Wells Fargo’s board of directors slashed the bonuses and other compensation of its CEO and seven other best executives on Wednesday, a small far more than a week just after the board publicly fired four senior managers amid an investigation into the bank’s sales practices.
The cuts in spend for CEO Tim Sloan, Chief Financial Officer John Shrewsberry and others had been broadly expected. Wells’ board had currently clawed back some $59 million in compensation from former CEO John Stumpf and Carrie Tolstedt, who was the head of the neighborhood banking company that was at the center of the sales scandal.
The executives who saw pay cuts had been Sloan, Shrewsberry, David Carroll, the head of wealth and investment management Avid Modjtabai, head of payments and virtual options Hope Hardison, chief administrative officer Davis Julian, chief auditor Michael Loughlin, chief risk officer and James Strother, common counsel. None of the eight executives will obtain money bonuses for 2016 and had their stock bonuses reduce by 50 %. In total, Wells’ slashed executive spend by $32 million, the board said.
None of the executives had been implicated in wrongdoing in the scandal, however they are the heads of numerous divisions that have been affected.
“These compensation actions … are part of the board’s ongoing efforts to promote accountability and ensure Wells Fargo puts client interests very first,” Chairman Stephen Sanger said in a statement.
Wells Fargo acknowledged in September that its workers opened up to 2 million bank and credit card accounts without consumer authorization in order to meet lofty sales ambitions. Quite a few staff have stated that intense stress from management to sell and open accounts was why they have been pushed into unethical behavior. Federal and California regulators fined Wells Fargo $185 million for the practices.
The board is conducting its own investigation into the sales practices scandal. The final results of that investigation are anticipated to be announced prior to Wells Fargo’s annual shareholder meeting in April.
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Ken Sweet covers banks and consumer monetary problems for The Related Press. Stick to him on Twitter at @kensweet.
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