Wells Fargo Appoints Head of New Financial Institutions Group

Share

Wells Fargo & Co.'s board said it has clawed back an additional $75 million of pay from two former executives it holds largely responsible for years of sales-practice problems.

The bank's board also clawed back another $75 million in pay from two former executives, CEO John Stumpf and community bank executive Carrie Tolstedt, saying both executives dragged their feet for years regarding problems at the second-largest USA bank. The board has since cut or clawed back more than $180 million in pay to senior leaders including Tolstedt and Stumpf. As NPR reports, the bank now says it has "recovered more than $180 million in executive compensation over the scandal" - roughly the amount of total fines imposed on Wells Fargo by CFPB past year.

Tolstedt is losing stock options worth about $47.3 million in addition to the $19 million she already gave up, the report said. Asked Monday whether he should resign, Wells Fargo Chairman Stephen Sanger, who has been on the bank's board since 2003, defended the board's actions, saying it has acted properly since the scandal came to light.

But still, not everyone is convinced this is enough.

The report, commissioned by the banking giant's board, reviewed the improper and unethical sales practices that hurt customers, damaged Wells Fargo's brand, led to millions of dollars in fines, pressured employees and caused other fallout, according to the study.

The San Francisco-based bank disclosed the steep financial penalties for its former chief executive and former head of its community banking arm in a lengthy report from independent directors on Wells Fargo's board. Those employees were fired between January 1, 2011, and March 7, 2016. The House Financial Services Committee is also reviewing thousands of pages of documents turned over by Wells Fargo.

One way the Wells Fargo board investigation measured the fake account problem is by looking at what percentage of the bank's accounts were funded with at least the minimum amount of deposits.

Utah Rep. Chaffetz says he won't run for re-election
The Utah lawmaker earned a bachelor's degree in communications from Brigham Young University and played football at the school. House Speaker Paul Ryan tweeted that Chaffetz is "a great defender of liberty and limited government" and wished him the best.

Many suspicious things should have added up, the report said: People were not funding - or putting money into - their new accounts at alarming rates.

Ultimately, despite her plans to retire voluntarily, Wells Fargo decided in September that it would fire Tolstedt for cause, employing a harsh distinction rarely used in an industry that often lets even shamed executives walk away on their own terms.

It was also revealed in the report that the bank's sales culture problem has been existing since 2002 and Stumpf was aware about the problem in its Colorado branch during that year.

Six of Wells Fargo's 15 board members, including all of those who served on bank's risk committee, should not be re-elected, according to Glass Lewis, which advises shareholders on governance matters.

But bank executives turned a blind eye to the practice.

A big part of Wells Fargo's problem was its decentralized business model, which meant the retail bank was able to keep inquiries from head office at arm's length and there was no joined-up effort by either the bank's human resources or legal divisions to track and analyze the scale of the problem.

Tolstedt declined to be interviewed for the investigation, the board said, on advice from her lawyers.

Ownership structure of new hospital 'completely wrong'
The build could only be used for the defined goal of providing public maternity, gynaecological and neonatal services, he said. I have heard that nuns will be gifted the hospital.

The report criticized the board for not centralizing risk functions at the bank earlier, not requesting more detailed reports from management and not insisting Stumpf get rid of Tolstedt sooner.

Shareholder advisory groups Institutional Shareholders Services and Glass Lewis have recommended the ousting of several board members.

Wells Fargo already has paid $185 million in fines to federal and local authorities and settled a $110 million class-action lawsuit over the fake accounts.

After becoming president in November 2015, Sloan discussed with Tolstedt that "she needed to be more open to change and to resolve the sales practice issues quickly", the report says.

Number of employees fired due to sales practice violations.

But Tolstedt was left to deal with the issue and was "notoriously resistant to outside intervention and oversight" the report said.

Still, the board said that once Wells Fargo management did take action, the steps were "incremental, implemented slowly and insufficient" to fix the root of the problem.

Cassidy: Bruins Need More Out Of Marchand, Top Players
But one would expect now is the time to start forcing other Senators players, and more specifically their D-men, to beat you. The Bruins anticipated a push back from the Senators, but were disappointed at letting the two-goal lead slip away.

"The distortion of the community bank's sales culture and performance management system, which, when combined with aggressive sales management, created pressure on employees to sell unwanted or unneeded products to customers and, in some cases, to open unauthorized accounts", the board said in its report.

Share