The latest hire to Wells Fargo & Co.’s executive management team, chief operating officer Scott Powell, represents another example of the bank expanding its Northeast presence as part of its corporate restructuring.
Powell, 57, takes over as COO on Monday. He most recently served as chief executive of Santander Holdings USA Inc. and Santander Consumer USA Holdings Inc.
Powell will report to Charlie Scharf, who took over as chief executive and president of the bank Oct. 21 after serving in those roles for Bank of New York Mellon.
Like Scharf, Powell will be based in New York City, and not at Wells Fargo’s San Francisco headquarters.
Scharf told analysts in October he plans to spend little time in the New York office, saying “I am looking forward to be present in all of our key operations.”
Scharf said Powell’s “tremendous experience, proven track record and unquestioned integrity will make him a great addition to our management team.”
Powell will oversee regulatory execution and relations, enterprise shared services and other operational functions.
Those areas are among the biggest challenges facing Wells Fargo as it attempts to resolve its fraudulent customer account scandal that erupted in September 2016.
On Sept. 1, 2017, Wells Fargo confirmed that at least 3.53 million checking and credit-card accounts were affected by the scandal.
The scandal and the bank’s overall sales practices have been investigated by the U.S. Consumer Bureau of Financial Protection, U.S. Justice Department, U.S. Securities and Exchanges Commission, U.S. Labor Department, various state attorneys general and Congress.
Wells Fargo has agreed to pay more than $4 billion to date to settle various regulatory disputes since the fall of 2016.
The biggest shadow hanging over Wells Fargo is the Federal Reserve’s order, issued Feb. 3, 2018, that does not allow the bank to increase its total assets beyond the $1.93 trillion it had on Dec. 31, 2017.
Former Chief Executive Timothy Sloan said on Jan. 15 that the cap will remain in place through at least the end of 2019.
Scharf said that Powell is “the ideal person to take on this new position as we seek to transform Wells Fargo so that high-quality execution, clear accountability and operational excellence become unquestioned components of our culture.”
Prior to Santander, Powell held a number of senior roles at JPMorgan Chase & Co., including head of consumer banking, lending operations and consumer risk management. He also was the chief executive of consumer lending at Bank One, and spent 14 years at Citigroup in various risk-management roles.
“I am truly excited about the opportunity to join Wells Fargo and take on this new role during a critical period in Wells Fargo’s history,” Powell said.
“I recognize that expectations are high, and that we have significant work ahead of us. By working together and holding each other accountable, I’m confident that we will meet those expectations,” he said.
Wells Fargo said in a regulatory filing Monday that Powell’s starting base salary will be $1.75 million a year, making him among the four highest-paid executives.
However, Powell is taking a salary cut from the $2.98 million he made at Santander in 2018. His total 2018 compensation there was $6.93 million.
By comparison, Scharf doubled his salary, going from $1.25 million a year at Bank of New York Mellon to $2.5 million a year at Wells Fargo, plus he is eligible for a bonus of up to 300% of his salary with a target goal of 200%. He will receive a $5 million bonus in March.
Powell will be eligible for bonus compensation of up to 150% of his base salary with an expectation of achieving 100%.
He will receive a $3.2 million signing bonus in advance of being on the job a full year but would be required to pay it back in full if he leaves before completing a year as COO.
The bank said a “reasonable expectation” is $5.5 million in incentive pay for fiscal 2020. Powell also would receive a one-time equity award worth $7.5 million in restricted stock rights.
Wells Fargo has about 2,900 local employees, as well as 3,600 in its 32-county Triad West region and 25,100 in Charlotte.