Wells Fargo to Claw Back $75 Million From Former Executives -
By STACY COWLEY and JENNIFER A. KINGSONAPRIL 10, 2017
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.
During the period when sham accounts were being pumped out — employees created as many as two million unwanted bank accounts
and credit card accounts — Mr. Stumpf used to brag during quarterly earnings calls about Wells Fargo’s cross-selling prowess.
Mr. Stumpf — who had a long and warm professional relationship with Ms. Tolstedt and was inclined to trust her and let her manage on her own — was warned as early as 2012 about “numerous” customer and employee complaints about the company’s sales tactics but ignored growing evidence
that the problem was pervasive, the board said in its report.
The January sales frenzy was found to produce more turnover, lower-quality accounts and overall employee misery, but the bank was “hesitant to end the program because Tolstedt was ‘scared to death’
that it could hurt sales figures for the entire year,” the report said.
There, senior bankers were “particularly associated with extreme pressure, in some cases calling their subordinates several times a day to check in on sales performance
and chastising those who failed to meet sales objectives.”
The sales pressure peaked each January, when the bank imposed higher daily sales targets on its workers as part of a “Jump into January” campaign.
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.
