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Wells Fargo Claws Back Millions More in Executive Pay Over Fake Accounts Scandal

Monday, April 10, 2017 6:23
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Wells Fargo & Co.’s (NYSE:WFC) board has clawed back a further US$75mln from its former chief executive and another top executive following a six-month investigation into the company’s retail banking sales practices.

The board took back an additional US$28mln from ex-boss John Stumpf for failing to act swiftly to contain alleged improper and unethical behaviour, including the creation of fake consumer accounts. Stumpf, who resigned in October 2016, has already given up US$41mln in compensation.

The bank has also cancelled US$47.3mln in additional stock options owed to Carrie Tolstedt, the former head of Wells’ community banks. Tolstedt quit in June and has already lost US$19mln in compensation.

Stumpf was first made aware of cases relating to the bank’s sales practice problems from as early as 2002 but did he did not initiate any follow-up investigation into the issue until 2015, the company said.

Tolstedt and other executives were accused of being “unwilling to change the sales model or recognise it as the root cause of the problem” and for resisting scrutiny from corporate risk management.

Wells Fargo chairman Stephen Sanger said executive compensation actions now exceed US$180mln.

“This exhaustive investigation identified serious issues in Wells Fargo’s decentralised structure and the sales culture of the community bank,” Sanger said in a statement.

Shares were little changed ahead of the opening bell in the US.

Story by ProactiveInvestors


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