Finding a new CEO for a troubled company isn’t easy
One of the world’s biggest banks can’t seem to find anyone who wants to run it. The top job at Wells Fargo has been open for more than two months, ever since former CEO Tim Sloan resigned in March. He was the second chief executive to step down at the bank in less than three years.
Today, the Wall Street Journal reported that two of the top candidates for the job have dropped out of the hunt.
A lot of us would probably take the $15 million-plus salary that the CEO of Wells Fargo will likely draw. But Alex Thomson at executive search firm Odgers Berndtson says most of us probably aren’t right for the job.
“There are only a few people who can run a 260,000 employee, 70 million customer worldwide bank,” he said. “So finding that person, right from the get-go, is not easy.”
Those people are already making a lot of money in other jobs that don’t have the headaches that Wells Fargo does. Regulators have cracked down on the bank after employees created fake accounts and charged unnecessary fees. The past two CEOs have resigned after facing scathing questions from Congress.
This isn’t your typical executive search, according to Robin Ferracone at compensation consultancy Farient Advisors.
“I think they do have to offer a premium,” she said.
And if that doesn’t attract a CEO with a proven track record, Wells Fargo is going to need to turn to the second string, Farracone said.
“Somebody who may be one level below that, but has shown tremendous capability in terms of leading an organization and executing change,” she said.
There, troubled companies may find plenty of potential candidates, says Thomson at Odgers Berndtston.
“For some people, that’s the challenge,” he said. “Because if you do create shareholder value and end up as a success, you really have branded your career in a really positive way.”
The downside of picking a second-stringer is that it’s a big risk for a company that’s already in trouble. Wells Fargo declined to comment for this story.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
