Wells Fargo CEO Charlie Scharf apologized Wednesday for a remark he made in June about the talent pool of senior Black banking executives that set off a wave of criticism when the quote resurfaced Tuesday.
On June 16, as the country was engulfed in protests over the police killing of George Floyd in Minneapolis, Scharf sent a memo to the bank's roughly 250,000 employees outlining a set of changes that he said would help improve the firm's diversity.
If executives like Scharf didn't meet new goals to hire a diverse workforce, their pay would be docked. It was one of the first major financial institutions to institute the policy, one that advocates for diversity in corporate America have pushed for years.
In the second bullet of the third line-item of the memo, Scharf made a remark about the issues he said the bank had seen in hiring Black leaders to the bank's operating committee, a group of senior leaders that steer the bank's direction.
While he wanted more diversity on this committee, Scharf said "while it might sound like an excuse, the unfortunate reality is that there is a very limited pool of Black talent to recruit from with this specific experience as our industry does not have enough diversity in most senior roles."
After a Tuesday story from Reuters about the remark and another like it that Reuters said Scharf made, the Wells Fargo chief apologized for the remark Wednesday in another companywide message.
"I apologize for making an insensitive comment reflecting my own unconscious bias," Scharf said, more than three months after he sent the first memo.
He emphasized the work he said the bank has done to improve its diversity, including hiring Black senior executives, and requiring diverse candidates to be considered for jobs that pay more than $100,000 a year.
Twitter comes in
The apology came after the bank was ridiculed on Twitter for the remark, much of it sparked by a tweet from NBC News, which was re-posting the Reuters story but didn't make it clear that the "Black talent" comment was about the corps of most-senior executives in banking.
The tweet was retweeted more than 22,000 times, including by Rep. Alexandria Ocasio-Cortez and Michael Steele, the former Republican National Committee chairman.
The dearth of senior-level Black executives in finance has been a major point of contention in the industry, with debate ongoing as to why it has persisted, and at some banks like Wells Fargo, has grown. From 2015 to 2018, the% of Black people in senior roles at Wells Fargo fell from 8% to 4.1%.
Some point to alleged discrimination (Wells Fargo settled a federal hiring discrimination charge for $7.8 million last month), while others have pointed toward the high demand for Black executives outside of finance. Leaving a bank for an executive job outside of the industry can offer diverse talent in banking a faster and more certain path up the ladder.
Since Scharf started last October, he often has hired a certain type of executive: A white man, with a connection to Scharf or JPMorgan Chase, his former employer, who lives in New York. Those include:
Steven Black, a Wells Fargo board member picked by Scharf
Bill Daley, the bank's vice chairman of public affairs
Scott Powell, chief operating officer
David Owen, chief administrative officer
Mike Santomassimo, incoming chief financial officer
Barry Sommers, head of wealth management
Michael Weinbach, head of consumer lending
The hires have rankled many in the company, who thought that many of those positions _ all outside hires _ could've been filled by a candidate of color, according to three Wells Fargo executives familiar with the matter, who were not authorized to speak publicly. Bank executives in CFO and COO roles often become CEOs.
When Scharf sent out the memo in June, the bank did not have a Black person on the bank's operating committee. The bank has since added two Black members: Lester Owens, head of operations, and Ather Williams, the head of strategy, digital and innovation.
