Billionaire investor Warren Buffet thinks the CEO of a failing bank should be held financially responsible.
“If a bank gets to where it needs government assistance, the responsible CEO should lose his net worth and his spouse’s net worth,” Buffett said Saturday. Instead, shareholders end up paying.
His comments came at his company Berkshire Hathaway’s shareholders meeting at the CHI Health Center in Omaha, Neb., where a shareholder asked about Wells Fargo, reported CNBC. Shares of the bank haven’t recovered from a 2016 scandal over fake customer accounts that led the Federal Reserve to fine Wells Fargo $185 million as well as force it to replace four members of its board of directors.
The scandal led to the the departure of then-CEO John Stumpf, but the Federal Reserve barred the bank in 2018 from expanding its total assets beyond the amount held at the end of 2017 until it resolves the regulator’s oversight concerns.
“It looks to me like Wells made some big mistakes,” said Buffett. “They incentivized the wrong behavior. I’ve seen that in a lot of places.”
Wells Fargo agreed to a $65 million settlement with the New York Attorney General’s Office last year over the scandal’s harm to investors, just part of the billions in settlements the bank and its insurers have agreed to with investors and the government since.
