Berkshire CEO Warren Buffett and vice chairman Charlie Munger responded to a question from the audience at their conglomerate’s annual shareholder meeting in Omaha, Nebraska.
“It looks to me like Wells made some big mistakes,” Buffett said when asked about Wells Fargo’s various troubles.
“They incentivized the wrong behavior,” he added.
Munger then added that he wished Sloan, who left his post at Wells Fargo in late March, “was still there.”
They also attempted to group Wells Fargo with other financial institutions that have seen their own share of scandals.
Berkshire Hathaway owns just over 9% of Wells Fargo’s shares, making the Buffett-led conglomerate the bank’s single largest shareholder after investment giants Vanguard and BlackRock.
Wells Fargo has been rocked by a fake-accounts scandal in recent years that saw the departure of not only Sloan, but of former CEO John Stumpf in 2016. The bank opened around 2 million checking and credit accounts without customer’s knowledge, and later found 1.4 million more falsified accounts than were originally discovered.
“Wells has become ‘exhibit one,'” Buffett said, but added “there’s quite a list of banks where people behave badly.”
He said that when there is a problem, and “you’re in the top job, you have to take action fast.”
Buffett said more generally, and appearing not to imply Sloan, that bank CEOs who behave badly should get hit with harsher punishment. Banks’ top leaders who behave badly should have their net worth, and the net worth of their spouses, taken away said Buffett.
Wells Fargo announced in a statement on March 28 that Sloan would retire, and installed former general counsel Allen Parker as interim CEO and president.
The decision came shortly after Buffett voiced his support for Sloan in comments to CNBC that same day. The investor later told the network that he knew Sloan’s resignation plans in advance.
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