© Reuters. FILE PHOTO: Wells Fargo CEO Tim Sloan testifies before a House Financial Services Committee hearing titled: “Holding Megabanks Accountable: An Examination of Wells Fargo’s Pattern of Consumer Abuses” in Washington, U.S. March 12, 2019. REUTERS/Erin Scott/
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By Daniel Wiessner
(Reuters) – Former Wells Fargo & Co CEO Tim Sloan filed a lawsuit on Friday accusing the bank of failing to pay him more than $34 million after he resigned in 2019 amid a wide-ranging sales practices scandal.
Sloan in the lawsuit filed in California state court says Wells Fargo canceled stock awards and withheld a bonus he had earned before stepping down.
Wells Fargo in a statement said that “compensation decisions are based on performance, and we stand by our decisions in this matter.”
Sloan led Wells Fargo from 2016 to 2019, when he became the second chief executive to step down over claims that the bank had opened millions of unauthorized consumer accounts.
Wells Fargo in 2020 agreed to pay $3 billion to resolve criminal and civil probes into the claims, and another $1 billion earlier this year in a lawsuit by shareholders. The bank admitted that between 2002 and 2016 it pressured employees to meet unrealistic sales goals that led them to open fake accounts.
The scandal drew scrutiny from shareholders and government officials and led the Federal Reserve in 2018 to order Wells Fargo to keep its assets below $1.95 trillion until it had improved its governance and risk controls. That cap is still in place.
In Friday’s lawsuit, Sloan said he was not responsible for the scandal, which began shortly before he took over as CEO, but was made a scapegoat by its board of directors and forced to resign.
“To this day, Wells Fargo has failed to identify anything Mr. Sloan did or failed to do that would justify its decision,” Sloan’s lawyers wrote in the complaint.
At the time he resigned, Sloan had said that he decided to leave because the focus on him had become a distraction inhibiting the bank from moving forward.
Sloan accused Wells Fargo of breach of contract and, along with the $34 million, is seeking unspecified damages for emotional distress and punitive damages.
Sloan’s San Francisco-based lawyer, David Lowe, has brought a number of high-profile employment lawsuits in recent years, including a series of sexual harassment cases by female Tesla (NASDAQ:) Inc employees.
He also represented former Pinterest (NYSE:) COO Francoise Brougher in a lawsuit claiming she was fired for complaining about sex discrimination at the company. Pinterest, which denied wrongdoing, settled the case for $22.5 million in 2020.
