WHEN: TODAY, MONDAY, April 10, 2017
WHERE: CNBC'S "CLOSING BELL"
Following is the unofficial transcript of a FIRST ON CNBC interview with Wells Fargo CEO Tim Sloan today, Monday, April 10 on CNBC's "Closing Bell."
All references must be sourced to CNBC.
KELLY EVANS: AND JOINING US NOW BY PHONE IN A FIRST ON CNBC INTERVIEW IS WELLS FARGO CEO TIM SLOAN ALONG WITH OUR WILFRED FROST. WELCOME TO YOU, BOTH.
TIM SLOAN: THANKS KELLY
WILFRED FROST: GOOD AFTERNOON TO YOU TIM THANK YOU FOR JOINING US.
SLOAN: YOU'RE WELCOME.
FROST: JUMPING INTO THIS. THE REPORT WAS VERY CLEAR, CARRIE TOLSTEDT'S FAILINGS TERMINATING HER FOR CAUSE IT WAS ALSO , AND CRITICAL OF BOTH JOHN STUMPF AND THE BOARD FOR FAILING TO NOTICE THOSE FAILINGS SOONER ONCE YOU TOOK OVER, THOUGH, AS PRESIDENT AND COO AS STEVE SANGER SAID, YOU ENDED HER EMPLOYMENT FAIRLY QUICKLY. WHAT DID YOU NOTICE AND SPOT THAT OTHERS MISSED?
SLOAN: WELL, WILFRED THAT'S A GREAT QUESTION. I THINK THAT ONCE I BECAME PRESIDENT AND CHIEF OPERATING OFFICER IN NOVEMBER 2015, I SAT DOWN AND MADE A FRESH ASSESSMENT OF CARRIE. I WORKED WITH HER ON SOME THINGS I ASKED HER TO IMPROVE ON, WE CAME TO THE CONCLUSION WITHIN A FEW MONTHS IT MADE SENSE FOR HER TO MOVE ON, AND WHAT I SAW WAS AN EXECUTIVE THAT WHILE HAVING A SUCCESSFUL CAREER HAD SOME CHALLENGES IN TERMS OF WORKING WITH OTHERS, HAD NOT DEALT AS AGGRESSIVELY WITH SOME OF THE SALES PRACTICE ISSUES AS SHE SHOULD HAVE, AND AS I LOOKED FORWARD IN TERMS OF WHERE WE WERE TAKING OUR RETAIL BUSINESS, IT JUST MADE SENSE TO MAKE A CHANGE, AND I COULDN'T BE MORE PLEASED WITH MARY MACK, THE NEW LEADER OF COMMUNITY BANKING, SHE'S DOING A TERRIFIC JOB.
FROST: WHAT ABOUT PRE-COO WHEN YOU WERE CFO AND OTHER IMPORTANT HIGHER ROLES WITHIN THE BANK. COULD YOU HAVE BEEN MORE PROACTIVE WITH HELPING TO SORT OUT THE SALES PRACTICE SCANDAL EVEN IF IT WAS NOT DIRECTLY YOUR RESPONSIBILITY?
SLOAN: VERY FAIR QUESTION. I'VE BEEN VERY CLEAR SINCE I STEPPED INTO THIS CEO ROLE THAT WHEN I LOOK BACK I SHOULD HAVE AND COULD HAVE DONE SOME THINGS DIFFERENTLY. ONCE THE ISSUES MADE ITS WAY TO THE CORPORATE LEADERSHIP LEVEL, AND IN HINDSIGHT, I WISH WE WOULD HAVE MOVED MORE QUICKLY. WE WOULD HAVE MADE DECISIONS, FOR EXAMPLE, THAT WE MADE LAST FALL, WHICH WAS TO END THE INCENTIVE COMPENSATION PLAN IN THE COMMUNITY BANK, SO, GOSH, YOU KNOW, YOU LOOK BACK AND HINDSIGHT'S A GREAT THING. ARE THERE THINGS YOU SHOULD DO DIFFERENTLY ABSOLUTELY. I'M REALLY FOCUSED NOW ON BEING THE CEO OF WELLS FARGO AND MOVING FORWARD AND IMPLEMENTING ALL THE CHANGES WE'VE MADE AND REBUILDING TRUST WITH THE SHAREHOLDERS.
FROST: TIM, I WANT TO READ BACK AN E-MAIL TO YOU SENT TO YOU BY JOHN STUMPF, THE THEN CEO, ON MAY THE 17th, 2015, JUST AFTER THE FILING OF THE LOS ANGELES ATTORNEY LAWSUIT AGAINST WELLS FARGO. BEAR WITH ME FOR THIS.
SLOAN: SURE.
