Wells Fargo's incoming CEO, CharlesScharf. (Photo: Kyle Grillot/Bloomberg)

Plenty of advisors, investors, regulators, politicians, clientsand ex-clients have had their eyes on Wells Fargo, wondering who the bank wouldchoose as its CEO. Six months after then-CEO Tim Sloan resigned in the face of criticismfrom lawmakers and others, the bank announced that it tapped Bankof New York Mellon Chairman and CEO Charles Scharf to take thereins, effective Oct. 21.

The news comes about a month since a report of the bankallegedly imposing fees on clients months after they'd closedaccounts at the institution and three years since its fake-accountsscandal came to dominate headlines.

"It has been a long search," said Chip Roame, head of theconsultancy Tiburon Strategic Advisors. "It is possible that theboard may have gotten surprised by Tim Sloan's departure and wasflat-footed without a target-replacement list."

Now, the pressure is really on the new leader. "Scharf is goingto have a lot of people watching — regulators, Sen. ElizabethWarren, the media, customers, etc.," explained Roame.

In addition, Wells Fargo's asset growth has been restricted bythe Federal Reserve, as it navigates a series of consent orderstied to different regulatory and compliance matters.

"It [still] needs to rebuild credibility," according to Roame."Much of the cleanup was done under Sloan, but everyone will bewatching for continual issues under Scharf."

Big pay raise

Apparently Scharf requested a big bump in compensation to takeon the challenge. He is set to have a yearly salary of $23million, Bloomberg reported Friday — a 40% jump from his$16.5 million target pay in 2018 at BNY Mellon. Plus, he'll receive$26 million of Wells Fargo stock.

Wells Fargo shares rose 4% Friday, while BNY Mellon's sank4.5%.

Over the past two years under Scharf's leadership, BNY Mellon'sstock price has dropped 18.6%. Wells Fargo's has weakened 8.5% incomparison. Meanwhile, the S&P 500 improved 16% overthe two-year period, and the Financial Select Sector SPDR Fundmoved up 6.4%.

"It's interesting that JPMorgan Chase CEO Jamie Dimon recently …stated that the long delay [in Wells Fargo's naming of a permanentCEO] was unprofessional and then one of his former chiefs waschosen," said Roame.

Before Scharf's time at BNY Mellon, Scharf was CEO of Visa andearlier was CEO of Retail Financial Services for JPMorgan Chase fornine years.

While his resume includes retail banking, credit cards andsimilar sectors, "wealth and investment management do not appear tobe his strength … ," added Roame, "though I'm not sure what thatwill mean at Wells."

As of June 30, Wells Fargo Advisors included13,799 FAs and some $1.7 trillion in assets. That'sdown 29 from the prior quarter, 427 from the second quarter of 2018and 1,287 from Sept. 30, 2016, when news of some 1.5 million fakeaccounts and 500,000 credit cards in the Community Bank operationsspread.

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