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Wells Fargo CEO Racial Comments Upset Many, Lead To Apology

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Wells Fargo CEO Racial Comments Upset Many, Lead To Apology

The CEO of one of the country's largest banks has caused a stir with his comments on racial diversity at the bank.

What Happened: Earlier this summer, Wells Fargo & Company (NYSE: WFC) CEO Charlie Scharf upset several employees with his comments on a lack of diversity for employees and executives.

“While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from,” Scharf said, according to Reuters.

On Wednesday, Scharf issued an apology.

“There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise," he said.

Why It’s Important: Wells Fargo is still trying to recover from its fake accounts scandal.

Scharf was hired in September 2019 after leading Bank of New York Mellon Corp (NYSE: BC) and having over 24 years of experience in the financial industry.

Analysts liked the Scharf hire and his focus on moving past the scandal. Scharf said when he was hired, cleaning up the regulatory issues were his top priority.

Scharf’s comments led to the bank trending on Google Trends and Twitter for negative reasons. The comments also caught the eye of U.S. Democratic House of Representatives member Alexandria Ocasio-Cortez.

“Perhaps it’s the CEO of Wells Fargo who lacks the talent to recruit Black workers,” said Ocasio-Cortez.

Some took to Twitter to announce they would be switching banks or to encourage Wells Fargo customers to leave the bank.

Others shared past discrimination lawsuits against Wells Fargo due to hiring practices and higher loan rates given to minority borrowers.

What’s Next: Wells Fargo had previously pledged to double the number of black leaders over five years. Executive compensation is also tied to reaching diversity goals.

African Americans represented 10% of new director appointments for Fortune 500 companies last year. African Americans make up around 13% of the United States population.

Shares are down 1% Wednesday to $23.40. The stock has fallen close to 50% since Scharf was announced as new CEO.

 

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