Wells Fargo CEO Charles Scharf sends a memo saying the bank will begin tying executive pay — specifically of operating committee members — to their success in meeting diversity goals.
After mentioning goals of doubling the overall number of Black leaders within five years and adding more Black employees to the operating committee, Scharf writes: “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. Our progress will not be a straight line given the experience required in some of our roles.”
Scharf holds a 90-minute Zoom meeting with employees and repeats the statement about a lack of talent.
Reuters publishes a story about the Zoom meeting and the memo and describes some Black attendees as “exasperated,” while some people were “incredibly surprised” at Scharf’s sincerity.
Rep. Alexandria Ocasio-Cortez (D-NY) tweets her displeasure with the story: “Perhaps it’s the CEO of Wells Fargo who lacks the talent to recruit Black workers.”
Political analyst Donna Brazile also tweets a critique, saying in part: “If you look inside your box, you can’t see outside the windows.”
As the day passes, the critiques grow harsher. Comedian D.L. Hughley tweets that; “The CEO of #WellsFargo says there’s no diversity because there’s a very limited pool of Black talent to draw from! However, there’s an unlimited pool of Black people to steal from!”
And Amanda Fischer, policy director at the Washington Center for Equitable Growth, calls out Scharf’s personal history: “The CEO of Wells Fargo complains there’s just not enough Black talent worth hiring. This is how the guy got his start in banking — by his family sending his résumé to Jamie Dimon fresh out of college.”
That same day, Wells Fargo’s Twitter account tweets Scharf’s first reply. He apologized that his comment had been misinterpreted and pointed out that “the financial industry and our company do not reflect the diversity of our population.”
Scharf posts a separate, longer explanation and apology on the bank’s website stating, “I apologize for making an insensitive comment reflecting my own unconscious bias.”
He also mentions several specific measures the bank will undertake and implies the fault is the bank’s, not a limited pool of candidates.
“It’s clear to me that, across the industry, we have not done enough to improve diversity, especially at senior leadership levels. And there is no question Wells Fargo has to make meaningful progress to increase diverse representation. As I said in June, I have committed that this time must be different.”
Given Wells Fargo’s troubled recent past, the bank’s (and Scharf’s) crisis comms radar should have detected and prevented this misstep.
1. Scharf’s error happened while he was announcing significant DE&I measures. But good actions — never mind intentions — count for little when the accompanying words are deemed offensive.
2. The public doesn’t tend to have much sympathy for financial institutions to begin with, but regardless of the specifics, blaming the victim is never the right thing to do.