of them and their managers do on a daily basis. Sure this kind of thing is wrong, no argument there, we all know that. But let’s keep things in perspective shall we? The unethical acts of certain team members as driven by their direct supervisors or managers does not amount to a corporate conspiracy against its customers. Common sense would tell you that the context of these actions would damage a customer’s trust. Having worked for the same company for over 30 years myself, I personally don’t think a 30-year career person would ever jeopardize the trust customer’s have in the company he runs. That’s just plain ridiculous.

  • Wells Fargo is a very good forward looking company. Yes, one business line did not follow the company ‘s policies. However, Mr. Stumpf and the board of directors are taking responsibility and taking actions to make things right. This includes actions with affected customers and employees (current and future) by tightening up policies to prevent future occurrences. I wouldn’t be so quick to throw out the baby with the bath water. Wells Fargo is not perfect, no company is, but they work hard to do the right thing; in this instance they did not get it right.

    • David Andersen

      Well put Gwen and Luke. What happened was not ok, and oversight is not an excuse. Wells has been working on this issue well before this came out. They are not perfect, but the culture of the company over time has been one of the most outstanding and honest banks out there. I think what John Stumpf is doing, and has been doing already shows that he has much more at stake than just his money and job. Rather than jumping ship…he allowed the mistake to happen under his guidance, and he now has to make it right. I’m confident that a bank with Wells’ foundation will remain a trustworthy bank and a good investment. One last note…..let’s see how well other banks fare as this all unravels. I have a feeling it stems well beyond the culture of Wells Fargo.

  • What’s wrong with this sentence??
    ” he hired Jimmie Paschall (who, despite her sunny demeanor, is a demanding, focused and intense executive) and dramatically improved their performance in offering opportunities and developing people inclusively. ”
    I don’t think if the executive were named James Paschail, there would have been a comment like “James Paschal (who despite his sunny demeanor is a demanding, focused and intense executive) improved their performance……..”
    ,” I am astonished to find that statement on a diversity website…

      • It’s true. I do not know Jimmie. But my comment iwas not about Jimmie. II was suggesting that specific description of her sounds sexist.. I can’t imagine it would ever have been included in a statement about a man…

        • You don’t like “despite her sunny demeanor, is a demanding, focused and intense executive”?

          Please. I make mistakes now and then, this isn’t one of them. John Stumpf has a sunny demeanor too – he’s Minnesota nice.

  • Thank you for the recognition and support. Wells Fargo has always been involved in the community continues to provide support even during times when they address internal items.

  • You are correct in that WF was about to intergrate Wachovia without losing a great portion of THEIR employees because it was the WF employees that were terminated instead. Yes WF focus on diversity in so much that more qualified candidates are passed over in an effort to maintain the Diversity numbers.

  • I’m thankful to see anyone with any sense at all sees what Wells Fargo does in their communities. As long as humans do the work, people will make poor decisions whether managers or individuals.

    To me, it’s amazing how quick people are to judge without all the facts or without knowing the person. Media sensationalizing the facts will be the downfall of us all because most are too uninformed to understand the actual details and facts! Believe half of what you see, none of what you read….

  • Scott Craven

    I don’t judge any one person at Wells Fargo but when I worked there I dealt with a ton of shady unethical pressure from branch and district managers. I mean credit card sign ups being slipped in between papers to get signatures and have accounts opened for people unknowingly. Blatant lying to customers. The whole playing dumb act was used over and over again. My manager had me skip over my training of ethical lending so I could start selling. I hated working there and left quickly. As a customer with a checking and savings account with low balances I had an employee hound me about opening a second set of accounts to diversify. I was in shock and just walked out. When I closed my savings account just a week ago a manager gave the guy a terrible look as I walked out. I am good at reading faces and that face said “why didn’t you retain that account?” While I’m not disagreeing with your comments about Mr. Stumpf it does seem to still be a problem there. You were also right that they are not alone in this. These banks will continue to do these things as long as they continue to get away with it.

    • I think you’re pointing out something that’s very fair – there’s a difference between strategic intent and misbehavior on a local level. Several very good companies have been involved in class action lawsuits due to the misbehavior of a rogue executive.

  • Michael Walker, Esq.

    Mr. Visconti-
    I enjoy your site but have come to expect more from you and the site. Certainly I can understand taking a business stance…that is to say, I understand Wells is a sponsor of your site but again I come to expect more. Wells Fargo has been busy with some sort of fraud or another notwithstanding this latest issue for some time. In addition, I would suggest that simply hiring someone of color especially for a bank isn’t equity. The CDA numbers across the board for the institution is wanting and the bank was downgraded for their apparent lack of investment in communities of color. So, I say again, I have come to expect more.

    • Wells Fargo’s CRA rating has not been downgraded, the government has not released Wells Fargo’s CRA rating since 2012, Rep. Maxine Waters is demanding the regulators do that now.

      I was transparent in disclosing Wells Fargo’s customer relationship with me. It’s less than 2% of my gross revenue. I cut my ties with a competitor of theirs (who was spending a similar amount) because I didn’t like the way I was treated. I started DiversityInc 20 years ago, in the greater scope, Wells Fargo is not a significant factor in my life, although I do appreciate the relationships I’ve built with people over time.

      You’re an attorney in the Allentown area, right? Let’s be transparent together. What suits do you have pending, who are you representing that is suing the bank currently?

      • Michael Walker, Esq.

        So appreciate your response. As mentioned I enjoy your site tremendously. Not releasing the data and being downgraded are separate and distinct. I guess we can table until the numbers are released. Nonetheless, I practice in the Philadelphia area and currently I am not in suit against that particular bank but in the spirit of full disclosure I as a former wells customer am alarmed at the goings on and felt betrayed by my bank.

        Thanks for the dialogue and the wealth of knowledge you provide us regularly!!

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