What happened
The stock market was having a pretty strong day on Tuesday, with the Dow Jones Industrial Average and S&P 500 higher by 1% and 0.6%, respectively.
Wells Fargo (NYSE: WFC) it stood out, with shares higher by 6% as of 2:30 pm EDT. And the reason was not because of the gains like many other stock movements we are seeing today. Rather, Wells Fargo made a major change to its management team.
Image source: Wells Fargo.
And that
The great news with Wells Fargo today is that Chief Financial Officer John Shrewsberry is retiring this fall and will be replaced by former Bank of New York Mellon (NYSE: BK) CFO Mike Santomassimo.
Simply put, Shrewsberry represents the last major piece of the Wells Fargo executive team that was in charge during the infamous fake account scandal and the numerous other scandals that have plagued Wells Fargo in recent years.
Finding ways to cut expenses is a top priority for new CEO Charlie Scharf, and Santomassimo has an excellent record of doing exactly that at BNY Mellon (where Scharf was previously CEO). Scharf has said that Wells Fargo needs to cut some $ 10 billion in annual expenses to compete with other big banks, and this move could be a step in the right direction.
Now what
Wells Fargo is likely to be one of the big banks most affected by the COVID-19 pandemic, as it is primarily focused on the commercial side of the business and is quite susceptible to credit losses in bad economies. Thus, the introduction of a CFO that has been successful with cost-cutting initiatives and the completion of the Wells Fargo scandal-era management team review appear to be giving investors renewed hope for the future.
