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Report: Wells Fargo Considers Clawing Back Executive Pay Over Fake-Account Scandal

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Wells Fargo CEO John Stumpf was grilled by the Senate Banking Committee last week over the bank’s illegal sales practices.

Susan Walsh/AP


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Susan Walsh/AP

Wells Fargo CEO John Stumpf was grilled by the Senate Banking Committee last week over the bank’s illegal sales practices.

Susan Walsh/AP

Wells Fargo’s board of directors is trying to determine whether to claw back pay for top executives in response to the scandal involving unauthorized customer accounts, The Wall Street Journal reported.

The Journal, citing a source familiar with the matter, said the bank wants to resolve the issue before CEO John Stumpf testifies before the House Financial Services Committee on Thursday.

A spokesman for the bank refused to confirm or deny the report.

Ex-Wells Fargo Employees Sue, Allege They Were Punished For Not Breaking Law

Earlier this month, Wells Fargo said it had agreed to pay $185 million to settle charges that it opened some 2 million deposit and credit card accounts for its customers without their permission over a five-year period.

At a Senate Banking Committee hearing last week, Stumpf was sharply criticized over the fact that the bank has fired some 5,300 employees connected to the illegal sales practices without taking any action against senior executives.

'You Should Resign': Watch Sen. Elizabeth Warren Grill Wells Fargo CEO John Stumpf

“Have you returned one nickel of the millions of dollars that you were paid while this scandal was going on?” asked Democratic Sen. Elizabeth Warren of Massachusetts.

He was also asked about clawbacks of money paid to retail-banking head Carrie Tolstedt, who is set to retire with $124.6 million in stock and options.

Stumpf said the board was weighing what to do but refused to say when a decision would be made.

Wells Fargo's Unauthorized Accounts Likely Hurt Customers' Credit Scores

Since his appearance before the Senate panel, which was seen by many people as something of a public relations disaster, Wells Fargo’s board has expedited efforts to resolve the pay issue.

The bank has the power to take back $36 million in unvested shares of stock from Stumpf and $19 million from Tolstedt if the bank reaches financial targets, Bloomberg reported, citing a letter from the bank to the committee. But Bloomberg noted:

“Cash and stock she already owns — including about $44 million of shares amassed during her 27-year career and $34 million in previously vested stock options — can’t be recovered, according to the bank’s filings.”

Article source: http://www.npr.org/sections/thetwo-way/2016/09/27/495649072/report-wells-fargo-considers-clawing-back-executive-pay-over-fake-account-scanda?utm_medium=RSS&utm_campaign=news



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