Banking analyst Mike Mayo of CLSA said in a note to investors Monday that his firm's support of Wells Fargo Chairman and CEO John Stumpf "is now wavering," in the wake of the fallout from the $185 million secret account settlement.
Stumpf's actions so far — covering his initial response through last week's hearing before the Senate Banking Committee — have been "reactionary versus leading," Mayo wrote.
Executive pay "clawbacks should be put in place," the analyst added. "We believe Wells Fargo is bigger than the CEO, notwithstanding a good financial track record during his tenure, and there should be no more excuses."
Stumpf would stand to walk from the bank with $123.6 million in severance and stock value if he were to retire, according to an analysis by USA Today. The CEO has said he does not plan to step down.
Mayo cited five issues that Wells Fargo needs to address, including what the bank is doing to "help impacted customers" and to reassure investors that "these problems are resolved."
Wells Fargo agreed to the massive settlement earlier this month with regulators over charges employees boosted their sales targets and bonuses by opening accounts for unsuspecting customers. About 5,300 employees were fired in connection with the practices.
"Our support for the CEO is now wavering," Mayo said, "and contingent on his ability to better detail repercussions to top management and contain reputational damage from the cross-selling fiasco."
Wells Fargo declined to comment on Mayo's note.
The House Financial Services Committee plans to hold a hearing on the Wells Fargo mess Thursday. Stumpf has been invited to testify.
"I don't think it's going to be much better for them in front of the House as it was in the Senate last week," bank analyst Paul Miller of FBR Capital Markets told CNBC on Monday. "Hopefully Stumpf is better prepared going into this."
Last week, senators fired questions at Stumpf, centering on why the bank allowed the problems to fester for years before taking action, and called for clawbacks.
Many questions were about Carrie Tolstedt, the Wells Fargo executive in charge of the unit where employees opened as many as 2 million unauthorized customer accounts. She is retiring at the end of the year, according to a bank announcement in July.
Over the course of her career at the bank, Tolstedt accumulated stock and options of $95 million, based on when the stock was trading at around $49 per share, according to a Wells Fargo proxy statement.
"I think [the Wells mess] does have an impact on the stock price. And it's going to continue to have an impact on the stock price until the board makes some type of action here," Miller said on "Squawk on the Street."
Shares of Wells Fargo have fallen nearly 10 percent since the settlement announcement Sept. 8.
"I think it's going to get worse before it gets better," he added.
Miller said investors and regulators want a change in leadership at the top. "They want to turn that page. But as long as Stumpf is there, it's hard."