Wells Fargo Issues $75 Million Clawback Against Former Executives
Wells Fargo continues to take action against former employees associated with the fake account scandal. On Monday, the company ordered two former senior executives to return $75 million in compensation because they were “too slow to investigate or critically challenge” questionable operations within the bank.
According to the bank’s 113 page investigative report, there were multiple factors that allowed the volume of fake accounts to be created for as long as they were. Wells Fargo’s aggressive sales and performance management systems created pressure on employees to sell or create accounts, even when they were not wanted, needed, or authorized. Management was made aware of this issue in 2014 and were correcting it in 2015—at least in theory. Investigators found that “management reports did not accurately convey the scope of the problem” in 2015 and 2016.
Thus far, Wells Fargo has fired more than 5,300 employees for sales practice violations, as well as five senior executives. Former CEO John Stumpf was ordered to repay $28 million in bonuses, on top of the $41 million he had already forfeited. Carrie Tolstedt, another executive who no longer works for Wells Fargo, received a $47 million clawback Monday. She had previously given up $19 million in pay.
In total, Wells Fargo has issued $180 million in clawbacks, forfeitures and pay reductions for senior executives.
Wells Fargo is soon to release its Building Better Every Day advertising campaign, which aims to highlight the progress the bank has made after discovering the fake accounts. Current CEO Timothy Sloan hopes to regain consumer trust with the new campaign and rebuild a positive image for the brand.