Wells Fargo Claws Back Millions From John Stumpf, Carrie L. Tolstedt, Over Account Sales Scandal
“In its report, the board said as of last Friday, it decided to claw back from Mr. Stumpf an additional $28 million of incentive compensation paid in March 2016 under an equity grant made in 2013. In September it announced $41 million in clawbacks from Mr. Stumpf.
The board is also clawing back Ms. Tolstedt’s outstanding stock options worth about $47.3 million, following $19 million in earlier clawback activity. That brings total clawbacks to $183 million, according to the board report. That is one of the largest company clawbacks in recent history.”
Wells Fargo’s board said on Monday that it would claw back an additional $75 million in compensation from the two executives on whom it pinned most of the blame for the company’s sales scandal: the bank’s former chief executive, John G. Stumpf, and its former head of community banking, Carrie L. Tolstedt.
In a scathing 113-page report that made it clear that all the warning signs of the problem had been glaring, the board released the results of its six-month investigation into the conditions and culture that prompted thousands of Wells Fargo employees to create fraudulent accounts in an effort to meet aggressive sales goals.
The report, compiled by the law firm Shearman & Sterling after interviewing 100 current and former employees and reviewing 35 million documents, said that it was obvious where the problems lay. Structurally, the bank was too decentralized, with department heads like Ms. Tolstedt given the mantra of “run it like you own it” and given broad authority to shake off questions from superiors, subordinates or lateral colleagues.
So many suspicious things should have added up, the report said: People were not funding, or putting money into, their new accounts at alarming rates. Regional managers were imploring their bosses to drop sales goals, saying they were unrealistic and bad for customers.
Copy of the report below…