Wells Fargo Recovers, Thanks to Charlie Scharf’s Persistence

The document to rescue Wells Fargo, Charlie Scharf recalls, was 3,162 pages long. It included 6,000 tasks and involved 28,000 people.

From February 2018 to December 2020, Wells Fargo’s share price dropped by two-thirds. (Photo: Downtown Vision, Inc.)

This extensive volume was the plan to save Wells Fargo that Scharf and his team developed shortly after he took over as CEO in October 2019, Shawn Tully reported for Fortune.

At the time, Wells had been laboring under a regulatory crackdown following the scandal that tarnished the bank’s once-stellar reputation — the revelation that it had bilked millions of customers by creating fake and unnecessary accounts.

That led to a draconian Federal Reserve penalty: a hard limit on the bank’s total assets, which essentially blocked Wells from raising the deposits that are the lifeblood of banking.

The process of recovery was grueling. Scharf recalls that every Monday morning, he would lead a two-hour meeting of the 15-member operating committee to review progress.

“Charlie would go around the table asking, ‘Why are you missing these dates? Why are we falling behind?’” said one member of his senior team.

He relentlessly demanded that lagging executives return the following week with a plan to course-correct — and those who couldn’t keep up didn’t last long.

The task of saving the institution seemed almost insurmountable. Investors large and small doubted its prospects.

Warren Buffett, whose Berkshire Hathaway had been a major Wells Fargo investor for two decades, slammed previous management for “ignoring the sales fiasco when they found out about it” and dumped his entire stake.

From February 2018 to December 2020, Wells Fargo’s share price dropped by two-thirds, cutting its market capitalization from $322 billion to $88 billion.

Calls in Congress for a breakup grew louder: Sen. Elizabeth Warren (D-Mass.) demanded the bank split into smaller units, and Sen. Sherrod Brown (D-Ohio) denounced Wells as “too big to manage.” Yet persistence paid off.

The 173-year-old bank slowly but surely regained customer trust — proving that Scharf and his team were light-years removed from the former management that presided over the scandal.