As chief executive of Wells Fargo, Timothy J. Sloan failed to clean up a string of scandals that shook the bank and abruptly stepped down amid widespread criticism more than four years ago.
He now says Wells Fargo owes him at least $34 million in back pay.
Mr. Sloan sued Wells Fargo on Friday, saying that the bank owed him for unpaid stock awards, bonuses and unspecified “emotional distress.” His lawyers said that the bank he formerly led made him a scapegoat for problems that predated his tenure, and they recast his resignation under fire in 2019 as “an act of further loyalty to the bank.”
The lawsuit was a surprise move, inasmuch as Wells Fargo for years has been trying to move on from Mr. Sloan’s tenure and improve its relationship with both customers and regulators.
A Wells Fargo spokeswoman, Beth Richek, said the bank stood behind its decision to withhold the pay. “Compensation decisions are based on performance,” she said in a statement.
Once regarded as 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 wring more money out of customers, the employees secretly opened millions of fake accounts in customer names and tricked them into buying unnecessary products. Regulators said the practices dated back to 2011.
The bank paid more than $1.5 billion in penalties to federal and state authorities, and $620 million to resolve lawsuits from customers and shareholders.
In 2018, the Federal Reserve forced the bank to clamp down on its growth until it made changes to its culture.
Mr. Sloan, who took over the top job at the bank in 2016 with a mandate to clean it up, ’ abruptly resigned in 2019, shortly after he was roundly attacked for his testimony defending his work on Capitol Hill. Asked by a congressman whether Wells Fargo could promise that it would no longer harm customers, he punted, saying, “I can’t promise you perfection.”
Mr. Sloan’s lawsuit says he did not negotiate a severance agreement at the time “in the spirit of mutual trust.”
