Stumpf steps down

And then no doubt the biggest market news of the day, received after market. CEO and Chairman of Wells Fargo, John Stumpf is resigning. The stock has popped nearly two percent in the aftermarket. The company has a news release: Wells Fargo Chairman, CEO John Stumpf Retires; Board of Directors Elects Tim Sloan CEO. Immediate. Stumpf leaves to spend more time with his money. Although, as the filings report, he is not going to receive a severance package of any sort. He will still retain all of his stock, pension and other benefits.

In the end, Stumpf had to take the fall. Don't feel sorry for him. 34 years later at the company that he worked for, 9 years (and a bit) as the CEO, Stumpf has managed to amass around 134 million Dollars according to Equilar. And that was after he has forfeited 41 odd million Dollars in performance pay. At the end of the day, the remuneration of executives is a shareholders issue. Not society. That is my opinion. Society doesn't part with any funds in order to remunerate the people who run what is effectively their asset. Shareholders own the business. If they pay some bum too much and they mess it up, the shareholders bear the brunt in the end. When the stock goes to zero, society doesn't lose money.

It had to happen, Stumpf is out, Sloan is a 29 year veteran and essentially lifer at Wells Fargo. He has a tough job initially, to restore trust and more importantly, lead the bank into the modern era. American banking is still old school, it may need some time before their ability to change the landscape happens. All I know is that with a massive infrastructure, there is certainly a lot of room to manoeuvre on continued cost cutting.