FROST: JOHN STUMPF, EMAILING TO YOU SAYING, I HAVE WORKED OVER THE WEEKEND WITH CARRIE ON THE LA ISSUE, I REALLY FEEL FOR CARRIE AND HER TEAM, WE DO SUCH A GOOD JOB IN THIS AREA. I'LL FIGHT THIS ONE TO THE FINISH. DO YOU KNOW ONLY AROUND 1% OF THE PEOPLE LOSE JOBS FOR GAMING THE SYSTEM, AND TWO-THIRDS OF THOSE ARE FOR GAMING OR MONITORING THE SYSTEM, IE CHANGING PHONE NUMBERS, ET CETERA, NOTHING COULD BE FURTHER FROM THE TRUTH ON FORCING PRODUCTS ON CUSTOMERS. IN ANY CASE, RIGHT WILL WIN, AND WE ARE RIGHT. DID SOME DO THINGS WRONG? YOU BET, BUT THAT'S CALLED LIFE. THIS IS NOT SYSTEMIC. THAT WAS AN E-MAIL JOHN STUMPF SENT TO YOU IN MAY 2017. AT THAT MOMENT -- SORRY, 2015, EXCUSE ME. AT THAT MOMENT IN MAY 2015, DID YOU REALIZE IT WAS SYSTEMIC? WHAT ACTIONS DID YOU PERSONALLY TAKE IMMEDIATELY THEN, EVEN THOUGH YOU WERE NOT COO YET?
SLOAN: WELL, THAT WAS AFTER THE TIME PERIOD, WILFRED, THAT THE ISSUE HAD BEEN ELEVATED TO THE OPERATING COMMITTEE OF WHICH I WAS A MEMBER OF AT THAT TIME. I WAS HEAD OF THE WHOLESALE BANK, AND, AGAIN, I THINK AT THAT POINT, WE PUT CORPORATE RESOURCES ON IT. WE PUT A LOT MORE PEOPLE, A GROUP OF FOLKS FROM ACROSS THE COMPANY IN TRYING TO MAKE CHANGES, AND YOU COULD SEE IN ALL THE NUMBERS AND THE BOARD WAS ABLE TO DEMONSTRATE THAT IN THEIR INVESTIGATION, AND THAT THE STEPS THAT WE WERE TAKING WERE HAVING A POSITIVE IMPACT, BUT, AGAIN, I THINK IN HINDSIGHT, WE SHOULD HAVE MOVED FASTER. I HIGHLIGHT AGAIN THE FACT I WISH WE ENDED THE INCENTIVE COMPENSATION PLAN WE HAD IN THE COMMUNITY BANK. WE'VE DONE THAT. NOW IT'S ABOUT MOVING FORWARD. I MEAN, I'M SO EXCITED WITH THE FACT THAT IN OUR NEW INCENTIVE COMPENSATION PLAN, FOR EXAMPLE, WE'RE FOCUSED ON SERVICE, ADVICE, CUSTOMER SERVICE, HOW THE TEAM IS WORKING TOGETHER, HOW WE'RE GOING RELATIONSHIPS. THAT'S JUST ONE EXAMPLE OF THE MANY CHANGES THAT WE'RE MAKING AT THE COMPANY NOW THAT I'VE BECOME CEO.
EVANS: MR. SLOAN, DOES THIS ANNOUNCEMENT AND THESE CLAWBACKS INDICATE THAT THIS IS THE END OF THIS CHAPTER AS FAR AS YOU GUYS ARE CONCERNED AT WELLS FARGO? AND I ASK BECAUSE ELIZABETH WARREN ALSO JUST TWEETED THAT THE CLAWBACK IS A GOOD STEP, BUT AN INTERNAL INVESTIGATION IS NO SUBSTITUTE FOR A THOROUGH GOVERNMENT INVESTIGATION. WILL THERE BE ANYTHING FURTHER THAT YOU'RE AWARE OF INTO THIS MATTER, OR IS THIS AS FAR AS YOU GUYS ARE CONCERNED THE END OF IT?
SLOAN: WELL, THE BOARD WAS CLEAR IN ITS REPORT THAT THEIR INVESTIGATION IS OVER WITH. THERE ARE OTHER ACTIVITIES THAT ARE GOING ON IN TERMS OF AT THE JUSTICE DEPARTMENT, AND IN OTHER GOVERNMENT AGENCIES, AND WE'RE CONTINUING TO WORK WITH OUR REGULATORS, AND SO WE HAVE MUCH MORE WORK TO DO IN TERMS OF REBUILDING TRUST WITH ALL OF OUR STAKE HOLDERS, AND MAKING THINGS RIGHT WITH OUR CUSTOMERS. SO, NO, I DON'T THINK THIS IS A CHAPTER THAT'S OVER WITH. I THINK THAT WHAT HAPPENED TODAY WAS THE BOARD RELEASED ITS REPORT, WHICH IS A VERY COMPREHENSIVE REPORT, OF SOME OF THE ISSUES THAT OCCURRED AT THE COMPANY, MISTAKES THAT WE'VE MADE, AND MY JOB AS THE CEO IS TO FIX THEM AND MOVE FORWARD.
