Timothy Sloan, the former chief executive of Wells Fargo & Co., is suing the bank for $34 million for alleged contractual violations surrounding his departure in 2019 during a fake-account scandal at the bank.
The lawsuit accuses Wells Fargo
WFC,
of using Sloan “as a scapegoat” even though he wasn’t responsible for the sale-practice abuses and “despite the energy and resources he committed” to addressing regulatory demands.
A spokesperson for Wells Fargo said in an email to MarketWatch the bank stands by its decisions on Sloan’s pay and that “compensation decisions are based on performance.”
Sloan was chief executive of Wells Fargo
WFC,
from 2016 until March 2019. After 31 years at the bank, he retired in June 2019 as it faced regulatory pressure for creating potentially millions of unauthorized accounts.
He resigned after testifying before the House Financial Services Committee amid criticism for not making changes at the bank more quickly.
In 2020, the bank clawed back $15 million in pay from Sloan.
Sloan filed a civil complaint in San Francisco County Superior Court on Friday with law firm Rudy, Exelrod, Zieft & Lowe LLP.
The lawsuit alleges that Wells Fargo unlawfully canceled a $14 million equity grant in early 2020 and withheld bonuses.
The lawsuit seeks damages as well as about $34 million including a $1 million prorated bonus, $327,187 in restricted share rights, $8.08 million in 2017 performance stock awards, $10.8 million in 2018 performance stock awards and $13.57 million in 2019 performance stock awards.
Sloan is also seeking interest on this money as well as attorney fees.
Sloan is currently a senior advisor to the Fortress Credit Funds Business at Fortress Investment Group. He’s also on the firm’s investment committee of numerous Fortress Credit Funds and is a member of the credit leadership committee.
Wells Fargo & Co. stock was up fractionally in Monday afternoon trading. The stock is up 9.5% in 2023, compared with an 18.9% rise by the S&P 500
SPX.
Also read: Wells Fargo avoided paying overtime to ‘understaffed’ workers, class-action lawsuit claims
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