Wells Fargo Execs Forced To Return Pay, But Not Nearly Enough (VIDEO)

In the wake of continuing investigation into Wells Fargo’s fake account scheme, the bank’s board ordered two top executives to return a combined $75 million in pay today.

Carrie Tolstedt, who headed the bank’s sales division, was ordered to pay back $47 million. Former CEO John Stumpf was ordered to pay back $28 million. This brings the total pay recovered from Tolstedt and Stumpf to $67 million and $69 million, respectively.

But these “clawback” payments don’t come close to covering the $185 million fine the bank incurred last year when the Consumer Financial Protection Bureau discovered its fake account scheme. Nor will Tolstedt’s share constitute repayment of even half of the nearly $125 million retirement package she took after stepping down last year.

According to the board of Wells Fargo, Stumpf was aware of certain unscrupulous sales practices as early as 2002, and was aware of a systemic problem by 2012.

Tolstedt was no better. The board’s report reads:

“There is no evidence that Tolstedt showed serious concern about the effects of improper sales practices on Wells Fargo’s customers or that she initiated efforts to evaluate or remediate customer harm.

“Tolstedt resisted change to the Community Bank’s sales model even when confronted with evidence that it led to low quality sales and improper sales practices.”

Yet even after the scandal broke, Stumpf shamelessly praised Tolstedt as “a standard-bearer” of banking’s culture and “a champion for our customers.”

Ultimately, the bank fired over 5,000 employees who had opened more than two million fake credit card and deposit accounts without customer authorization. The problem, though, is that the employees did so at the behest of their managers. In the high-pressure environment at Wells Fargo, employees were encouraged to gain new customer accounts and make sales at any cost.

At a Senate hearing on the scandal last year, Elizabeth Warren (D-Mass.) excoriated Stumpf, saying:

“…When it all blew up, you kept your job. You kept your multimillion dollar bonuses, and you went on television to blame thousands of $12-an-hour employees who were just trying to meet cross-sell quotas that made you rich.”

Featured image via YouTube video.

 

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