Wells Fargo announces a $30,000,000,000
Company Stock Buyback and the stock falls 5 points in less than one month?
Why? Because the shareholders don’t trust this leadership team any more than employees, regulators and customers do.
An offer to buyback 20% of outstanding shares can’t even dupe investors back in.
(I liken it to a partner who is caught cheating. They will do whatever it takes to draw you back in - say all the right words, buy expensive gifts, give you access to their [first] phone - but you can tell they are still at heart ….a cheater.)
Since our reputation is that of a corporate recidivist and our largest fines were for consumer protection related offenses: common sense dictates that our new leadership team’s 1 goal should have been to rebuild the bank in to a trusted well-managed financial institution with honorable leaders who get that their job is to serve and protect US customers.
Instead, Charlie’s comes in like a wrecking ball and throw the bank in to chaos. (This isn’t JC Penny. This is a top 5 bank.) His top (and seemingly only) priority is cost-cutting, which he carry’s out with the same high- pressure methods as Stumpf with the cross-selling. He slashes the dividend by 80%. He hires Yes-Men who won’t question him. He lays off employees with valuable institutional knowledge. He sells off and/or shrinks profitable business lines. He offshores jobs to third- world countries where employees have no knowledge of US Banking laws and will never raise a hand. He destroys teams. He destroys trust. He destroys morale. He reduces and d-mbs- down services to our clients. He stops any meaningful communication with employees. He won’t answer crucial questions about the slow progress on the Federal Asset Cap. Charlie is yet another CEO who is pursuing short term profits over the long term health of the bank.
Investors are showing Charlie and the Board that they have taken the wrong path. A team who disrespects their own employees, disregards their own customers, doesn’t respect the country whose citizens they serve and does not demonstrate values and vision rings hollow.
Charlie and the Board don’t get it, but shareholders do.