Wells Fargo CEO John Stumpf 'Completely Unprepared' | Squawk Box | CNBC — Transcript

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1. 0:00yesterday it was it was extraordinary
2. 0:02theater political theater uh uh
3. 0:04governance drama and public uh you know
4. 0:07safety uh you know Financial wealth
5. 0:10concerns all wrapped up at once you were
6. 0:12talking about just earlier on the show
7. 0:14how your choice of Music reveals
8. 0:16something about your character if we
9. 0:18were to uh to take a look at what they
10. 0:19did yesterday and consider the the music
11. 0:22for Music Man Ronnie Howard singing the
12. 0:24song the Wells Fargo man man is coming
13. 0:26down the street I wonder what he was
14. 0:27coming for you wonder what he what he
15. 0:29was coming for uh is uh uh he went in
16. 0:33there completely unprepared he had a
17. 0:35flack drafted public relations script
18. 0:38that he read off of that that was
19. 0:40contrite and seemed authentic and then
20. 0:42was melted uh in the easiest of
21. 0:45questions that came his way questions
22. 0:47that should have been anticipated uh
23. 0:49when did he know what did he know when
24. 0:50who knew what when uh he wasn't prepared
25. 0:53toh to deal with the um uh of course the
26. 0:57the the clawback issues and managed to
27. 1:00unify this highly fractious committee it
28. 1:02wasn't just the Democrats the
29. 1:03Republicans just as harsh hey Jeff
30. 1:06explain this though to us cuz it's a it
31. 1:08is a true governance issue he deferred
32. 1:10often times in his answer and suggested
33. 1:12that it really is the board it was the
34. 1:13board's call on his compensation it was
35. 1:16the board's call on whether to fire
36. 1:18people perhaps it was the board's call
37. 1:20on clawbacks Etc uh that is true to some
38. 1:23degree but how much responsibility do
39. 1:26you hold to the board meaning to say the
40. 1:28board should have taken some action
41. 1:29ahead of a hearing like that or do the
42. 1:31board say look we got to hear everything
43. 1:33we want to see where all the chips fall
44. 1:36Because by the end of this year they may
45. 1:37fall farther than we know and we need to
46. 1:40make a decision based on that there's a
47. 1:43lot of accountability to throw around of
48. 1:44course you can add to the equation where
49. 1:46were all the hundreds of regulators
50. 1:48embedded in there from the consumer U uh
51. 1:50uh Financial Protection Bureau FDIC and
52. 1:53the Federal Reserve what were all those
53. 1:55hundreds of people doing but yes it's
54. 1:57it's largely a management failure of
55. 1:58management oversight ridiculous
56. 2:00incentive scheme that also didn't Jeff
57. 2:03my question is is John stump assuming
58. 2:05the the board is involved in this is
59. 2:06John stump supposed to go to the board
60. 2:07and say look I'm going to go to this
61. 2:09hearing and they are going to slaughter
62. 2:11me and I need in advance of that we need
63. 2:14to make some some decisions so we can
64. 2:16say certain things maybe I should maybe
65. 2:18you should uh you know say that I'm
66. 2:21going to get zero bonus this year or I'm
67. 2:22going to get zero compensation this year
68. 2:24or whatever it's going to be you're
69. 2:25going to claw back all the bonuses that
70. 2:27I have made yes if you take a look at
71. 2:29what you know people were looking is
72. 2:31that on him or is that the board or how
73. 2:32do you look at that as a governance
74. 2:34issue it this is this is him this is
75. 2:37somebody uh was like Ken Lewis the Bank
76. 2:39of America uh blaming Regulators for
77. 2:41what he did the devil made him do it in
78. 2:43this case he's he was deferring throwing
79. 2:45the board under the bus I know for fact
80. 2:47I know for fact that the board was
81. 2:49stunned by a lot of that testimony
82. 2:51yesterday uh there there's some of the
83. 2:53complexity of this they didn't
84. 2:54appreciate till yesterday they surely U
85. 2:57uh they they should have created an
86. 2:59independent inves what Jamie Diamond did
87. 3:01at bank JP Morgan C and done very well
88. 3:03of course with Mary bar at GM uh here
89. 3:06he's just blinking in the headlights uh
90. 3:08spotlights unprepared je Jeff can I be
91. 3:10it's Brian can I be more direct if you
92. 3:11were the chairman of of Wells Fargo
93. 3:13board would you fire John
94. 3:16stump he certainly should be put on
95. 3:18probation I don't think he'd be shot at
96. 3:19sunset uh there should be CL Jamie gave
97. 3:21up money people when they've gotten in
98. 3:23trouble there should be symbolically uh
99. 3:25some punishment not just the you know
100. 3:275,300 people making1 an hour and this
101. 3:30guy's making $19 million and of course
102. 3:33this head of the of the division who was
103. 3:35perhaps skate cated we don't know what
104. 3:37her accountability was but she leaves
105. 3:38with 125 million bonuses who is the
106. 3:41constituency that we care about is this
107. 3:43is does he now whatever credit has he
108. 3:46lost credibility with the investor
109. 3:47Community Because by the way the stock
110. 3:49is the stock has fallen clearly lost
111. 3:51some value but now some people are
112. 3:53picking it up thinking it's a a good
113. 3:55value all of a sudden so you maybe they
114. 3:57they took they took about a hit of 10%
115. 3:59going into this so the fact that
116. 4:01yesterday was was marginally up I don't
117. 4:03think she give a lot of cheer uh there's
118. 4:05still a little bit of trauma out there
119. 4:06the board should have been hands on if
120. 4:08you if you're on the board of the Home
121. 4:09Depot you have to be a mystery shopper
122. 4:11for seven uh at seven stores a quarter
123. 4:13outside of your home state uh UPS they
124. 4:16meet uh you know folding tables the
125. 4:17board and sorting hubs they needed to
126. 4:19have more direct access to employees not
127. 4:21have information filtered through them
128. 4:22however throwing this to the board was
129. 4:24ridiculous he should have anticipated
130. 4:26the clawback issue under SAR Bain Oxley
131. 4:28section 304
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