John Stumpf, chairman and chief executive officer of American banking giant Wells Fargo, has decided to step down in the wake of a sales scandal involving millions of fake bank accounts, according to a company statement, reports Xinhua.
Stumpf has told the company's Board of Directors that he is retiring from the company and the Board, and his departure is effective immediately, the bank said in the statement released on Wednesday.
"He believes new leadership at this time is appropriate to guide Wells Fargo through its current challenges and take the company forward," said the company's lead director Stephen Sanger, who will serve as the board's non-executive chairman.
Stumpf's move came as San Francisco, California-based Wells Fargo has been under intense scrutiny since early September, when regulators fined the bank 185 million US dollars for the opening of over 2 million bank accounts and credit card accounts by its employees without customers' permission between May 2011 and July 2015.
The employees were allegedly doing so in order to meet sales goals.
Under pressure of national anger, Wells Fargo expressed regret and accepted "full responsibility for all unethical sales practices." It also announced ending the controversial sales goals programme imposed on employees.
Being investigated by the Federal Bureau of Investigation, federal prosecutors as well as Congress, the 164-year-old bank has been struggling to save its reputation. Stumpf, who has successfully led Wells Fargo through 2008 financial crisis, faced questions twice in front of Congress.
In addition, the government of California is punishing the bank by suspending business relationship with it for one year.
Tim Sloan, who is Wells Fargo's president and chief operating officer and will succeed Stumpf as CEO, said in a statement that "his immediate and highest priority is to restore trust" in Wells Fargo at a critical juncture in its history.
The company's officials told media that Stumpf, who has served Wells Fargo for 34 years, will not receive severance packages. The company said in late September that Stumpf had agreed to give up his unvested equity awards valued at 41 million dollars.