EVANS: AND THIS IS ALL HAPPENING AGAINST A BACKDROP THAT'S ALSO INFLUX. WHILE WE HAVE YOU, I JUST WANTED TO ASK BECAUSE IT'S BEEN REPORTED THAT GARY COHN, FORMER BANKING COLLEAGUE OF YOURS, JUST MEANING THAT HE WAS AT A COMPETITOR, GOLDMAN SACHS, IS REPORTEDLY INTERESTED IN REPEALING GLASS-STEAGALL. IS THAT SOMETHING THAT WOULD AFFECT YOUR BUSINESS DRAMATICALLY? DO YOU HAVE A VIEW ON THAT? ON THE WAY THE BANKING INDUSTRY MIGHT GO ONE WAY OR THE OTHER?
SLOAN: SURE, IT'S A FAIR QUESTION. AND THERE'S A LOT OF POTENTIAL CHANGE FROM A REGULATORY STANDPOINT THAT'S BEING DISCUSSED IN THE INDUSTRY. I THINK OUR PRIMARY FOCUS AS IT RELATES TO REGULATION IS TO MAKE SURE THAT WE HAVE THE RIGHT REGULATION, WHICH IS VERY FOCUSED ON OUR CUSTOMERS, SO THAT WE CAN PROVIDE THEM WITH THE RIGHT PRODUCTS AND SERVICES. WHAT GARY ACTUALLY MEANS IN TERMS OF REPEALING GLASS-STEAGALL, I DON'T KNOW FOR SURE. AT WELLS FARGO, OUR INVESTMENT BANKING OPERATION IS VERY INTEGRATED WITH HOW WE PROVIDE PRODUCTS AND SERVICES TO OUR CORPORATE BANKING CUSTOMERS, FOR EXAMPLE. AND I THINK WE DO A TERRIFIC JOB, WE'VE GOT A TERRIFIC TEAM WITHIN OUR INVESTMENT BANKING GROUP. I HOPE THAT'S NOT THE CASE BECAUSE I THINK INVESTMENT BANKING DONE RIGHT IS VERY BENEFICIAL TO OUR CUSTOMERS AS PART OF AN OVERALL RELATIONSHIP.
FROST: TIM, JUST WANT TO JUMP BACK IN AGAIN AND ON THE CALL EARLIER TODAY WITH THE MEDIA, YOU OUTLINED THAT YOU'VE HIRED BACK AROUND ABOUT A THOUSAND EMPLOYEES SINCE SEPTEMBER, MANY OF WHOM HAD LEFT RELATING TO THESE SALES CULTURE ISSUES. HAVE THOSE ROUND ABOUT THOUSAND EMPLOYEES, THEREFORE, BEEN MISTREATED BY THE BANK IN THE PAST IN ORDER FOR THEM TO NOW BE REHIRED?
SLOAN: YEAH WILFRED, IT'S A FAIR QUESTION. WE'VE ACTUALLY HIRED MANY MORE THAN A THOUSAND PEOPLE AT WELLS FARGO SINCE LAST FALL, BUT THE POINT I WAS MAKING THERE IS THAT IF THERE'S ANY FORMER TEAM MEMBER THAT WOULD LIKE TO COME BACK TO WELLS FARGO WHO MAY HAVE LEFT THE COMPANY BECAUSE THEY WERE UNCOMFORTABLE WITH THE SALES CULTURE IN OUR RETAIL BANK, WE'D LOVE TO HAVE THEM BACK. AND MANY OF THOSE IN THAT THOUSAND NUMBER WOULD FALL INTO THAT CATEGORY. IN THE FACT THAT THEY HAVE COME BACK TO THE COMPANY, I THINK, IS A TERRIFIC SIGN IN TERMS HOW OUTSIDE PARTIES ARE VIEWING THE CHANGES THAT WE'RE MAKING AT THE COMPANY FOR THE GOOD. IN FACT, IN ADDITION TO THAT, ANOTHER INTERESTING INDICATOR IS THE FACT THAT OUR RETENTION IS ACTUALLY INCREASING, PARTICULARLY IN OUR RETAIL BANK BECAUSE OUR TEAM MEMBERS ARE SAYING THEY LIKE ALL THE CHANGES THAT WE'VE MADE.
EVANS: TIM, THANK YOU FOR YOUR TIME AND FOR JOINING US TODAY. WELLS FARGOS CEO TIM SLOAN WITH OUR WILFRED FROST. WILF, THANKS FOR ALL THE WORK YOU HAVE BEEN DOING ON THIS ONE AS WELL.
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