Former Wells Fargo CEO, Timothy Sloan, has filed a lawsuit against the bank seeking $34 million in damages for alleged contractual violations related to his departure from the company in 2019 amidst a fake-account scandal. Sloan claims that Wells Fargo used him as a scapegoat, despite his lack of involvement in the sale-practice abuses, and disregarded his efforts to address regulatory demands.
A spokesperson for Wells Fargo responded to the lawsuit, stating that the bank stands by its decisions regarding Sloan’s pay, emphasizing that compensation is determined based on performance.
In 2020, Wells Fargo clawed back $15 million in pay from Sloan. Now, the former CEO has filed a civil complaint in San Francisco County Superior Court with the law firm Rudy, Exelrod, Zieft & Lowe LLP.
The lawsuit alleges that Wells Fargo unlawfully revoked a $14 million equity grant early in 2020 and withheld bonuses that were rightfully owed to Sloan. The complaint seeks damages totaling approximately $34 million, including a prorated bonus of $1 million, restricted share rights valued at $327,187, and performance stock awards for 2017 ($8.08 million), 2018 ($10.8 million), and 2019 ($13.57 million).
Sloan is also requesting interest on the amount owed and coverage of attorney fees.
Currently, Timothy Sloan holds a senior advisory position within the Fortress Credit Funds Business at Fortress Investment Group. He is actively involved in the firm’s investment committee and serves as a member of the credit leadership committee.
Despite this legal battle, Wells Fargo & Co. stock experienced a slight decline of 0.5% on Monday. In 2023, the stock has seen an 8.5% increase, while the S&P 500 has risen by 18.5%.
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