Tim Sloan

Origin of Relationship

Tim Sloan became the CEO of Wells Fargo following the resignation of John Stumpf due to the massive fake accounts scandal. He was defended by Warren Buffett during the 2018 Annual Meeting.

Major Milestones

2016: Takes over as CEO of Wells Fargo amid the fake accounts scandal.
2018: Buffett publicly defends Sloan at the Annual Meeting, stating he is the right person to clean up the bank and that he inherited a massive problem caused by a flawed incentive structure.

Strategic Importance

Sloan's tenure and Buffett's defense of him illustrate Buffett's focus on identifying the true root cause of corporate failure: bad incentive structures. Buffett emphasized that the fault lay with the executives who designed the cross-selling quotas and ignored the subsequent bad behavior, rather than the person brought in to fix the resulting mess.

🔗 Connections

Company: Wells Fargo
Concepts: The Institutional Imperative
Sources: 2018 Meeting

📚 Historical Mentions & Citations (1)

Click a reference document below to expand and read the exact paragraph(s) containing this concept in the archive.

🎙️

2018 MeetingExcerpt Available

▼

In fact, almost every bank has - all the big banks have had troubles of one sort or another. And I see no reason why Wells Fargo as a company, from both an investment standpoint and a moral standpoint going forward, is in any way inferior to the other big banks with which it competes on It - they made a big mistake. It cost - I mean, we still got - I mean we have a large, unrealized gain in it, but that doesn’t have anything to do with our decision-making. But the I like it as an investment. I like Tim Sloan as a manager, you know, and he is correcting mistakes made by other people. I tried to correct mistakes at Salomon, and I had terrific help from Deryck Maughan as well as a number of the people at Munger, Tolles. And I mean, that is going to happen. You try to minimize it. Charlie says that, “An ounce of prevention isn’t worth a pound of cure, it’s worth about a ton of cure.” And we ought to jump on everything. He’s pushed me all my life to make sure that I attack unpleasant problems that surface.

View Source Digest →