Wells Fargo CEO gets 17% raise after scandal spurs promotion

Wells Fargo granted its new chief executive officer a 17% raise for 2016 ― but that’s still less than the package his predecessor got a year earlier, before the bank was mired in scandal.

Tim Sloan, who rose to CEO in October, received $12.83 million in salary and equity, up from the $11 million he got as chief operating officer for 2015, according to a regulatory filing on Wednesday. Previous CEO John Stumpf was awarded $19.3 million for 2015, but later relinquished part of it and resigned after the company was fined for opening legions of unauthorized customer accounts.

Revelations that Wells Fargo employees may have opened more than 2 million deposit and credit-card accounts without customers’ permission has prompted sweeping changes at the San Francisco-based company. The firm eliminated a system of sales targets that regulators said encouraged workers to create fake accounts. It also fired or demoted five people who had served as senior managers in the consumer business.

The bank said earlier this month it would withhold cash bonuses and clawback previously awarded equity for eight executives, including Sloan and Stumpf, as its board sought to hold managers accountable for the scandal. The board, which hasn’t accused executives of wrongdoing, is investigating how sales practices went awry. It plans to disclose findings of the review before Wells Fargo’s annual shareholder meeting April 25.

Some of Sloan’s $1.8 million pay increase for 2016 came from a salary bump he got after his promotion to chief operating officer and president in November 2015, in addition to his job running the firm’s wholesale banking unit.

LOST BONUSES
Three other top executives ― Chief Financial Officer John Shrewsberry, wealth management head David Carroll and payments and innovations head Avid Modjtabai ― also were granted larger packages for their work in 2016. They each got $9.24 million, up from $9.05 million a year earlier. Larger awards of restricted stock and modest salary increases of about 2% drove their pay up, even though they got no cash bonus.

The bank’s most senior executives missed out on $4.4 million of cash bonuses this year, according to the proxy. Board members also reduced by $21 million what executives will take from shares granted to them for 2014, with Sloan taking a $5.7 million hit.

Separately, the company said one of its board committees approved the use of a part-time driver for Stumpf, if he wants one. The former CEO can use the driver to help provide security for up to two years after retiring. He didn’t use those services in 2016 after he left the firm, according to the proxy.